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

[IR35 Avoider]

So it's not necessarily one-month-then-caught, instead it's one-month-then assessed-by-someone-who's-got-nothing-to-gain-by-giving-a-pass. Which probably amounts to the same thing.

Or maybe the contract of the future will be along the lines of "rate is X if you assess me as not caught, but (80%/60%) of X if you assess me as caught."

This could still be the end of the PSC though, as the transfer of liability may mean large-cos in the payment chain will not pass on the money to small-cos they don't trust to indemnify them.

[ZARDOZ]

What doesnt make sense is... If this 1 month rule comes into place and is hard to pass then why did they a/ bother with the T&S Changes b/bother with the dividend taxes.

Sounds like they wanted to go medium hard at the start then decided fook it lets really screw them. Someone has lobbied for this no doubt.

[LucidDementia]

Newbie here... (so please be nice)

Guys ...please relax ...there is no need to panic.
After all we are a part of a billion$ industry with vested interested not just to the treasury.

Are you suggesting we should not run around like headless chickens in a flat panic?

Preposterous

[diseasex]

I will simply , if caught, walk from a contract to another. Providing I will know that after the test, and not after a year
That will probably shrink contracting market to only those that are not IR35 caught.

[LucidDementia]

So it's not necessarily one-month-then-caught, instead it's one-month-then assessed-by-someone-who's-got-nothing-to-gain-by-giving-a-pass. Which probably amounts to the same thing.

Or maybe the contract of the future will be along the lines of "rate is X if you assess me as not caught, but (80%/60%) of X if you assess me as caught."

This could still be the end of the PSC though, as the transfer of liability may mean large-cos in the payment chain will not pass on the money to small-cos they don't trust to indemnify them.

Or we'll all increase our rates to compensate.
Just a thought.

[ChimpMaster]

I will simply , if cought, walk from a contract to another. Providing I will know that after the test, and not after a year
That will probably shrink contracting market to only those that are not IR35 cought.

Or perhaps to those who can spell.

But seriously, clients will not pay contractors a higher rate and they won't care what your personal tax situation is. And the likelihood is that cheaper contractors/consultants/offshore teams will pick up the slack.

So, PSCs demolished and Entrepreneur's relief removed, leaves little option for the UK's flexible workforce, crushing the current livelihoods and future plans of hundreds of thousands of (ex-)Tory voters.

[diseasex]

Or perhaps to those who can spell.

But seriously, clients will not contractors a higher rate and they won't care what your personal tax situation is. And the likelihood is that cheaper contractors/consultants/offshore teams will pick up the slack.

So, PSCs demolished, Entrepreneur's relief removed, leaves little option for the UK's flexible workforce.

or perhaps to those who can spell.

But seriously, its not a disaster! Entrepreneurs relief mean that instead 10% you will pay 30%. You can live with it. Genuine contractor businesses and not hidden employees will stay as contractors. For me its a vehicle to gain funds to invest further within my limited, for others it's a vehicle to buy jag and dfs sofa. They can tax the others as they wish.

[d000hg]

or perhaps to those who can spell

You're just jealous because you're not a contractor a higher rate.

[ChimpMaster]

or perhaps to those who can spell.

But seriously, its not a disaster! Entrepreneurs relief mean that instead 10% you will pay 30%. You can live with it. Genuine contractor businesses and not hidden employees will stay as contractors. For me its a vehicle to gain funds to invest further within my limited, for others it's a vehicle to buy jag and dfs sofa. They can tax the others as they wish.

LOL corrected but too late.

30% is way too much as a final send-off from your business, and consider that you have paid numerous taxes on the way too. So let's say you have lifetime business retained profit of £200,000. You'll be paying £60k CGT instead of £20k : that's a massive hit.

You're right about one thing though - I've also thought about when I quit IT, to keep the funds in the Ltd and re-brand the company as a Property development company, or something like that, and then use the funds to grow that new business.

[jamesbrown]

What doesnt make sense is... If this 1 month rule comes into place and is hard to pass then why did they a/ bother with the T&S Changes b/bother with the dividend taxes.

Sounds like they wanted to go medium hard at the start then decided fook it lets really screw them. Someone has lobbied for this no doubt.

To a degree, yes. But they view things in terms of where can they get money, how much, and how quickly/easily. We're talking about different timetables; at least, we were at the point those were announced, and I still think we're talking about FB 2017 (April 2017) for IR35 changes. It doesn't really matter if these things overlap, especially if they bring in revenue ASAP.