So...anybody ask for any of this?

[TykeMerc]

This is flawed because of the logic below. Anyone sensible wants to keep money untaxed for a rainy day.


Being taxed at 45% one year and being on JSA the next is insane but is a logical step within this logic....

It really is a half baked plan....

Indeed plus it's clearly a duck shaped object we've discussed earlier.

If anyone has any doubt that this FLC will become mandatory either directly by rules or effectively so by the behavior of the Agencies then they're naive or deluded.
It's so obvious from the article (which aligns so closely with the suspicions raised by posters once they heard of this) that the tax treatment is effectively inside IR35 for all and possibly even less advantageous.
This does of course explain why the former PCG has backed away from IR35 opposition as it's a total capitulation, not that they would ever admit that.

[Pondlife]

Seriously, where's the upside for a contractor?

You get all the tax incentives of a brolly with the added benefit of the legal responsibilities of a Ltd Director.

[TykeMerc]

Seriously, where's the upside for a contractor?

A very good question. I believe the IPSE people should give us those details and a clear benefits case as it's "their" proposal, I can't see an upside either and a fairly sizable number of downsides.

[The Spartan]

I read the article about FLC's and it made me physically cringe, what a horrible idea I agree with the other posters that voluntary or not it would soon be made more or less mandatory.

Which burk actually came up with this idea?

[jamesbrown]

A very good question. I believe the IPSE people should give us those details and a clear benefits case as it's "their" proposal, I can't see an upside either and a fairly sizable number of downsides.

For legitimate contractors? There's no upside. For the 4.5 million self-employed people that IPSE is now targeting, they get self-employment plus limited liability. So, everyone's a winner*







*Contractors rounded out.

[Goatfell]

You get all the tax incentives of a brolly with the added benefit of the legal responsibilities of a Ltd Director.

Champion, I knew there must be something I was missing...

[malvolio]

Can we just recap for a moment:

- We don't know what it is nor how it's going to work
- and there have been no discussions on how it's going to work
- and the underlying logic was not considered nor any kind of risk analysis done
- but it won't provide any benefits for us who use Ltds or Umbrellas
- and there are no other kinds of contractors or self employed workers for it to apply to
- nevertheless we will be forced to use it by "them" and our existing companies closed down
- and as soon as we are it will be taxed into oblivion
- so it's clearly a VERY BAD THING and should not be pursued just in case it actually works and has a real purpose

Just so we are all clear on the case against.

[GlenW]

Can we just recap for a moment:

- We don't know what it is nor how it's going to work
- and there have been no discussions on how it's going to work
- and the underlying logic was not considered nor any kind of risk analysis done
- but it won't provide any benefits for us who use Ltds or Umbrellas
- and there are no other kinds of contractors or self employed workers for it to apply to
- nevertheless we will be forced to use it by "them" and our existing companies closed down
- and as soon as we are it will be taxed into oblivion
- so it's clearly a VERY BAD THING and should not be pursued just in case it actually works and has a real purpose

Just so we are all clear on the case against.

Looks like the plan is working then.

[NotAllThere]

This is flawed because of the logic below. Anyone sensible wants to keep money untaxed for a rainy day.

Back in the day of true contractors, we spent all we earned. Of course, we claimed a lot more back against tax, and the taxation bands higher (in proportion to average income).

Being taxed at 45% one year and being on JSA the next is insane.

No. It's perfectly reasonable. It happens to permies all the time. Anyway, plenty of contractors pay tax at 20% (or whatever the standard rate is now) one year and are on JSA the next (Psychocandy-like) - because they couldn't find a new contract.

Right now, I have no option for a warchest as you describe. I cannot take money out of my company via dividends. Yet here I am, still contracting, and with an income higher than it has ever been. The only difference between my set up and being fully IR35'd nobbled, is that I can claim all kinds of expense before calculating tax.

[jamesbrown]

Can we just recap for a moment:

- We don't know what it is nor how it's going to work
- and there have been no discussions on how it's going to work
- and the underlying logic was not considered nor any kind of risk analysis done
- but it won't provide any benefits for us who use Ltds or Umbrellas
- and there are no other kinds of contractors or self employed workers for it to apply to
- nevertheless we will be forced to use it by "them" and our existing companies closed down
- and as soon as we are it will be taxed into oblivion
- so it's clearly a VERY BAD THING and should not be pursued just in case it actually works and has a real purpose

Just so we are all clear on the case against.

"Risk analysis"

Potential benefits to contractors:



Potential costs to contractors:

See pages 1-28 above.

Risk analysis is awfully hard unless you're talking about a single group bearing the same costs and benefits..... unless, of course, your subscription remit has just expanded to cover all groups....