HMRC - Onshore_employment_intermediaries_-_false_self_employment.pdf

[tarbera]

Looks like the end of contracting, are the government so clueless.?


https://www.gov.uk/government/upload...employment.pdf

Finally HMRC have defined a PSC (page 34)


PCG response here -->

PCG seeks clarity from HMRC after agency changes | PCG

[cojak]

[TheCyclingProgrammer]

Already discussed here:

http://forums.contractoruk.com/busin...-contract.html

If you'd read it properly you would see that there is very little interaction with IR35 and is about targeting agencies who take on workers as "self employed" when they should really be employed. The updated legislation for agency workers shifts the focus if self employment tests away from personal service and onto control. As it stands, the new legislation makes sense.

So no, not the end of contracting.

[SteelyDan]

Yep, I ran this by my accountant who advised: not applicable - you’re not self employed

Page 34:
Personal Service Company
A personal service company (PSC) is a small limited company through which an owner/director provides their own personal services. FTFY - FFS! Can't even get that bit right!

[tarbera]

Page 42

So no, not the end of contracting.

Page 42 example 1 unless your a computer programmer

[SteelyDan]

Page 42 example 1 unless your a computer programmer

Aren't u missing the point, somewhat?

[TheCyclingProgrammer]

Page 42 example 1 unless your a computer programmer

You've missed the point completely.

I suggest you re-read it. This only applies if an agency hires an individual as "self employed" when in reality they should be considered an employee.

It's similar to IR35, but for individuals rather than PSCs. And the test for employment vs self employment are similar.

Short answer: it is still perfectly possible to be a contractor operating through a Ltd company (IR35 tests apply) or a self-employed contractor if you satisfy the tests for self employment (but if you are self employed and go through an agency the updated agency regulations will apply and you will not be able to rely on a right if substitution clause to show you are self employed).

Existing case law means a RoS clause is still one of the main tests as far as IR35 goes and these changes, while interesting, do not change that.

[DaveB]

Looks like the end of contracting, are the government so clueless.?


https://www.gov.uk/government/upload...employment.pdf

Finally HMRC have defined a PSC (page 34)


PCG response here -->

PCG seeks clarity from HMRC after agency changes | PCG

But they haven't defined "small", or covered companies where the director provides services alongside an employee or co-director.

They also appear to be saying that RoS clauses in contracts are basically an avoidance technique colluded in by all parties.

2.6. One of these tests is that the worker is obliged to provide their services
personally. This test in particular is being exploited. The intermediaries, that are
the focus of this consultation, attempt to sidestep this test by claiming that there
is no obligation for the worker to provide their services personally. This may be
done by including a clause in the contract that states the worker is able to send
someone else to do their work. In fact this is often not the case because in reality
the engager wants that specific worker. There is often collusion between the
parties, as they all benefit from presenting the worker as being self-employed. In
such cases it can be difficult for HMRC to prove that the reality of the situation is
different from that presented in the contracts.

[tarbera]

What about 44-47 of ITEPA ?

You've missed the point completely.

I suggest you re-read it. This only applies if an agency hires an individual as "self employed" when in reality they should be considered an employee.

It's similar to IR35, but for individuals rather than PSCs. And the test for employment vs self employment are similar.

Short answer: it is still perfectly possible to be a contractor operating through a Ltd company (IR35 tests apply) or a self-employed contractor if you satisfy the tests for self employment (but if you are self employed and go through an agency the updated agency regulations will apply and you will not be able to rely on a right if substitution clause to show you are self employed).

Existing case law means a RoS clause is still one of the main tests as far as IR35 goes and these changes, while interesting, do not change that.

What about 44-47 of ITEPA meaning it will really be end up as the newly defined PSC, when they think about it

[TheCyclingProgrammer]

They also appear to be saying that RoS clauses in contracts are basically an avoidance technique colluded in by all parties.

In the case of agency workers, that's *exactly* what RoS clauses were being used as, hence the updated legislation to close that loophole. Although in many cases the worker wasn't even aware of this (as the self employment status was being exploited by the agencies for their own benefit).