House of Lords review & IR35, PCG

[Zero Liability]

They seem very selective in when they listen to the Lords (i.e. ignoring their counsel to delay the very clumsily designed disguised employment rules re partnerships), though I am certain if they're given the go-ahead for plundering contractors, they'll follow suit with their recommendations merrily.

[cojak]

Thanks GB9; I have the extended report but am after the one in which this chap MA's controversial evidence is said to have been contained.

I understood from the above (pages 3 & 4 in @malvolio's AND @EMEAfixer's posts) that there was a pre-release, which is no longer on the HLSC's site (the 158-pager) and not anywhere on the net and not even in archived/chached form!

Therefore, I thought it good to check with this thread and forum just in case anyone managed to download a copy of whatever early release there may have been.....Would be most grateful if anyone would be able to facilitate.

Which would mean that that evidence has been discounted.

[DonkeyRhubarb]

Has any estimate been made of how much extra revenue could be raised if PSCs were taxed as PAYE?

[malvolio]

Has any estimate been made of how much extra revenue could be raised if PSCs were taxed as PAYE?

Nope. And how could it be done, given there is no such thing as a PSC, or at least any legal definition of one that could be used to separate them from any other Limited Company. Don't forget, Philip Green (or his wife, to be strictly accurate, since she's the sole shareholder) and Richard Branson both operate through companies that could easily be described as PSCs.

[DonkeyRhubarb]

Nope. And how could it be done, given there is no such thing as a PSC, or at least any legal definition of one that could be used to separate them from any other Limited Company. Don't forget, Philip Green (or his wife, to be strictly accurate, since she's the sole shareholder) and Richard Branson both operate through companies that could easily be described as PSCs.

Surely if HMRC are claiming widespread abuse of incorporation they must be able to put a figure on it even if it's only finger in the air.

PS.

Finger in the air. 200,000 contractors "underpaying" by on average £20k = £4Bn/year

[malvolio]

Surely if HMRC are claiming widespread abuse of incorporation they must be able to put a figure on it even if it's only finger in the air.

PS.

Finger in the air. 200,000 contractors "underpaying" by on average £20k = £4Bn/year

Alternative finger in the air - 2.5 million PSCs (the count according to PCG's research) contributing £45bn to the UK economy and all paying all their taxes correctly - £0bn per year.

Let's not do Hector's work for him. Leave him to cost justify his work; after all, he hasn't managed to convince anyone yet.

[Zero Liability]

Surely if HMRC are claiming widespread abuse of incorporation they must be able to put a figure on it even if it's only finger in the air.

PS.

Finger in the air. 200,000 contractors "underpaying" by on average £20k = £4Bn/year

Besides what Malvolio mentioned, based on their most recent (dubious) figures it costs them £700,000 a year to enforce. There's no reason to think simply upping the number of investigations (currently at around 0.01% of the supposed PSC total) will improve the cost-efficiency of the legislation, even on very rosy estimates of how much there is to loot, and these are just direct costs, not total economic losses. Quite the contrary, it will probably worsen its cost-efficiency.

[DonkeyRhubarb]

Besides what Malvolio mentioned, based on their most recent (dubious) figures it costs them £700,000 a year to enforce. There's no reason to think simply upping the number of investigations (currently at around 0.01% of the supposed PSC total) will improve the cost-efficiency of the legislation, even on very rosy estimates of how much there is to loot, and these are just direct costs, not total economic losses. Quite the contrary, it will probably worsen its cost-efficiency.

One of the reasons IR35 is toothless is that HMRC can only apply it on an individual case by case basis. This makes it a totally impractical rule to enforce.

Contrast this with the way they can attack avoidance schemes, where a single tribunal win can net them hundreds or even thousands of tax payers in one fell swoop.

[Zero Liability]

It also looks rather pathetic, if they're so eager to carp on about 'fairness' and such, to go after contractors in lieu of MNCs. I don't support them persecuting either in a bid to patch up the holes left by the government's utter inability to manage its finances, but if they were truly that eager to cash in, that would be the more appropriate target. The reason they don't is probably because these firms have armies of lawyers to eviscerate them in court, and besides that, can relocate and tell the government to get stuffed if push comes to shove. I suspect it's the same reason they don't go after employer's NICs from our end clients for those who are found to be caught by IR35 upon an investigation. Going after contractors en masse is unlikely to bring in much dosh, especially based on the current working of IR35. Both MNCs and the freelancer market of course contribute extensively to the UK economy, so at best it'd yield short-term gains.

If the intention is to harmonise NI with the income tax, I suspect it'll remain in force as it is, until that happens, and thereafter it'll be abolished since it will be superfluous, depending on how they set the tax rates. I don't see them getting away with high taxes on lower income earners and the middle class (the latter of which contractors predominantly fall into) if they do get merged and the overall cost of NI becomes more blatantly obvious; it is an employment tax however you slice it. Especially given the current government's avowed devotion to SMEs and the middle class. The Lib-dems touted abolishing IR35 not too long ago.

[habanero]

Which would mean that that evidence has been discounted.

Thanks Cojak - detective precision indeed......

I appreciate the input yet it is not the assistance I was quite seeking. You will be pleased to know that even with my rather limited powers of deduction, I had rather understood and was able fully to appreciate the implication of the exclusion of the 'evidence' in question.

Whether or not the 'evidence' has been exluded in the final draft is neither here nor there and does not feature at all in why I am trying to find the pre-release copy - mea culpa as I realise that I may have failed to make this patently obvious in reference to the same.

Many thanks in any event - appreciated!