Originally posted by PhilBreeze
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Good morning Lisa. A lot there to cover but cutting to one of the more important points:
There are several providers out there offering self-employed solutions to contractors, claiming they are Finance Act 2011 compliant. "FA2011 only applies to employees" is their logic, however they seem to have overlooked the fact that self-employment is not a choice, as most contractors will be aware, your employment status is derived from an inherently complex set of criteria itself derived from years of employment and tax tribunal decisions.
In other words, you can only set yourself up as self-employed if you are "outside IR35", and most contractors can't hand-on-heart claim to be 100% certain of their of their employment status..
These self-employed trust solutions seem to get around Finance Act 2011 but consider what happens if HMRC investigate your self-employed status and determine you're actually a deemed employee of your client? Suddenly your only defense against FA2011 has disintegrated and HMRC can potentially apply the legislation to your newfound "deemed employment"..
This is my interpretation of HMRC's intent above and indeed they wouldn't even need new legislation to act, just a bunch of contractors they are confident will fail an employment status review.
I would only use one of the self-employed structures if I was 100% certain of self-employed status, and I'm surprised how frequently this key criterion is being overlooked by the promoters offering them. I've mystery shopped some of them and asked the direct question and been told it doesn't really matter....
As for the rest, I've got two House of Lords decisions in favour of our product that I reckon trump your vague loosely targeted HMRC propaganda.. however if you know of any actual legislation or case law that our product does not comply with, I would be interested (staggered) to hear it
back to you...
There are several providers out there offering self-employed solutions to contractors, claiming they are Finance Act 2011 compliant. "FA2011 only applies to employees" is their logic, however they seem to have overlooked the fact that self-employment is not a choice, as most contractors will be aware, your employment status is derived from an inherently complex set of criteria itself derived from years of employment and tax tribunal decisions.
In other words, you can only set yourself up as self-employed if you are "outside IR35", and most contractors can't hand-on-heart claim to be 100% certain of their of their employment status..
These self-employed trust solutions seem to get around Finance Act 2011 but consider what happens if HMRC investigate your self-employed status and determine you're actually a deemed employee of your client? Suddenly your only defense against FA2011 has disintegrated and HMRC can potentially apply the legislation to your newfound "deemed employment"..
This is my interpretation of HMRC's intent above and indeed they wouldn't even need new legislation to act, just a bunch of contractors they are confident will fail an employment status review.
I would only use one of the self-employed structures if I was 100% certain of self-employed status, and I'm surprised how frequently this key criterion is being overlooked by the promoters offering them. I've mystery shopped some of them and asked the direct question and been told it doesn't really matter....
As for the rest, I've got two House of Lords decisions in favour of our product that I reckon trump your vague loosely targeted HMRC propaganda.. however if you know of any actual legislation or case law that our product does not comply with, I would be interested (staggered) to hear it
back to you...
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