Government to consult on tax avoidance in the private sector

[PerfectStorm]

https://www.gov.uk/government/news/g...private-sector

read and respond here: https://www.gov.uk//government/consu...private-sector

[jamesbrown]

Interesting, thanks - this was due. Might be worth punting to Future of Contracting...

[jamesbrown]

The government considers extension of similar reform to the private sector to
be the lead option which will effectively tackle non-compliance. As set out in
Chapter 4, the government recognises that public authorities faced challenges
in implementing the reform and that this is a concern for businesses and
individuals working in the private sector. We would therefore like to explore
whether the design of the reform and the implementation process could be
improved

I'm shocked. Shocked.

[Old Greg]

The whole thing is a mess.

Ireland has this sorted better*, if not perfectly. There is no tax advantage to the low salary + CT + divis model, so everything is paid as salary. But PRSI (NIC) is applied as if you were a sole trader (more or less). There are rules about disguised employment but they don't cause that same angst.

Having said that, the rules around travel and subsistence to your main place of work are bad, but that doesn't affect most people in Dublin as annual train / bus / tram / passes come out of your pre-tax salary - in effect I pay about €100 per month for my train and tram ticket for a 30km commute.


* The caveat is that the overall tax rate is high with the income thresholds for higher rate kicking in at €35k. Comments above are about the structure rather than the rates.

[eek]

Don't worry only about 30% of contractors will be caught - which is identical to what was supposed to be the case in the public sector.

However, companies really don't like HMRC inspecting their tax affairs though so 90% of companies will be going for blanket bans much in the same way the public sector went.

Glad I've hopefully left contracting for good as this is the end of it.

[ChimpMaster]

Don't worry only about 30% of contractors will be caught - which is identical to what was supposed to be the case in the public sector.

However, companies really don't like HMRC inspecting their tax affairs though so 90% of companies will be going for blanket bans much in the same way the public sector went.

Glad I've hopefully left contracting for good as this is the end of it.

I'm nearly there too.

One big tax bill to pay, and then just waiting to run this contract down the last few months ... and I'm out. Will close down, MVL and ride off into the sunset.

[saptastic]

The fact that the title includes the word 'tax avoidance' directs the conversation.

[Old Greg]

I'm nearly there too.

One big tax bill to pay, and then just waiting to run this contract down the last few months ... and I'm out. Will close down, MVL and ride off into the sunset.

Well done. What's your plan?

[sal]

Don't worry only about 30% of contractors will be caught - which is identical to what was supposed to be the case in the public sector.

However, companies really don't like HMRC inspecting their tax affairs though so 90% of companies will be going for blanket bans much in the same way the public sector went.

Glad I've hopefully left contracting for good as this is the end of it.

Even in the PS it was far lower than 90% blanked "ban".

In the private sector they will just get an insurance form the likes of QDOS and keep their costs much lower than if they have to blanket declare everyone inside IR35.

The end result will be that tax intake for HMRC will be roughly the same.

[jonnieboy]

But for HMRC to release this within 48 hours of losing an IR35/contractor case AGAIN - if HMRC cannot get the rules right, what hope is there for the private sector? The CEST tool gives an HMRC-view of IR35 which doesn't seem to take account of cases decided at tribunal. As usual, the whole thing is a mess