Originally posted by LisaContractorUmbrella
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I think we're talking at cross-purposes here. By fundamental change in statute, I mean a change that replaces employment status with a simpler mechanism. They probably won't do that. And if they imagine that changing the primacy of SDC will produce the desired outcome, they'd be well advised to check the case law and their wider record in predicting outcomes. Such changes will probably not have the desired consequences. There is a reason that employment status is judged on the basis of more than SDC, as I've indicated above (but I would also be perfectly fine with having more emphasis on SDC). -
That's exactly what they're proposing https://www.gov.uk/government/consul...nd-subsistenceOriginally posted by jamesbrown View PostComment
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I'm talking about the IR35 discussion document; I thought that was clear from my references to the different elements of the case law as they apply to employment status (I appreciate the thread title, but I think these discussions have been crossing over throughout, perhaps unhelpfully). The application of SDC to tax relief on expenses is completely new, that much is clear. What's unclear is how it will interact with son-of-IR35 following any realignment of IR35 (e.g. inside IR35 = no tax relief on expenses).Originally posted by LisaContractorUmbrella View PostComment
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Both the IR35 discussion document and the T&S Consultation document have employment status at their root but the test that will be applied in both cases, should the changes go through as has been indicated, is S or D or C or the right thereof and nothing elseOriginally posted by jamesbrown View PostComment
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Yes, I'm fully aware of that. The focus on SDC is not a simpler mechanism, but it's also not emphatically bad (i.e. if you're a highly skilled professional, such as a consultant, it may not apply in principle, as I've alluded to above). A simpler mechanism would involve draconian rules applied to a legally-defined subset of companies, along the lines of those adopted in other jurisdictions, such as the US, Canada and Australia (all of which have legal definitions of Personal Service Companies), and these were also mooted in the IR35 discussion document (e.g. things like turnover from a single client, length of contract etc.). We'd do well to learn from other jurisdictions about the impacts on the flexible workforce from such draconian measures. An example from Canada (sounds similar, right?):Originally posted by LisaContractorUmbrella View Post
https://www.kpmg.com/Ca/en/IssuesAnd...s/tnfc1307.htmComment
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Eh??? SDC is an integral part of existing case law. Refer to that case law. How would a judge ever come to the conclusion that the mere possibility of one component of S or D or C is sufficient? Also, please explain to me how SDC will now apply in practice to those earlier cases where the judge found that it could not apply in principle (because the client did not have the necessary expertise to S or D or C the process adopted by the consultant, only to accept or reject the outcome of that process)? Again, re-read my various posts above and refer to the existing case law, which still stands with SDC. Of course, all of this is totally irrelevant if the client has to make the determination, as I've also said above.Originally posted by LisaContractorUmbrella View PostComment
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Honestly, I don't see your point at all. As long as they are working with the terminology of SDC, they are bound by the existing case law on SDC. While HMRC guidance is never very enlightening, they have offered some guidance. Obviously, it comes with an enormous amount of spin via the examples provided, but it is nevertheless based on existing case law, and that's the point.Originally posted by LisaContractorUmbrella View Post
I quote: "When dealing with employment status cases the courts have considered control in the broadest sense and in each case the employment status has been determined on the facts of the case presented to the court. HMRC has accepted the courts’ interpretations over the years and we base our understanding of what constitutes “control” for the purposes of employment status, on the findings of the courts."Comment
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Ok, last try. The issue is that ONLY S or D or C is going to be considered. To quote MacKenna J:
"An obligation to do work subject to the other party’s control is a necessary though not always a sufficient, condition of a contract of service. If the provisions of the contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract, and the person doing the work will not be a servant. The judge’s task is to classify the contract ……. He may, in performing it, take into account other matters besides control." i.e. There should be considerations other than SDC when determining employment status.
Also from Morren v Swinton Lord Chief Justice Parker said
“Clearly superintendence and control cannot be the decisive test when one is dealing with a professional man or a man of some particular skill and experience. Instances of that have been given in the form of a master of a ship, an engine driver or a professional architect, or as in this case, a consulting engineer. In such cases there can be no question of the employer telling him how to do work; therefore the absence of control and direction in that sense can be of little, if any, use as a test”
Existing case law cannot be relied upon if elements other than SDC have been used, alongside SDC, to determine status in those casesComment
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