I don't see a problem with the term true contractor, proper contractor, real contractor or whatever. There is a big difference between those that run their affairs properly and those that don't have a clue. It's because we don't differentiate we are going tonight a sledgehammer that's going to affect us all. If HMRC did a decent job in the last we might not be here. Discuss
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
Worst case scenario
Collapse
X
Collapse
-
-
Originally posted by jamesbrown View PostThe only compromise I can see is that the contractor is required to operate a deemed payment and must provide proof of that deemed payment to the client, in order to mitigate their risk. That way, the client polices the arrangement, by judging status and seeking assurances from the contractor, but it remains off payroll. I can't envisage a halfway mechanism that doesn't encounter all sorts of problems (contractual arrangement, lack of limited liability, transfer of PAYE from business to contractor etc.). For those instances where an arrangement is deemed outside, the client may nevertheless require the contractor to indemnify them by way of an insurance policy (much like the current offerings, but for clients rather than contractors).
I think we need to separate out 'policing' and 'enforcement' :-
The 'policing' is in the pre-judging of status, that's all. Easily dealt with in standard contract wording.
The 'enforcement' is anything that gets the tax paid. Ignoring the contract, or lying to your accountant, in order to avoid tax, isn't avoidance - it's evasion and a criminal matter - that should be enough.Comment
-
Originally posted by Contreras View PostYes it could be implemented like that, but it doesn't need to be so onerous for the client.
I think we need to separate out 'policing' and 'enforcement' :-
The 'policing' is in the pre-judging of status, that's all. Easily dealt with in standard contract wording.
The 'enforcement' is anything that gets the tax paid. Ignoring the contract, or lying to your accountant, in order to avoid tax, isn't avoidance - it's evasion and a criminal matter - that should be enough.Comment
-
There is another sledgehammer approach which hasn't been discussed.
If a ClientCo decides a contractor should be IR35-able, they could simply refuse to engage you as a LtdCo at all - and only offer you the contract on a PAYE umbrella basis.
Think this is bonkers - there'e nothing to stop them engaging with you as a sole trader, but 99.99% don't because it renders them liable. Likewise some agencies have a whitelist of umbrellas - sometime due to commission, but also to avoid the offshore guys.Comment
-
Originally posted by northernladuk View PostI don't see a problem with the term true contractor, proper contractor, real contractor or whatever. There is a big difference between those that run their affairs properly and those that don't have a clue. It's because we don't differentiate we are going tonight a sledgehammer that's going to affect us all. If HMRC did a decent job in the last we might not be here. Discuss
It depends on your interpretation of "if HRMC did a decent job". From the HMRC perspective they probably felt they did a good job as they made the legislation so vague that people would be scared into paying. From the legal/insurance perspective it has also been very lucrative allowing the likes of QDOS do very nicely.
Originally posted by centurian View PostThere is another sledgehammer approach which hasn't been discussed.
If a ClientCo decides a contractor should be IR35-able, they could simply refuse to engage you as a LtdCo at all - and only offer you the contract on a PAYE umbrella basis.
Think this is bonkers - there'e nothing to stop them engaging with you as a sole trader, but 99.99% don't because it renders them liable. Likewise some agencies have a whitelist of umbrellas - sometime due to commission, but also to avoid the offshore guys.Comment
-
Originally posted by LisaContractorUmbrella View PostIt's not quite that simple though it is?
It's very much down to the individual, their circumstances and what motivates them. I'd personally keep contracting because my work is project-based. Delivering something then dying of boredom for 3 years as I "support" it is what turned me to contracting in the first place.The greatest trick the devil ever pulled was convincing the world that he didn't existComment
-
Originally posted by LondonManc View PostThat's why I said it depends. That's without knowing the full state of IR35Mk2. People are bouncing ideas around based on worst case.
It's very much down to the individual, their circumstances and what motivates them. I'd personally keep contracting because my work is project-based. Delivering something then dying of boredom for 3 years as I "support" it is what turned me to contracting in the first place.
Expat in "2 days from end of contract and not looking yet" mode.Comment
-
In case you haven't seen it How HMRC is revoking tax relief on contractor expenses :: Contractor UK. We found out yesterday that HMRC will be applying the same criteria to establishing SDC as they do in the agency legislation contained within section 44(2) of ITEPA i.e. if you work through an agency there will be an automatic presumption of SDC.Comment
-
I'm wondering how this will effect current contracts, for example my current role runs until July 2016. So I'm guessing from April 2016 I'll be screwed if everything goes through as it presently stands if HMRC are using the SDC criteria from section 44(2) ITEPA, is there a possibility it will be applied to the whole duration of the contract?In Scooter we trustComment
-
Thanks for link Lisa... I think
Oddly, the agencies are the last element who are likely to wield SDC and easiest to prove they don't, but it doesn't seem like there's any way to demonstrate that as it's a case of 'we say they do'Comment
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Comment