"IR35 could well be dead in a few months" ?

[TheCyclingProgrammer]

to above, thanks.

Here's IPSE's published guidance which, as it stands, takes the view that any sub-contracted worker will need reporting if you're direct with your client and the sub-contracted worker is not paid via PAYE (could this potentially exclude sub-contractors working through an umbrella?, not sure):

https://www.ipse.co.uk/guides/new-re...ments-agencies

[TheCyclingProgrammer]

There seems to be a lot of support on the IPSE community board thread for the idea that these reporting regulations should only apply to "agencies" that engage "agency workers" which in theory, like the intermediary rules that were introduced last year, should only apply where the worker is under significant direction and control by the agency, therefore meaning that these reporting requirements are irrelevant to all but employment agencies.

HMRC obviously don't see it this way so IPSE seem to be gearing up for a legal challenge. This will obviously take some time so it looks like its something that we are all going to have to put up with for now - whether you're a PSC who works through an agency and will need to start handing out personal details, or you're a contractor that works direct with a client but sub-contracts and therefore needs to take on the reporting burden.

[Coalman]

What are the consequences of not reporting? I apologise for not having looked through the guidance yet.

[TheCyclingProgrammer]

What are the consequences of not reporting? I apologise for not having looked through the guidance yet.

Fines. Potentially heavy ones.

[jamesbrown]

There seems to be a lot of support on the IPSE community board thread for the idea that these reporting regulations should only apply to "agencies" that engage "agency workers" which in theory, like the intermediary rules that were introduced last year, should only apply where the worker is under significant direction and control by the agency, therefore meaning that these reporting requirements are irrelevant to all but employment agencies.

HMRC obviously don't see it this way so IPSE seem to be gearing up for a legal challenge. This will obviously take some time so it looks like its something that we are all going to have to put up with for now - whether you're a PSC who works through an agency and will need to start handing out personal details, or you're a contractor that works direct with a client but sub-contracts and therefore needs to take on the reporting burden.

That may be the case, but I think it's important to consider the reporting regulations in isolation, and there's no requirement for SD&C in that context. Further, "agency" is (I would suggest) clearly defined in Section 44 of the ITEPA (2003) as being very broad, but the definition is not conditional upon SD&C, despite the other clauses there. Of course, this could be a case of willful extension/over-reach by HMRC, but any legal action would (if possible) take a long time to resolve. In the mean time, I think the implications are pretty clear (and pretty bad).

I'll be writing to my MP to express my disgust, given the Gov't rhetoric about reducing red tape for small businesses, and indicating that this will impact the voting intentions of many small business owners, because I believe it will. This is nothing more than HMRC giving up on the policing of avoidance, due to lack of resources, and putting the burden on small businesses, and it's pathetically transparent as such.

[Whorty]

This talks about PSC's but how would it impact building contractors - surely they are also a 'PSC' business? Builders often sub-contract work, so are they also caught in this or is it only white collar contracts? For e.g., I may hire a main contractor to install a bathroom, but he/she may then sub-contract out the tiling and the electrics but keep the plumbing to himself ... any ideas?

[jamesbrown]

This talks about PSC's but how would it impact building contractors - surely they are also a 'PSC' business? Builders often sub-contract work, so are they also caught in this or is it only white collar contracts? For e.g., I may hire a main contractor to install a bathroom, but he/she may then sub-contract out the tiling and the electrics but keep the plumbing to himself ... any ideas?

Nothing is out of scope insofar as the aim is to identify payments that are made outside of PAYE, via an intermediary, and the intermediary is onshore. However, I can't see how many builders would get away with being outside of the SD&C of the main contractor(?)

By the way, on the SD&C point, I think this is clearly moot w/r to the definition of "agency" because operating under SD&C implies that PAYE should be operated, so a definition of "agency" for the purposes of reporting that depended on lack of SD&C would be meaningless (because it only applies when PAYE doesn't); in short, SD&C has nothing to do with the reporting requirement, except that it doesn't apply, by definition.

[Zero Liability]

The fact that the impact of this regulation is so far-reaching may mean it'll have a higher chance of being defeated. If it just impacted contractors, interest in it would be lower. IPSE should challenge this anyway.

IR35 is dead, it's kept around as a deterrent to newbie contractors who don't know any better. Your more likely to win the lottery than get IR35 investigated. Anyone who says otherwise, is either HMRC, selling insurance in some way.

It's a bit higher than that, but it ranks as more improbable than some of these scenarios.

I do find it funny how Labour and its goons are still trying to push this whole thing as part and parcel of the tax avoidance debate. They're barking up the wrong tree as the figures and arguments just do not stack up. I can definitely see them pushing the FLCs should they come to power, since they're losing on every other front...

[LisaContractorUmbrella]

Morning chaps

This was the response I received from HMRC:

This is very helpful. The accountant has grasped the distinction. By providing services we mean your company hiring someone else to provide services to the client. Paying someone to design a logo for your company which you then sell on to the client is not caught. This is all about PSCs supplying another worker to work for the client to deliver the services you are charging the client for - providing services alongside you, or instead of you.

An agency is any third party interposed between the worker and the client for whom they provide the services. We publish our Employment Status Manual which is the guidance for our staff and it cointains a useful detailed treatment of what an agency is.

http://home.active.hmrci/ESMmanual/ESM2033.htm

I trust this helps

[TheCyclingProgrammer]

OK, that seems a bit more positive.

How can this be communicated to IPSE and how can HMRC provide better guidance on their website?

It still seems like you face the decision of deciding whether something should or shouldn't be reported each time you sub contract and face fines for getting it wrong.