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

[BrilloPad]

I am not convinced the government and their puppet masters care about money. IMO it is about control.

[EternalOptimist]

As with most changes, there will be winners and losers


winners :-
Body shops
Bobs
Central office (if the brown envelopes theory is correct)
Treasury administration(pigeon-holing everyone. fewer anomalies)
Treasury administration(forget IR35 etc. its been superceded)
SJW feeling that the right thing has been done

losers :-
Tax revenue
engagers.
contractors and families
agents
accountants


What is lacking is a cost benefit analysis. obviously, we all 'know' the answer

I just hope to high heaven that the guy who does it gets it right. If he does , I will live with it

[jamesbrown]

These high-level numbers aren't really numbers in the ordinary sense, more statements of intent or WAGs that allow politicians to thread a story with the public. We all know that the £400m collapses under scrutiny (e.g. dividend tax), but it serves its purpose as a statement of intent w/r to tax avoidance. Politics isn't about what the reasonable person might do, but about capturing and leveraging the public mood, and the public really isn't that sophisticated on these issues. By the same token, Gideon et al. will listen to big businesses, up to a point, because they can shape the public mood via our free press The timing of this is squarely aimed at the CBI conference on Monday.

[MPwannadecentincome]

In my opinion....

Someone in goverment and / or treasury wants to do a way with PSC's, they would much prefer that the "flexible" workforce is provided through the larger IT companies who will willingly ship any employee from anywhere to any client site. By making it harder for a client to hire a Ltd Co contractor, the more likely the clients will start to go to the larger companies. This model, if successful, will ruin the contract agencies, in effect the margin for our hard work will go to the directors and shareholders of these larger companies who will become even more stinking rich.

Some large Clients banning the use of UK contractors and only taking resources from the big IT or 3rd party resourcing firms - mostly offshore providers - has forced those same companies to try to approach contractors onto their own payroll to fill the gap in skills their own workforce has - I have seen this happen. Yes they know the IT company will charge UK based staff at higher rates than offshore based staff coming here on a Visa, some Projects will only succeed with some UK staff onboard. In the very short term these large companies may take contractors to fill roles at their clients, longer term they will "persuade" those resources to go permanent or to just go.

It could be these large Clients have bent the ear of the treasury to make what they think is their own good company policy more widespread in the hope of a longer term drop in costs? CEO at the top doesn't like "expensive" UK staff, they don't understand the value they bring, all they see are the numbers.... the numbers look better if they can outsource at a fixed price, so if the govt does away with PSCs their minion managers can't hire contractors anymore and will be forced to outsource because taking on permies will be banned too!

The only "flexibility" left for the likes of us who are unable to continue as PSC would be to job hop between the larger companies trying to get pay rises along the way.

[AtW]

Right, but what's £200m or so p.a. going to help?

It's ideologically motivated - essentially they don't want PSCs to exist.

A lot of people missed on pension auto enrolment thingy - it is essentially a new increase in employer NICs on one hand and taking money from employees into pension ponzi scheme on another. This tax also isn't limited by relatively small threshold, so Govt stands to make a shredload from it - they don't want anybody to hide in a corporate envelope to dodge it.

Bear in mind that there will be a new round of taxes at some point when Labour gets in - the scumbags work together on such things - both Tories and Labour passed auto enrollment because they are all on gold plated final salary pension that they want to be paid by others.

IR35 did not work because Internet allowed people to organise, pool resources together and fight it off. So now it's the revenge of the Govt.

[Zero Liability]

I don't disagree that they're probably operating on ulterior motivations. Money certainly is not what they're going to get from decimating the sector.

[NibblyPig]

I just wanna weigh in the whole 'how the public sees contractors' debate, with all our vast riches and wonderful tax evading ways...

I reckon joe public would be pretty jealous right up until the point where you told him that you could be let go at any second and be out of work for 3 months, 6 months, etc.

See how joe public would feel if he were fired the next day with no redundancy money or anything else, or that they're saving up to take everyone to disneyworld but it was cancelled because the contractor caught the flu and was off sick for 2 weeks (unpaid of course) and they had to pay the mortgage. He or she can explain that to their partner and kids....

I'd hope the reality would then kick in, if you actually put things in real terms. The good money and stuff is unlikely to be worth the instability in the eyes of the unlightened permie public.

[Tasslehoff]

So are we ****ed now or what?

[northernladuk]

So are we ****ed now or what?

Yup.

[jds 1981]

Any chance companies such as HSBC might take this as another reason to leave the UK?

I'm very annoyed, not been contracting long, left a nice cushty job for contracting. Felt that changes for things like child tax credits that I've already been affected by were fair. But if this is anything like specified will be horrendous.

As others have said, who to vote for now? Tories would be permanently off my list.