Morning Chaps 
Well, the bad news is that they are not scrapping IR35
They also seem to have had a bit of a re-think on the SDC option saying that it is not necessarily the focus now of the changes but it is being considered. What's more important is whether or not it's a good idea to pass the burden of status determination to the end client and how they can ensure greater compliance with the legislation (in whatever form it takes). HMRC's analysts have told them that only about 10% of contractors who should be working under IR35 are and that this costs the Treasury (or the tax payer) £430 million per year. I questioned their figures as I cannot see how analysts can possibly determine working practices with any particular effectiveness but the team heading the discussion were not able to provide information on how the data was gathered or how it was analysed in order to produce these figures. It's my feeling that the figures are inaccurate and that we should provide them with something a bit more reliable.
There was a contractor at the meeting
and he pointed out that, if he was an employee, why should he pay VAT - simple question but it got me thinking. For the last 14 years HMRC have been asking contractors to prove that they are not a disguised employees; wouldn't it be simpler to prove that you are in business? The Business Entity Tests were over complicated and unrealistic as the questions were more appropriate for larger businesses than single person Limited Companies.
HMRC are also concerned about the number of low paid workers operating through PSC's (the same complaint that we had at the T&S consultation). We tried to explain to them that, if that's the problem then these proposed changes to IR35 are unlikely to stop the practice, it just means that the low paid workers who are being forced to work through PSC's will be worse off than they are now and contractors who are genuinely in business on their own account will be unjustly affected.
To this end we would like to prove to HMRC that 1. their numbers are incorrect and their assumptions wrong and 2. there is a difference between a genuine contractor and a temp/labourer/shelf stacker who's been forced into running a PSC without knowing the first thing about it.
To do this we need your help (again) and would ask you to please complete another survey (I know, I know)HMRC issue discussion document on IR35 Legislation, AUCAE urge contractors to #haveyoursay - All Umbrella Companies Are Equal .
HMRC are again asking for written submissions which, as with the T&S consultation, have to be in by the end of this month so I will be spending the next week frantically typing - can you lot please complete the survey and then get it out to as many people as possible via social media.
For those of you who are cynical - it would help my business if these new proposals came in as, if determination lay with the end client, no-one would be working outside IR35 especially if the determinant is SDC, making umbrella companies more appealing. However, I believe that contractors are not employees and should be free to chose to work in the way that's most suitable for them within the law. HMRC are attempting to bring in legislation which will force highly specialised, highly skilled contractors down the PAYE route because they don't think it's 'fair' to bring in alternative legislation which would remove low paid workers who've been forced into self-employment back into employment.
Last point - if any of you have any proposals for an alternative to IR35 that would solve the problems above please let me know and I will forward to HMRC - they did ask for alternatives so maybe if we can come up with something better than IR35 we will finally see the back of it.
Well, the bad news is that they are not scrapping IR35
They also seem to have had a bit of a re-think on the SDC option saying that it is not necessarily the focus now of the changes but it is being considered. What's more important is whether or not it's a good idea to pass the burden of status determination to the end client and how they can ensure greater compliance with the legislation (in whatever form it takes). HMRC's analysts have told them that only about 10% of contractors who should be working under IR35 are and that this costs the Treasury (or the tax payer) £430 million per year. I questioned their figures as I cannot see how analysts can possibly determine working practices with any particular effectiveness but the team heading the discussion were not able to provide information on how the data was gathered or how it was analysed in order to produce these figures. It's my feeling that the figures are inaccurate and that we should provide them with something a bit more reliable.There was a contractor at the meeting
and he pointed out that, if he was an employee, why should he pay VAT - simple question but it got me thinking. For the last 14 years HMRC have been asking contractors to prove that they are not a disguised employees; wouldn't it be simpler to prove that you are in business? The Business Entity Tests were over complicated and unrealistic as the questions were more appropriate for larger businesses than single person Limited Companies. HMRC are also concerned about the number of low paid workers operating through PSC's (the same complaint that we had at the T&S consultation). We tried to explain to them that, if that's the problem then these proposed changes to IR35 are unlikely to stop the practice, it just means that the low paid workers who are being forced to work through PSC's will be worse off than they are now and contractors who are genuinely in business on their own account will be unjustly affected.
To this end we would like to prove to HMRC that 1. their numbers are incorrect and their assumptions wrong and 2. there is a difference between a genuine contractor and a temp/labourer/shelf stacker who's been forced into running a PSC without knowing the first thing about it.
To do this we need your help (again) and would ask you to please complete another survey (I know, I know)HMRC issue discussion document on IR35 Legislation, AUCAE urge contractors to #haveyoursay - All Umbrella Companies Are Equal .
HMRC are again asking for written submissions which, as with the T&S consultation, have to be in by the end of this month so I will be spending the next week frantically typing - can you lot please complete the survey and then get it out to as many people as possible via social media.
For those of you who are cynical - it would help my business if these new proposals came in as, if determination lay with the end client, no-one would be working outside IR35 especially if the determinant is SDC, making umbrella companies more appealing. However, I believe that contractors are not employees and should be free to chose to work in the way that's most suitable for them within the law. HMRC are attempting to bring in legislation which will force highly specialised, highly skilled contractors down the PAYE route because they don't think it's 'fair' to bring in alternative legislation which would remove low paid workers who've been forced into self-employment back into employment.
Last point - if any of you have any proposals for an alternative to IR35 that would solve the problems above please let me know and I will forward to HMRC - they did ask for alternatives so maybe if we can come up with something better than IR35 we will finally see the back of it.
guys 
It was all put together after the meeting yesterday so all pretty quick
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