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

[BlasterBates]

Would doing work on rent-a-coder type webtulipes at the same time be seen as multiple clients?

I would contact some small charities a do some work pro bono and do some work for them at the same time (evenings and weekends where required).

I do have a feeling this rule will be similar to the one in Germany where you should not spend more than 5/6 of your time at one client. Their wording is "working mainly for one client".

If you derive a 3rd of your revenue from client 2 you should be in the clear.

[Chutley]

Might be job done for me. I've got a mate who runs a company who I do work for on an ad hoc basis. Maybe a day every two/three months but all above board and invoiced etc.

I can see a workaround for the stupid new test.... Multiple clients.

Work for a couple of mates a day a month here and there. They pay you legit on the books, you pay them back under the table in cash. So they gain a bit of tax free cash.

You pay a bit extra tax on the 'income' you never really had, but that is balanced tenfold by remaining as a bona fide contractor.

Now you can legitimately complete the test working for multiple clients.

There will be workarounds. Sometimes it just needs mates to achieve it.

P.S I'm just a filthy muppet contractor. There will be people with a much higher intellect than me devising the workarounds.

[BlueSharp]

http://www.ft.com/cms/s/0/bc052aba-8...a1dfede9b.html

Confirmed with a source as well.

[pjt]

I do have a feeling this rule will be similar to the one in Germany where you should not spend more than 5/6 of your time at one client. Their wording is "working mainly for one client".

That equates to 1 day a week if we now work 6 days. I might need to start spending a couple hours each night or a day at the weekend working on rent-a-coder jobs!

[BlasterBates]

That equates to 1 day a week if we now work 6 days. I might need to start spending a couple hours each night or a day at the weekend working on rent-a-coder jobs!

I correct, 5/6 of your income not time, but absolutely that is a good ideam. I've sometimes wondered whether it's possible to make a living at that. I know a lot of contracts are really badly paid but I think it's feasible it might lead on to something more lucrative through contacts.

[pjt]

I correct, 5/6 of your income not time

So shifting a day's rate around each week between a few contractors seems the way to go then. However they approach this one a method around will always be identified.

[MarkT]

http://www.ft.com/cms/s/0/bc052aba-8...a1dfede9b.html

Confirmed with a source as well.

Don't have a subscription - who is the source?

[BlueSharp]

Don't have a subscription - who is the source?

Who would of thought, big consultancies advising for legislation to take out the competition...

Contractors and business consultants with very regular clients

Top accountants are in agreement that the chancellor may tackle the issue of professionals — including IT contractors working for banks — paying less income tax and national insurance through hiring themselves out through personal companies.Tina Riches, of accountants Smith & Williamson, says employers who use the same contractor or consultant for more than a month, for example, should be alive to the possibility the government might order them to put these people on the payroll. Chris Morgan, of KPMG and Patricia Mock, of Deloitte, also told the FT that they believe changes could be announced on Wednesday.

Entrepreneurs

Tax professionals are speculating that Mr Osborne could squeeze a lucrative perk that currently allows entrepreneurs to pay less capital gains tax when they sell a business — a relief estimated to cost the exchequer about £3bn a year.
Official analysis showed that £1.8bn in entrepreneurs’ relief was enjoyed by roughly 3,000 individuals in 2013-2014. Richard Murphy, a taxation campaigner, told the FT this was tantamount to “giving wealth away”.

[EternalOptimist]

So shifting a day's rate around each week between a few contractors seems the way to go then. However they approach this one a method around will always be identified.

work-arounds are highly dangerous when HMRC can not only 'deem'
but deem retrospectively

[BlasterBates]

So shifting a day's rate around each week between a few contractors seems the way to go then. However they approach this one a method around will always be identified.

I think if clients are amenable and you can split your time you're a "real" contractor and bingo. I know a German translator who has multiple clients they gave him the all clear. A few weeks ago I spoke to another contractor who worked fulltime for one client was told by the agency he'd been there too long so no renewal.

It's similar in Switzerland most contractors are put through a payroll but there is the odd one who if they have a business earning from other clients can go through their own company.