Very worrying - the expenses thing

[eek]

Can this be made into a separate thread and made sticky?

It already is at the top of this forum (I have friends in suitably high places)...

[SarahL2012]

Are the responses to the 2014 consultation document on Hmrc's site anywhere? Most the ones I've seen on line were not supportive of their proposals then so wanted to see what other arguments were put forward. TIA.

[iainsear]

Very Worrying - Killing overseas contracts

Hello Everyone,

I have worked on several overseas contracts and am concerned this change may destroy UK consultants ability to compete against other EU consultants.

I pay myself via PAYE about 50k a year and take no dividends so I am not trying to avoid PAYE/NI.
I work all over Europe on various IT contracts where I have IR35 complaint contracts but the client always retains some direction e.g. specifying what they want delivering be it a new software installation, some other administration a document created/reviewed.
My contacts last 6-12 months typically.
My clients employees are usually EU/security clients where their employees would pay no tax/NI and they only employee contractors for flexibility. I know this isn't uncommon this applies to 100+ people just at my current location.

I have high travel costs of at least 200 GBP a week.
I have high subsistence costs staying away and claim the HRMC publish subsistence rates to reduce administration overhead (this about about 200Euro a day)

How can I complete with big consultancy companies who can claim expenses?
It is unfair that the employees of these big organisations pay no tax and no NI but their contactors do, if you looked through my Ltd company and the agency I work through then my current client is one of these large institutions. I doubt HMRC would therefore allow me a IR35 calculation giving me all my tax and NI back!

The tax changes in the budget have already removed my NI rebate for employing me. I don't pay a dividend so I do not benefit from corporation tax deductions or the new 5K dividend allowance and I will shortly have to pay benefits on 50K of "benefits", these are no benefits, they are hotels, eurostars, flights. I still have all my costs in the UK, with council tax, mortgage etc with the strong pounds this change will finish me and 100's like me off.

Am I getting this wrong? I thought I was doing exactly what the government wanted by paying myself a salary and not taking big dividends? Why go after me I pay thousands in PAYE and NI!

Very Sad and Confused,

Iain

[eek]

Are the responses to the 2014 consultation document on Hmrc's site anywhere? Most the ones I've seen on line were not supportive of their proposals then so wanted to see what other arguments were put forward. TIA.

I can find a commentry of the results at https://www.accountancylive.com/budg...nts-restricted but can't see any HMRC document...

[SarahL2012]

https://api.groupdocs.com/v2.0/share...a8?render=true

The link above may / should go through to Unite's response to the last consultation on this. It's the only response I've found on google so far that hammers PSCs. I don't think the rest of the responses are available unless the author has publicised them unfortunately.

[eek]

https://api.groupdocs.com/v2.0/share...a8?render=true

The link above may / should go through to Unite's response to the last consultation on this. It's the only response I've found on google so far that hammers PSCs. I don't think the rest of the responses are available unless the author has publicised them unfortunately.

Given that I haven't had a chance to read all of it, I will probably shock you by saying that chances are I will agree with all of it.

The problem here is that I know exactly what HMRC and the government are trying to fix here, Taxman is doggedly pursuing abuse, not contractors :: Contractor UK gives a nice outline..

We are just collateral damage, so what I'm currently trying to show is that we are significant collateral damage which will have a significant impact on the actual economy.

[jamesbrown]

Given that I haven't had a chance to read all of it, I will probably shock you by saying that chances are I will agree with all of it.

The problem here is that I know exactly what HMRC and the government are trying to fix here, Taxman is doggedly pursuing abuse, not contractors :: Contractor UK gives a nice outline..

We are just collateral damage, so what I'm currently trying to show is that we are significant collateral damage which will have a significant impact on the actual economy.

I agree. Unions like Unite are primarily concerned with preventing forced incorporation of low paid workers. The only parallel for contractors is that many would elect self-employment given the option, but the unions aren't concerned with highly skilled, highly paid, individuals. However, HMG and HMRC are concerned with both ends of the spectrum, including off-payroll arrangements in the public sector, which are embarrassing for them. So, we are indeed collateral, but the squeeze is coming from both ends, and HMRC aren't concerned with the minutia, just with protecting the Exchequer (i.e. any appeal is to HMG more generally).

[mudskipper]

Hello Everyone,

I have worked on several overseas contracts and am concerned this change may destroy UK consultants ability to compete against other EU consultants.

I pay myself via PAYE about 50k a year and take no dividends so I am not trying to avoid PAYE/NI.
I work all over Europe on various IT contracts where I have IR35 complaint contracts but the client always retains some direction e.g. specifying what they want delivering be it a new software installation, some other administration a document created/reviewed.
My contacts last 6-12 months typically.
My clients employees are usually EU/security clients where their employees would pay no tax/NI and they only employee contractors for flexibility. I know this isn't uncommon this applies to 100+ people just at my current location.

I have high travel costs of at least 200 GBP a week.
I have high subsistence costs staying away and claim the HRMC publish subsistence rates to reduce administration overhead (this about about 200Euro a day)

How can I complete with big consultancy companies who can claim expenses?
It is unfair that the employees of these big organisations pay no tax and no NI but their contactors do, if you looked through my Ltd company and the agency I work through then my current client is one of these large institutions. I doubt HMRC would therefore allow me a IR35 calculation giving me all my tax and NI back!

The tax changes in the budget have already removed my NI rebate for employing me. I don't pay a dividend so I do not benefit from corporation tax deductions or the new 5K dividend allowance and I will shortly have to pay benefits on 50K of "benefits", these are no benefits, they are hotels, eurostars, flights. I still have all my costs in the UK, with council tax, mortgage etc with the strong pounds this change will finish me and 100's like me off.

Am I getting this wrong? I thought I was doing exactly what the government wanted by paying myself a salary and not taking big dividends? Why go after me I pay thousands in PAYE and NI!

Very Sad and Confused,

Iain

Iain, the document specifically says overseas travel will not be affected, so you may be OK on that one.

[eek]

I agree. Unions like Unite are primarily concerned with preventing forced incorporation of low paid workers. The only parallel for contractors is that many would elect self-employment given the option, but the unions aren't concerned with highly skilled, highly paid, individuals. However, HMG and HMRC are concerned with both ends of the spectrum, including off-payroll arrangements in the public sector, which are embarrassing for them. So, we are indeed collateral, but the squeeze is coming from both ends, and HMRC aren't concerned with the minutia, just with protecting the Exchequer (i.e. any appeal is to HMG more generally).

It's worth repeating that this is why I'm doing my own response (having collected appropriate data) because unless I collect it it seems no one else has the common sense to collect and correlate actual figures...

[jamesbrown]

Iain, the document specifically says overseas travel will not be affected, so you may be OK on that one.

It may not be that straightforward. I take a particular interest in this because most of my clients are located overseas. My reading is that elements of T&S would remain tax deductible, such as the flights, but other elements may not, such as the subsistence payments and airport transfers. I hope I'm wrong about that. Not that it would massively impact my profits, but it would be very irritating and an additional layer of red tape. It's also worth noting that all dispensations are void as of next April and it's unclear whether applications for extension to benchmark scale rates will be approved, adding another layer of red tape.