Crackdown on personal service companies could raise £400m in tax

[Zero Liability]

All that remains is to see when this will be effective from.

But hey, if we had voted Labour in, it'd have been immediate, so what a relief that that didn't happen, right?

[GB9]

"Do you direct the contractor?"

"No"

"Do you exercise control over the contractor"

"No"

"Can the contractor provide a substitute"

"Yes"

Result

"IR35 applies to this contract"

Seems like an automated version of HMRC's ir35 help desk.

[mudskipper]

Here you go:
Leaked IR35 plan to hit PSC contractors 'confirmed' :: Contractor UK

Can't believe this thread dropped off the front page Some more details about we might see next week. Very interesting stuff.

"The finer details of the leaked proposal with the potential to reform IR35 and the rules on personal service companies (PSCs) have been obtained by ContractorUK."

Are you able to reveal your sources?

[GB9]

The ESI test would deem you an employee not a worker so would get full rights. I guess that's why we see FTC not zero hour contracts at the moment.

No, it would deem ir35 to apply. Completely different to being an employee. And not a ftc either.

It would be day rate, no employee rights but income to be deemed as salary and taxed accordingly. In my book that would still be a damn sight better than on payroll ftc.

However, it looks like expenses will go for everyone, thus restricting most people to local work. That seems a significant mistake.

Clients would be forced to consider what they wanted though. E.g. a specialist who came in to do a specific piece of work and then go could be classed as outside ir35. Someone in to do a backfill role could be deemed within ir35.

Imo clients wanting specialists would struggle to get them within IR35 unless they paid more for them. I would expect my current client to declare as outside or put my rate up.

[VectraMan]

No, it would deem ir35 to apply. Completely different to being an employee. And not a ftc either.

WHS. I don't know where this idea that because you pay full income tax you have employment rights come from. Umbrella and inside IR35 contractors have been operating this way for years without getting employment rights.

Presumably the test will be written in a way that makes being inside IR35 the norm rather than the exception as it is now. Which is probably fair enough IMO as the worst thing about it was the vagueness and uncertainty. If they say clearly what the rules are then we can all make decisions on that basis with no ambiguity, getting legal opinions or worrying about possible investigations.

[BlueSharp]

No, it would deem ir35 to apply. Completely different to being an employee. And not a ftc either.

It would be day rate, no employee rights but income to be deemed as salary and taxed accordingly. In my book that would still be a damn sight better than on payroll ftc.

However, it looks like expenses will go for everyone, thus restricting most people to local work. That seems a significant mistake.

Clients would be forced to consider what they wanted though. E.g. a specialist who came in to do a specific piece of work and then go could be classed as outside ir35. Someone in to do a backfill role could be deemed within ir35.

Imo clients wanting specialists would struggle to get them within IR35 unless they paid more for them. I would expect my current client to declare as outside or put my rate up.

I agree that's the intention of the change, however by using the ESI rules to determine IR35 status surly that would mean you are an employee if you are under SDC?

The client would have to admit that they have SDC over you, this would be more than enough proof to be classed as an employee. Plenty of case law to support that point as well.

I can't see business being happy about that fact so should support our assertions that we are outside SDC if we are a proper contractor not a hidden permi.

[Zero Liability]

"The finer details of the leaked proposal with the potential to reform IR35 and the rules on personal service companies (PSCs) have been obtained by ContractorUK."

Are you able to reveal your sources?

Who needs sources? It's more fun without.

[Zero Liability]

I agree that's the intention of the change, however by using the ESI rules to determine IR35 status surly that would mean you are an employee if you are under SDC?

The client would have to admit that they have SDC over you, this would be more than enough proof to be classed as an employee. Plenty of case law to support that point as well.

I can't see business being happy about that fact so should support our assertions that we are outside SDC if we are a proper contractor not a hidden permi.

Think it'll be interesting when the first cases go to court on just that point.

[d000hg]

I actually tend to have multiple clients, maybe we should all take a RentACoder job on the side!

[GB9]

I agree that's the intention of the change, however by using the ESI rules to determine IR35 status surly that would mean you are an employee if you are under SDC?

The client would have to admit that they have SDC over you, this would be more than enough proof to be classed as an employee. Plenty of case law to support that point as well.

I can't see business being happy about that fact so should support our assertions that we are outside SDC if we are a proper contractor not a hidden permi.

You may well be correct when it gets tested although I don't think that is the government's intention as it doesn't want us as employees, just the tax.

I know current client doesn't want resource on the payroll, ftc or otherwise.