IR35 'to be reviewed'

[northernladuk]

I'm not worried anyway. We've got IPSE to fight our cause.....

[tractor]

....

Presumably they mean the end users. Methinks it's a subtle way of forcing the FLC through. The change to how dividends are taxed alone will erode a lot of the already fancifully high amount the legislation 'protects'.

They don't need to now, they have effectively used the legally undefined term PSC loudly enough and for long enough for it to be acceptable to all but the contractor, including government, select committees, journalists, accountants and even IPSE. They have introduced a new dividend tax regime along with enough bands to render dividend income neutral as far as tax/NI goes. It will only be a matter of time until the two are aligned. Job done.

It matters not how long it takes to define an FLC, whether you are listening to IPSE, Labour, the gov or HMRC. The target is already painted on your back. Expect the rates announced today to be 'adjusted' prior to 2016 when it comes into force. Remember, we still have the autumn statement and the March budget to go before it comes into play.

[Zero Liability]

True. I suspect this "review" isn't going to move much ground. The dividend tax was the real "shocker" for contractors, and probably most investors in the UK. Trying to beef up IR35, when its enforcement is so very costly (and cost-benefit ratios will worsen considerably now that the 'protected' yield will reduce as a consequence of the new tax), would be counter-productive compared to simply relying on this new tax regime and tweaking rates as they think is required. They can now also single out what they deem "PSCs" via the agency reporting requirements, if they wanted to apply a separate set of thresholds to them, so in a way it's the FLC by another name.

[TestMangler]

I'm not worried anyway. We've got IPSE to fight our cause.....

Very good NLUK !!

[BolshieBastard]

They say the same every year and it often fails spectacularly. Not really news and not necessarily that bad. Lets wait for the details first.

Wow! Spectacularly naive.

It's the paragraph that comes after that which is the one to pay attention to:

"The government has asked HMRC to start a dialogue with business on how to improve the effectiveness of existing IR35 legislation. The government wants to find a solution that protects the Exchequer and improves fairness in the system."

Whatever is coming, it's not going to be good for us.

This. Expect a bigger clampdown via IR35.

I cant believe some people's head in the sand attitude towards IR35. Im currently working with 6 other contractors. Not one has their contract reviewed professionally. One thought they had 'opted out' of IR35 by signing a statement provided by the agency. The rest dont have a problem with being told they must start and finish on the times directed by the client and none of them think IR35 is a concern.

Ho hum.

[BolshieBastard]

True. I suspect this "review" isn't going to move much ground. The dividend tax was the real "shocker" for contractors, and probably most investors in the UK. Trying to beef up IR35, when its enforcement is so very costly (and cost-benefit ratios will worsen considerably now that the 'protected' yield will reduce as a consequence of the new tax), would be counter-productive compared to simply relying on this new tax regime and tweaking rates as they think is required. They can now also single out what they deem "PSCs" via the agency reporting requirements, if they wanted to apply a separate set of thresholds to them, so in a way it's the FLC by another name.

Not even osbourne or gauke are that stupid as to raise a new tax that makes their beefing up of IR35 worthless. This will be a double whammy.

[northernladuk]

Wow! Spectacularly naive.

Naive because I'm not getting upset by something until I see some details? You can do better than that BB.

I cant believe some people's head in the sand attitude towards IR35. Im currently working with 6 other contractors. Not one has their contract reviewed professionally. One thought they had 'opted out' of IR35 by signing a statement provided by the agency.

And hopefully whatever comes along will target these guys first but I sadly doubt it.

The rest dont have a problem with being told they must start and finish on the times directed by the client and none of them think IR35 is a concern.

Because it isn't really?

[Zero Liability]

Not even osbourne or gauke are that stupid as to raise a new tax that makes their beefing up of IR35 worthless. This will be a double whammy.

Sunk costs. It's horribly cost inefficient and direct yields scale very poorly with increased enforcement. Why wouldn't they just take the easier route of using the new dividend tax, which circumvents the need for IR35 altogether? Yes they can do whatever they like, but this new tax will accomplish that objective with far greater ease, and will also worsen the cost-efficiency of IR35 further. Little point in worrying about it before the details emerge, as NLUK said.

[BolshieBastard]

Naive because I'm not getting upset by something until I see some details? You can do better than that BB.

Who's getting upset? Im a pragmatist. I remember some longer time contractors than me saying IR35 wasnt anything to worry about when mentioned in the 2000(?) budget. The last couple of governments have beefed up their attack via IR35 albeit by giving HMRC more resources to tackle it or having this talking shop forum trying to present IR35 as reasonable.

This is only going one way and its not towards easement.

And hopefully whatever comes along will target these guys first but I sadly doubt it.

Me too.

Because it isn't really?

So a contract that said your start and finish time could only be xxxam and finish xxpm wouldnt be a red flag to you or a contract reviewer? Do you still accept contracts that have a documented start \ finish time?

You dont see that as strong D&C? Seriously?

[northernladuk]

So a contract that said your start and finish time could only be xxxam and finish xxpm wouldnt be a red flag to you or a contract reviewer? Do you still accept contracts that have a documented start \ finish time?

You dont see that as strong D&C? Seriously?

Now who on earth has a contract that says 'could only be' for a start. Even if it does say 9 to 5 no one is rigid with their time. You go in half and hour earlier and go home half an hour later. No D&C there. Working practices trump the contract and I am pretty sure no client makes you stick to exact times.

Showing professional courtesy and adhering to their normal practice isn't D&C.