New proposal from IPSE - Smoke and mirrors?

[jamesbrown]

Many people would gladly pay a little more tax to escape the uncertainty of IR35 - and the need to pay for expensive IR35 reviews and insurance.

The reality of IR35 is that a only minority of contractors understand and act upon it, with the vast majority being ignorant, and for those that do act upon it (I would venture, the better paid contractors), the costs are minimal, relatively speaking, along with the risks, given the due diligence undertaken and the resources available to police it. CUK is not particularly representative of the wider community of contractors and, even in that context, there are fairly regular posts here that demonstrate complete cluelessness. Rather, the minority of us that take it seriously and manage the risks are at the very thin end of the wedge. It's the fat end of the wedge that you need to look at, where there's scope for imposing a structure that avoids the need for policing (at least to the same degree) and avoids the reliance upon a so-called deterrent effect, which is rather hard to quantify (as recently evidenced to the HoL).

Unfortunately, anyone that believes this structure will be optional, in the long-term, is deluded, because it would fail to achieve either of the above benefits for HMRC (there would still be a reliance on current policing and on an unquantifiable deterrent effect). In terms of any benefits to freelancers, these would be squarely with the self-employed (the new and improved IPSE, subscriptions pending). HMRC and the self-employed stand to win, legitimate contractors stand to lose. Everything else is just details. There isn't a single element of an FLC that would benefit me as a contractor, and the suggestion that such a structure would be optional is completely hollow.

[Unix]

FTFY

Would go permie for the highest salary then once safe go on a sickie marathon.

[BolshieBastard]

I wonder if they are going to change the signing on for jsa criteria? As with every break someone has under this they could sign on.

They dont need to change the JSA criteria.

If you've paid sufficient contributions or credit during the previous 12 months and havent claimed, received and exhausted your JSA entitlement within that period, you can sign on for Contributions JSA. Other entitlement rules regarding dismissal etc would still apply.

If you or your dependants have savings greater than £16k (I think), you will not get Income Based JSA.

[Zero Liability]

I doubt it either. But not everything is about tax. It could benefit UKGov if all that happened was they could stop spending money on IR35, and knew more accurately how many freelancer/contractors there WERE, even if the tax take stayed the same.

Many people would gladly pay a little more tax to escape the uncertainty of IR35 - and the need to pay for expensive IR35 reviews and insurance. I bet a lot of people would even be 'happy' as long as the amount of tax they paid didn't exceed what they would pay in PAYE as a permie earning the same amount, even!

I choose to be about as tax efficient as is possible through my Ltd once I had one, because why wouldn't you, but I didn't set up a Ltd for that purpose. If something simpler and more tailored had existed, with a clearly defined tax/NI setup that wasn't drastically expensive, I'd have done that instead.

Opposing something not because of what it will achieve but how it could be tinkered with in the future, seems pointless to me.

Considering the mission creep of a rather awful measure like IR35, that is arguably more trouble than it's worth even to HMRC, I can see good reason for considering how the government may abuse FLCs, and also who is behind their introduction, as presently there are too many uncertainties and too much scope for abuse. If I were in contracting for for very long term, I'd be very concerned.

[d000hg]

But that is not what you will get.

That's conjecture.

What are you going to do when your spouse who may also be a fee earner is not allowed to be part of your business?

What do you do when you are doing some freelance work on the side and decide to take the plunge into doing it full-time? What do you do when you are a contractor and decide to launch a plan B venture? Having to change how you work if the underlying nature of how you are set up changes is a terrible argument, that's really reaching.

[RasputinDude]

That's conjecture.

It is a logical conclusion derived from past behaviour of HMRC and recruitment agencies.

HMRC perceive as tax dodging scum. They have been pushing the PSC agenda for quite some time now and it is all starting to fit together - this is what they wanted. From the first time that PSC question appeared on tax returns it became clear that they were targetting Ltd Co. contractors. Allowing the PSCFLC idea to get any further is ridiculous - we are legitimate companies for crying out loud - as such, there is no nead to score an own goal and let this tripe of an idea get any further.

Instead of 'engaging HMRC' and 'being at the table', we should be forcefully pushing the fact that we proper companies.

[malvolio]

It is a logical conclusion derived from past behaviour of HMRC and recruitment agencies.

...neither of whom define government policy, but hey...

...snip...
Instead of 'engaging HMRC' and 'being at the table', we should be forcefully pushing the fact that we proper companies.

And how do you do that if you aren't "sat at the table", do you suppose? Industrial action perhaps? Civil disobedience? A Facebook campaign? Ask other commercial companies to do it on your behalf?

You have to influence the policy makers, that's the basic problem.

[tractor]

...

...neither of whom define government policy, but hey...


And how do you do that if you aren't "sat at the table", do you suppose? Industrial action perhaps? Civil disobedience? A Facebook campaign? Ask other commercial companies to do it on your behalf?

You have to influence the policy makers, that's the basic problem.

In the early days of our fight against IR35, that was my naiive view and I was told categorically by PCG advisors and lobbyists that HMRC do indeed influence policy esp where they (HMRC) consider that the intention of government is not working.

How do you influence the policy makers when they listen in the first instance to an organisation that fabricates and hides evidence of their own incompetence and manipulation of the facts and figures at HoL committees?

[malvolio]

In the early days of our fight against IR35, that was my naiive view and I was told categorically by PCG advisors and lobbyists that HMRC do indeed influence policy esp where they (HMRC) consider that the intention of government is not working.

How do you influence the policy makers when they listen in the first instance to an organisation that fabricates and hides evidence of their own incompetence and manipulation of the facts and figures at HoL committees?

By proving that is what they're doing, using supportable evidence of your own or, as per IR35's effectiveness, by using the rules to get the real numbers out of them and demonstrate the disconnect between claim and reality.

Yes, HMRC affect the delivery of policy - their imaginative and damaging reinterpretation of the BETs proved that - but the IR35 Forum and similar HMG-sponsored committees can curb their wilder excesses these days. The HoL review certainly didn't report that HMRC were doing a good job, but what drove the creation of that review, do you suppose, if not the oversight committees?

[tractor]

...

By proving that is what they're doing, using supportable evidence of your own or, as per IR35's effectiveness, by using the rules to get the real numbers out of them and demonstrate the disconnect between claim and reality.

Yes, HMRC affect the delivery of policy - their imaginative and damaging reinterpretation of the BETs proved that - but the IR35 Forum and similar HMG-sponsored committees can curb their wilder excesses these days. The HoL review certainly didn't report that HMRC were doing a good job, but what drove the creation of that review, do you suppose, if not the oversight committees?

The problem we all face is the hypocrisy of it all. HMRC only give a toss about showing how hard their job is and justifying their biscuit budgets. Any government only give a toss about increasing the tax receipts as long as they are not personally affected.

Then they wonder why people don't give a toss in return.