Spring Budget 2017

[MrMarkyMark]

I know you don't agree, I was disagreeing with you. If they want to increase employment for tax purposes without increasing employment, then a compulsory look through achieves that. A tax deferred is a tax (potentially) avoided (pension payments, moving overseas etc.) and they won't want that in the long-run. If they want to sustain an overly-complicated and approximate treatment of different income streams, they'll mess around with dividend tax and ER, but this has broader implications. As I've said elsewhere, I think they're likely to go with the ugly option in the short-term, but it isn't sensible and it won't be the end of their fiddling.

Cheaper, simple and an "effective" blunt instrument, especially in the simple minds of HMRC

[WordIsBond]

I know you don't agree, I was disagreeing with you.

For some reason I had this strange compulsion to affirm that you hadn't persuaded me with your counterargument. Since I'm now going to be the next Chancellor (as appointed by Lance), it's important for me to be crystal clear on what I'm going to inflict on the country.

If they want to increase employment for tax purposes without increasing employment, then a compulsory look through achieves that.

I do agree with that. I just am not persuaded they really "want to increase employment for tax purposes without increasing employment." I really think all they care about is getting a little more money in to spend on their pet projects, and don't care how it happens. The desire to increase employment for tax purposes without increasing employment is only really a function of the imbalances, and if they reduce them, that desire is likely to go away. There is then no incentive for that desire.

I also agree that compulsory look-through would remove the imbalances. But it would do so at the cost of reducing flexibility, and make it much harder for people to start their own businesses (and I'm not just talking about contractors here). I think it would solve the tax problem but damage the economy.

it won't be the end of their fiddling.

That also is true.

[jamesbrown]

For some reason I had this strange compulsion to affirm that you hadn't persuaded me with your counterargument.

In terms of "increasing employment for tax purposes without increasing employment", I'm essentially paraphrasing what they've stated in their various recent consultations. They want to have income that "looks like" employment taxed as employment income, but they don't want to convey employment rights. They have absolutely no problem with PSCs, in principle, only with their use in avoiding (directly or via the timing of company distributions) employment taxes on what they perceive to be employment income. To them, everything that goes through a PSC is employment income, because it involves "personal service". They want to somehow maintain the flexible workforce, but not at the expense of the "tax gap". If they're really serious in that objective, they won't be satisfied until the income of close companies is subject to PAYE on the controlling persons. Apportionment rules have always been in the back of their minds. Anyway, I guess we'll find out soon enough. What they may be forgetting (or otherwise accepting) is that many of us aren't tied to the UK. We aren't the low-skilled, low-paid, demographic.

[eek]

They want to have income that "looks like" employment taxed as employment income, but they don't want to convey employment rights.

Which is why I've been saying for the past year the battle will be over employment rights. If you treat and tax people like an employee (via not giving them the right of substitution, or subjecting them to supervision, direction or control) you shouldn't be surprised if they decide to seek the rights of employees..

[jamesbrown]

Which is why I've been saying for the past year the battle will be over employment rights. If you treat and tax people like an employee (via not giving them the right of substitution, or subjecting them to supervision, direction or control) you shouldn't be surprised if they decide to seek the rights of employees..

Sure, but I don't anticipate anything spectacular. I don't believe it's a battle any of us wanted (I don't want "rights"), so it's going to be difficult to motivate people, and it won't be an easy one to win, because the legislative basis for employment rights (e.g. Employment Rights Act) is completely different than tax (ITEPA), even though employment case law is used to determine employment status for tax purposes. There's probably some mileage in demonstrating sufficient D&C to be a "worker" and, for agency workers, parity of rights under the AWR, but I can't help thinking "meh". I expect most people will either suck it up (seek employment) or reject it completely (move overseas) and those without too many choices will end up as FTCs.

[PurpleGorilla]

Spring Budget 2017

The prole working class living off hand outs and Jeremy Kyle silk benefits wrapped around an iron fist of zero hours contracts.

They want all of you wage slaved up in the outer party; resistance is futile.

Whilst the inner cream at the top break every rule.

[Fred Bloggs]

Sure, but I don't anticipate anything spectacular. I don't believe it's a battle any of us wanted (I don't want "rights"), so it's going to be difficult to motivate people, and it won't be an easy one to win, because the legislative basis for employment rights (e.g. Employment Rights Act) is completely different than tax (ITEPA), even though employment case law is used to determine employment status for tax purposes. There's probably some mileage in demonstrating sufficient D&C to be a "worker" and, for agency workers, parity of rights under the AWR, but I can't help thinking "meh". I expect most people will either suck it up (seek employment) or reject it completely (move overseas) and those without too many choices will end up as FTCs.

Fair assessment. I find it hilarious that contractors are going to fight for employee rights! FFS, be an employee then!

Myself, I am 7 months ahead of you, I left the UK last August. So Hector gets precisely zero from me now.

[eek]

Sure, but I don't anticipate anything spectacular. I don't believe it's a battle any of us wanted (I don't want "rights"), so it's going to be difficult to motivate people, and it won't be an easy one to win, because the legislative basis for employment rights (e.g. Employment Rights Act) is completely different than tax (ITEPA), even though employment case law is used to determine employment status for tax purposes. There's probably some mileage in demonstrating sufficient D&C to be a "worker" and, for agency workers, parity of rights under the AWR, but I can't help thinking "meh". I expect most people will either suck it up (seek employment) or reject it completely (move overseas) and those without too many choices will end up as FTCs.

yep I can't personally see anything to gain by playing the employment rights game but it is just about the only game in play...

[jamesbrown]

Fair assessment. I find it hilarious that contractors are going to fight for employee rights! FFS, be an employee then!

Myself, I am 7 months ahead of you, I left the UK last August. So Hector gets precisely zero from me now.

At this rate, I may be right behind you. I WFH, so the only thing that ties me here is family and friends. I contracted overseas for 10+ years before 5 years ago, so it was wearing thin for them and me, but that was 5 years ago...

[jamesbrown]

yep I can't personally see anything to gain by playing the employment rights game but it is just about the only game in play...

It's akin to kicking someone in the nads before they shoot you in the head. But you kicked them in the nads, so there's that.