Budget commentary - Telegraph

[jamesbrown]

Shaping the narrative is important

The propaganda war has been lost. Really, it was lost before it started. Evasion morphed into evasion and avoidance, then to evasion, avoidance, and aggressive tax planning, then to evasion, avoidance, planning, and imbalances in the tax system. It will continue largely unchallenged because the public (and press) are largely onside and don't care to understand the subtleties of how contractors (operate and) are taxed. It has become an argument about tax, rather than an argument about contracting. Certainly, we should respond to the discussions via IPSE and others (there's some chance to impact those) and, perhaps, to the subsequent consultations, in order to provide substantive evidence about the impacts and collateral damage, but these impacts are, ultimately, too easily dismissed.

[expat]

The propaganda war has been lost. Really, it was lost before it started. Evasion morphed into evasion and avoidance, then to evasion, avoidance, and aggressive tax planning, then to evasion, avoidance, planning, and imbalances in the tax system. It will continue largely unchallenged because the public (and press) are largely onside and don't care to understand the subtleties of how contractors (operate and) are taxed. It has become an argument about tax, rather than an argument about contracting. Certainly, we should respond to the discussions via IPSE and others (there's some chance to impact those) and, perhaps, to the subsequent consultations, in order to provide substantive evidence about the impacts and collateral damage, but these impacts are, ultimately, too easily dismissed.

This was obvious a couple of years ago when HMRC set up an Anti-Avoidance Unit charged (according to their website) with reducing the "tax gap" which is the difference between the revenue actually collected and that which the government expected. A chilling phrase to me, with its implication that we are there to fulfil government's expectations.

And its clear statement (not just an implication) that the law is what parliament intended it to be, not what they actually wrote. Lewis Carroll or Franz Kafka?

[LisaContractorUmbrella]

The propaganda war has been lost. Really, it was lost before it started. Evasion morphed into evasion and avoidance, then to evasion, avoidance, and aggressive tax planning, then to evasion, avoidance, planning, and imbalances in the tax system. It will continue largely unchallenged because the public (and press) are largely onside and don't care to understand the subtleties of how contractors (operate and) are taxed. It has become an argument about tax, rather than an argument about contracting. Certainly, we should respond to the discussions via IPSE and others (there's some chance to impact those) and, perhaps, to the subsequent consultations, in order to provide substantive evidence about the impacts and collateral damage, but these impacts are, ultimately, too easily dismissed.

I don't think they'd be too easily dismissed if we can prove that the proposed legislation changes will impact the wider economy. Businesses use contractors for a reason (as does the Public Sector) and I think we can assume that those reasons will be financial or simply because the particular project doesn't warrant the recruitment of a full time member of staff. Costs of employment will obviously also be a factor. If changes to the way contractors work mean that, ultimately, costs to business and the Public Sector (the tax payer) will increase then it won't be a popular move and, let's face it, if there's one thing a Government wants to be it's popular.

I think battles have been lost but I don't think we've lost the war

[LisaContractorUmbrella]

This was obvious a couple of years ago when HMRC set up an Anti-Avoidance Unit charged (according to their website) with reducing the "tax gap" which is the difference between the revenue actually collected and that which the government expected. A chilling phrase to me, with its implication that we are there to fulfil government's expectations.

And its clear statement (not just an implication) that the law is what parliament intended it to be, not what they actually wrote. Lewis Carroll or Franz Kafka?

Apparently the reason the consultation on T&S was begun was not because there is anything wrong with the concept but because more people ended up getting tax relief that Government initially intended. To my mind, something is either right or it's wrong; it can't be right only when it suits the Government.

[expat]

I don't think they'd be too easily dismissed if we can prove that the proposed legislation changes will impact the wider economy. Businesses use contractors for a reason (as does the Public Sector) and I think we can assume that those reasons will be financial or simply because the particular project doesn't warrant the recruitment of a full time member of staff. Costs of employment will obviously also be a factor. If changes to the way contractors work mean that, ultimately, costs to business and the Public Sector (the tax payer) will increase then it won't be a popular move and, let's face it, if there's one thing a Government wants to be it's popular.

I think battles have been lost but I don't think we've lost the war

I'm not a doom-and-gloom merchant (really) but I think you have your rose-tinted optics on. If tax-avoiding incorporated resources like contractors are seen to be hit for tax, while costs to business and government increase slightly but largely unseen, that will be a popular win.

[LisaContractorUmbrella]

I'm not a doom-and-gloom merchant (really) but I think you have your rose-tinted optics on. If tax-avoiding incorporated resources like contractors are seen to be hit for tax, while costs to business and government increase slightly but largely unseen, that will be a popular win.

You could be right - I am an optimist at heart

However, if son of IR35 goes ahead (as it stands) then it will effectively kill off self-employment in the UK as SDC could be applied to absolutely anyone and the discussion document states:
"those who engage a worker through a PSC would need to consider whether IR35 applies....and, if so, deduct the correct amount of tax and NIC's"
The Tories keep banging on about helping small businesses so can you see Cameron being happy about being responsible for that?

[jamesbrown]

I don't think they'd be too easily dismissed if we can prove that the proposed legislation changes will impact the wider economy. Businesses use contractors for a reason (as does the Public Sector) and I think we can assume that those reasons will be financial or simply because the particular project doesn't warrant the recruitment of a full time member of staff. Costs of employment will obviously also be a factor. If changes to the way contractors work mean that, ultimately, costs to business and the Public Sector (the tax payer) will increase then it won't be a popular move and, let's face it, if there's one thing a Government wants to be it's popular.

I think battles have been lost but I don't think we've lost the war

I'm more optimistic than many around here, but it's an uphill battle. I think it's very important that our representations are unified and evidence-based, rather than based on individual (possibly conflicting) representations. The reason that large banks (for example) are successful in their representations is that they approach HMRC with a single voice, representing a substantial input to the Exchequer. By definition, small business are more fragmented in their views and representations. For that reason, it's critically important to consolidate and present evidence in a unified and fact-based way through organisations like IPSE (rather than fragmented rhetoric).

Edit: I'll also add that it's important for that evidence to be accurate. There have been quite a few posts around here that have referenced the potential "tax loss" to the Exchequer, among other issues, that are simply, factually, incorrect. If these representations are made by individuals, it will dilute the whole process and risk derailing the more cogent representations.

[expat]

You could be right - I am an optimist at heart

However, if son of IR35 goes ahead (as it stands) then it will effectively kill off self-employment in the UK as SDC could be applied to absolutely anyone and the discussion document states:
"those who engage a worker through a PSC would need to consider whether IR35 applies....and, if so, deduct the correct amount of tax and NIC's"
The Tories keep banging on about helping small businesses so can you see Cameron being happy about being responsible for that?

Yes I can. IMHO to them we are not small businesses, we are costs to business. And tax avoiders.

[LisaContractorUmbrella]

I'm more optimistic than many around here, but it's an uphill battle. I think it's very important that any our representations are unified and evidence-based, rather than based on individual (possibly conflicting) representations. The reason that large banks (for example) are successful in their representations is that they approach HMRC with a single voice, representing a substantial input to the Exchequer. By definition, small business are more fragmented in their views and representations. For that reason, it's critically important to consolidate and present evidence in a unified and fact-based way through organisations like IPSE (rather than fragmented rhetoric).

Edit: I'll also add that it's important for that evidence to be accurate. There have been quite a few posts around here that have referenced the potential "tax loss" to the Exchequer, among other issues, that are simply, factually, incorrect. If these representations are made by individuals, it will dilute the whole process and risk derailing the more cogent representations.

And on that note Umbrella Company News - All Umbrella Companies Are Equal

Eek is also putting a survey on the forum after the weekend and we'll be happy to consolidate the results

[LisaContractorUmbrella]

Yes I can. IMHO to them we are not small businesses, we are costs to business. And tax avoiders.

That's not the CUK spirit that I know and love It's in my company's interest for son of IR35 to go through but it's just not right so I'll do what I can to fight it