Labour cosying up to contractors

[Zero Liability]

I thought HMRC's estimates put PSCs at 200k? Or are they way off? That's what I'm asking.

[tractor]

Why? Seriously - 1.75 million at most, average profits around £50k each, add 40% to CT rates and they take in a whole £35m a year extra. And piss off 1.75 million voters. Not forgetting it's not about tax income per se, it's about preventing artificial avoidance.

The objective is not about taxation, it's about opportunity and lack of interference.

Utter tosh!

IR35 was never, ever supposed to be a taxation measure; it was meant specifically as a deterrent and to a degree it worked but only insofar as it deterred some. Yes, there are many contractors who declare themselves inside and go brolly but many contractors didn't even (still don't) know IR35 existed much less how it worked. Many accountants can't even help because they don't understand employment law and all the other areas that are involved and some are positively dangerous in their advice. IR35 had no hope of catching those nor the belligerents who say 'The chance of me being investigated is so small it's not worth worrying about' and ignore it completely.

So in some measure, it worked. However it didn't solve the problem as far as HMG and HMRC see it, they want as many of us back in permiedom as they can get. The only way they can seriously hope to do that is by encouragement (coercion) and I suspect their aim with all this is to categorise us where the law is unable to by offering us a 'new vehicle' which they can then manipulate into a broadly neutral tax position, making it marginal whether we put up with the hassle of owning a company with minimal benefits.

You have to remember that our industry still works largely on the BoS model it always did, nothing has changed there, so those who sub contract and regularly substitute are in a very small minority. Those are the only ones that will benefit from this new vehicle that Labour and IPSE are promoting.

So that part of the Labour proposal is of no interest to me whatsoever and any organisation purporting to represent me in supporting the matter are entirely wrong. I am not self-employed. I don't want another company vehicle. I own a company and that is the way it will stay.

And piss off 1.75 million voters. Who are you trying to kid? They really cared about that when they introduced IR35 didn't they LOL. Do you really believe the stuff that you type? Or do you really think Labour have changed?

Edit:

Oh and I almost forgot, about this 'artificial avoidance' claim. You have to remember that the reason we use this business model stems from the '70's when we were railroaded into it to separate us from self-employed plumbers and decorators who routinely paid nothing into the system. Our model is an unintended consequence brought about by poor legislation on top of poor legislation.

They have had 45 years since then to tidy it up and make it fit for purpose. But they and now you, declare that we are artificially avoiding tax.

[jamesbrown]

I thought HMRC's estimates put PSCs at 200k? Or are they way off? That's what I'm asking.

I assume this is an estimate of the number of freelancers in the UK and hence an upper limit on the potential adoption of this new structure, not the number of Ltd companies with a single director (if that's what you mean by PSC). There's no legal definition of a PSC, so it's speculative how many might exist, but I think the evidence to the Select Committee (from HMRC) mooted 200k.