Budget 2015: Chancellor announcement on Employment Intermediaries: Temporary workers

[Jessica@WhiteFieldTax]

I think you're probably right but I do wonder how it will be policed, who will decide whether a worker is under SDC of client and where the penalty will fall if that call is later determined by HMRC to be wrong - I suppose this will all be hashed out during the consultation

This mirrors strongly the original IR35 commentary in 1998; after a period of playing with other wording HMRC came to the view that the existing employment status tests were the practical way to proceed; it had been obvious from the outset that using these was how it would end up.

I very much suspect the same will happen here. If disguised employee then no subsistence and travel expenses. SDC in itself is too narrow a test to work with.

In practice I suspect this will boil down to IR35 caught, no expenses. Outside IR35 existing rules still apply.

What could possibly go wrong...

[Ticktock]

Clearly as a PSC has no definition at law, it's going to be a purposeful interpretation on all limited companies.

And a good example of why FLCs are a bad idea - they would allow precisely this sort of defined targetting.

[LisaContractorUmbrella]

Keep telling yourself that if it makes you feel better.

Back in the real world, it should be pretty clear that the reference to PSCs in the official budget notes is a reference to LtdCo contractors.

Whether this makes it to the final recommendation remains to be seen. But if it is implemented as set out, then on balance of probabilities, LtdCo's are more likely to be affected by this, than not.

There is a consultation to follow rather than a discussion which usually means that the Government have made up their mind what they are going to do and HMRC then have to work out how to do it.

[LisaContractorUmbrella]

This mirrors strongly the original IR35 commentary in 1998; after a period of playing with other wording HMRC came to the view that the existing employment status tests were the practical way to proceed; it had been obvious from the outset that using these was how it would end up.

I very much suspect the same will happen here. If disguised employee then no subsistence and travel expenses. SDC in itself is too narrow a test to work with.

In practice I suspect this will boil down to IR35 caught, no expenses. Outside IR35 existing rules still apply.

What could possibly go wrong...

Do you not wonder if this is the very reason that they are using SDC as the determiner?

[Jessica@WhiteFieldTax]

Do you not wonder if this is the very reason that they are using SDC as the determiner?

Yes, but it won't fly, just as "standard agency contract" didn't in 1998.

Deja vouz!

[LisaContractorUmbrella]

Yes, but it won't fly, just as "standard agency contract" didn't in 1998.

Deja vouz!

Does make you wonder - isn't the definition of insanity doing the same thing over and over again and expecting different results

[LisaContractorUmbrella]

It is nice to see that any new rules will apply across the board - unless you work for the Government obviously:

"Travel expenses of members of local authorities etc.
Provides for an income tax exemption for qualifying payments made by a relevant
authority in respect of travel expenses incurred by a member of the authority. The
exemption will apply to a qualifying journey between a member’s home and
permanent workplace where the home is in the area of the authority or no more than
20 miles outside the boundary of the area. This change will have effect from 6 April 2015"

[Contreras]

Given that PSCs are not defined in legislation, ...

... yet. We are definitely headed in that direction though, re. FLCs. And anyway HMRC have their own definition.

You provided your services through a service company if:

• you performed services (intellectual, manual or a mixture of both) for a client (or clients), and
• the services were provided under a contract between the client(s) and a company of which you were, at any time during the tax year, a shareholder, and
• the company’s income was, at any time during the tax year, derived wholly or mainly (that is, more than half of it) from services performed by the shareholders personally.

It's embodied in the Self Assessment already - the "service company" question.

Tax relief for business expenses is also done via Self Assessment. It won't be hard for Hector to join the dots.

[Unix]

... yet. We are definitely headed in that direction though, re. FLCs. And anyway HMRC have their own definition.



It's embodied in the Self Assessment already - the "service company" question.

Tax relief for business expenses is also done via Self Assessment. It won't be hard for Hector to join the dots.

But my contract is with the agent not the client so it doesn't apply.

[Contreras]

In practice I suspect this will boil down to IR35 caught, no expenses. Outside IR35 existing rules still apply.

What could possibly go wrong...

This^ is the best that can be hoped for.