Very worrying - the expenses thing

[eek]

Amen.

I think IPSE would argue that it's difficult to discriminate on the basis of skills alone because there are skilled occupations that are relatively low paid and face these pressures from forced self-employment. However, this distinction seemed to be made adequately with PCG; the hint is in the name, right?

Except for a money grabbing scheme I really don't understand it. If you want to support the freelance community you should be trying to support people in getting what they want. I.e.:

Ensuring that those who wish to be freelance can remain so
Supporting those who have been forced to become freelance to become the employed employee they want to be...

[iainsear]

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.

Hello James,

Thanks for your insight. Interesting, the general mood in my office (full of uk contractors) is that without subsistence (i.e. just travel deductions) and with the current exchange rate that next tax year it would no longer be profitable working as a uk plc in Europe compared with taking a UK contract. Seems a double own goal to have all the NI/PAYE/Dividends Tax/Corp Tax flow abroad especially as the UK government is paying part of the bill for these extra national organisations.

Question: If this about disguised employment then the organisations I work with have employees who pay no tax due to the nature of international organisations. Can we apply IR35 in reverse and claim all our tax and NI back? It seems unjust to apply the rules only when the employee would pay more tax/NI not much less.

Regards,

Iain

[LisaContractorUmbrella]

Is it though.... They would prefer the low paid to be treated as employees, companies want to avoid that to keep costs as low and as flexible as possible... This is only going to get worse as the living wage is implemented next year...

We are back to the problem I have wittered on about for the past year from the moment IPSE changed their focus... There are a set of low paid "freelancers" who actually, really, honestly don't want to be freelance but their "employers" won't employ them any other way... The IPSE shouldn't be pretending to act for them but support the unions in actively helping them fix the issue.

HMG/HMRC's issue is with the number of workers who now get tax relief on T&S expenses; it was never the Government's intention that it should be applied to anything other than proper contractors. Problem is, rather than working a solution which would make a clear distinction, they are taking the sledgehammer to crack a nut approach.

One solution we came up with was to suggest that workers on, say, living wage +20% or less could not work through an intermediary and not be engaged on a zero hours contract - this would take large numbers of workers, who should never have been in this market in the first place, back into permieland and HMG's problems are solved. The thresholds would change automatically every year, it would be simple to police due to RTI and there would be no more arguments over employment status which, let's face it, is a losing battle.

[stek]

Putting a positive spin on this, could it mean;

1. Contractors working away from home become too expensive

2. Therefore contracts generally go to local person

3. Therefore contractors get to work nearer home more

I'd be happy with that. I don't see the sense of me in Leeds working in Basingstoke while other contractor in the same field living in London works in Leeds. Market forces might sort it out?

Having said that I haven't considered the Southern loading, far more contracts in City than rest of country put together probably.

Ignore me....

[eek]

HMG/HMRC's issue is with the number of workers who now get tax relief on T&S expenses; it was never the Government's intention that it should be applied to anything other than proper contractors. Problem is, rather than working a solution which would make a clear distinction, they are taking the sledgehammer to crack a nut approach.

One solution we came up with was to suggest that workers on, say, living wage +20% or less could not work through an intermediary and not be engaged on a zero hours contract - this would take large numbers of workers, who should never have been in this market in the first place, back into permieland and HMG's problems are solved. The thresholds would change automatically every year, it would be simple to police due to RTI and there would be no more arguments over employment status which, let's face it, is a losing battle.

The flaw in that approach (and while I already know many people hate a income based approach it may be the only way that is workable) is that agencies are only being asked for payment information not hours worked.

As such it would have to be against a pro-rotaed annual national living wage of £13000 * whatever factor you want (£13k is national minimum wage £7.2*35hrs*52weeks)

But as you say the employment battle has been utterly lost... We need to clearly emphasis that and show how everyone is under direction, supervision or control. As someone pointed out previously High Court Judges get sentencing guidelines from HMG. That meets under HMRC's examples is direction...

[eek]

Putting a positive spin on this, could it mean;

1. Contractors working away from home become too expensive

2. Therefore contracts generally go to local person

3. Therefore contractors get to work nearer home more

I'd be happy with that. I don't see the sense of me in Leeds working in Basingstoke while other contractor in the same field living in London works in Leeds. Market forces might sort it out?

Having said that I haven't considered the Southern loading, far more contracts in City than rest of country put together probably.

Ignore me....

This contract period (last 3 years) has been Newcastle, Leeds, Newcastle now London. The only other options when I was looking was Reading or Bradford. All of whom required weekly commute and paying for accommodation...

[expat]

...
But as you say the employment battle has been utterly lost... We need to clearly emphasis that and show how everyone is under direction, supervision or control. As someone pointed out previously High Court Judges get sentencing guidelines from HMG. That meets under HMRC's examples is direction...

Surely not? Telling someone the requirement is not direction and control.

I thought the classic example was a chef:
If you order a steak that's not D&C, it's just a PO.
If you order it medium rare it's still not D&C, it's just a requirement.
It's only if you tell the chef exactly how to cook it medium rare that it's D&C.

[eek]

Surely not? Telling someone the requirement is not direction and control.

I thought the classic example was a chef:
If you order a steak that's not D&C, it's just a PO.
If you order it medium rare it's still not D&C, it's just a requirement.
It's only if you tell the chef exactly how to cook it medium rare that it's D&C.

That's not the problem. The problem is that in 2 years time the chef has to show that you didn't tell him exactly how to cook it.. Its very easy to show that you are under direction or control, its far harder to show that you are not....

[LisaContractorUmbrella]

The flaw in that approach (and while I already know many people hate a income based approach it may be the only way that is workable) is that agencies are only being asked for payment information not hours worked.

As such it would have to be against a pro-rotaed annual national living wage of £13000 * whatever factor you want (£13k is national minimum wage £7.2*35hrs*52weeks)

But as you say the employment battle has been utterly lost... We need to clearly emphasis that and show how everyone is under direction, supervision or control. As someone pointed out previously High Court Judges get sentencing guidelines from HMG. That meets under HMRC's examples is direction...

Adding in another row to the Agency Reporting would solve that quite easily I would have thought.

Yes we do - the SDC test is ridiculous for many reasons including that you'd be trying to prove a negative

[LisaContractorUmbrella]

Surely not? Telling someone the requirement is not direction and control.

I thought the classic example was a chef:
If you order a steak that's not D&C, it's just a PO.
If you order it medium rare it's still not D&C, it's just a requirement.
It's only if you tell the chef exactly how to cook it medium rare that it's D&C.

What Eek says but also it's not SDandC it's S or D or C OR the right thereof and it's the last bit that's the killer. In your chef example he may have been asked to cook a steak well done but the head chef as the RIGHT to throw a complete diva strop and tell him that a steak should only ever be cooked rare because otherwise you'll lose all the flavour