They came up again as part of the OTS review of employment status... not directly related to contractors, but it doesn't look like the FLC trojan horse will vanish.
Advisers back OTS recommendations on employment status - 04 Mar 2015 - Accountancy Age
Also here.
IR35: The 'Third Way' - Contractor Weekly
I think this bit below goes without saying and they have been banging this drum for years now...
Advisers back OTS recommendations on employment status - 04 Mar 2015 - Accountancy Age
Of particular interest to many is what the OTS described as a "third way", which many suggest could be a freelancer limited company, which would afford the self-employed greater protection and help simplify their affairs.
But whatever the details, all stakeholders appear relieved the area is receiving due attention and is being taken seriously, particularly in the run-up to the Budget and the general election. The overriding feeling from advisers is that we've not only reached a point where reform is overdue, it's vital if we want the country to keep up in the global economic race and continue to compete viably.
But whatever the details, all stakeholders appear relieved the area is receiving due attention and is being taken seriously, particularly in the run-up to the Budget and the general election. The overriding feeling from advisers is that we've not only reached a point where reform is overdue, it's vital if we want the country to keep up in the global economic race and continue to compete viably.
IR35: The 'Third Way' - Contractor Weekly
This involves the introduction of a new category of worker, a 'third way' between the employed and self-employed, acknowledging that some workers do not fit easily into either of the two traditional positions and that they should be subject to a modified set of tax rules. Freelancers might fall into this 'third way' and who might be seen as people who have chosen this route of working and want certainty over their status.
However, this middle status would mean that those covered by it would have to accept the tax consequences that were part way between employed and self-employed. The Freelancer Limited Company idea, for instance, whereby the entity agrees to a fixed but fair salary:dividend split to ensure that some income is exposed to PAYE and NIC.
The OTS is not keen on this concept due to the many difficulties in establishing it fairly, although it has not ruled out returning to the idea should its proponents be able to address some of the OTS's concerns.
Where there are any 'quick wins' that can be adopted from this report then it may be possible for these to be taken forward quickly. However, it is likely that should the report point towards significant reforms, these would be for the next government to consider.
However, this middle status would mean that those covered by it would have to accept the tax consequences that were part way between employed and self-employed. The Freelancer Limited Company idea, for instance, whereby the entity agrees to a fixed but fair salary:dividend split to ensure that some income is exposed to PAYE and NIC.
The OTS is not keen on this concept due to the many difficulties in establishing it fairly, although it has not ruled out returning to the idea should its proponents be able to address some of the OTS's concerns.
Where there are any 'quick wins' that can be adopted from this report then it may be possible for these to be taken forward quickly. However, it is likely that should the report point towards significant reforms, these would be for the next government to consider.
Reiterating its recommendations made in its Small Business Review, the OTS emphasises that by merging tax and NIC would remove many of the anomalies within the tax system and contribute significantly to simplifying issues around status by reducing the differentials.
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