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

[cojak]

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.

And my ex-contracting mate say "Thanks!". It's comforting going into a job where the seat is still warm...

[woohoo]

Always fancied living somewhere warm, perhaps its time to hang up the contracting gloves and take a perm job in the sun.

[Tasslehoff]

I just don't understand why they would curb PSC with one breath (divi tax, T&S , IR35 review) and in the next breath outlaw them completely.

It would force thousands of people in perm work massivley reducing the temp workforce, forcing companys to go throug massive body shops like Accenture and pay for overpriced crap.

Not to mention the ancillary revenue list via contractor specialized company's (agencies, accountants, mortgage brokers etc) the next cost of that is surley more than 400m?

Plus with the Divi tax 400m is no where near a valid number, it would be nearer half that?

I just don't get it, something else is going on here that we are not aware of. Gutted as I only got into contracting a couple of years ago and really enjoying it, I am paying probably double the amount oftax now as I was as a permie and my current plan is to go back to permie land.

Just seems I'll conceived, surley someone will do a cost benefit analysis and realise this is a bad idea. IPSE must weigh in here surley, what am I paying my yearly sub's for?

Looks like we all need to engage plan B and soon. Crazy...

[Milkyway]

Yup.

Indeed, but also note that so are everyone else too!

Like these Tory sh*ts keep saying - we are all in this together - yes with this new proposal, we will ALL go down together too.

Its NOT only contractors that this will destroy. It will also:

1. Hit hard on long term costs, the ClientCo
2. Accountants; in fact all these firms that call themselves "Contractor accountants" , they are all dead!
3. Agencies
4. Sites like JobServe etc, which thrive on contractor job posts (especially the fake network engineer posts sort of thing )
(since nobody will be advertising for one-month roles , thanks Gideon)
5. Specialist mortgage providers like FreelanceFinancials, contractor mortgagees etc.
6. IPSE
7. QDOS
8. HMRC & HMG themselves, since the Tax revenue itself overall be very less, given all contractors will move into permie jobs with salary that pays well well below what they used to be paid, meaning the tax and NI will also be less (remember that if the CLientCos sees a big wave of people moving into permie jobs, they will cunningly reduce the salary too )
9. Tories themselves , since come 2020 they will be OUT (certainly i will not vote for them [and neither my family and extended family and my friends and relatives], for their backstabbing)

Indeed, we are all in this together! I wonder if this is what these parasites meant all these days before this G/Election, when they kept on saying this. Hmm!

Also, while we are at it, I will remember vote to be in the EU, since that is the only option available to move out and work outside UK, in case these tory nonsense does more harm to businesses and permies market too - maybe by loosening up on immigration more, who knows!

[ShandyDrinker]

Indeed, but also note that so are everyone else too!

Like these Tory sh*ts keep saying - we are all in this together - yes with this new proposal, we will ALL go down together too.

Its NOT only contractors that this will destroy. It will also:

1. Hit hard on long term costs, the ClientCo
2. Accountants; in fact all these firms that call themselves "Contractor accountants" , they are all dead!
3. Agencies
4. Sites like JobServe etc, which thrive on contractor job posts (especially the fake network engineer posts sort of thing )
(since nobody will be advertising for one-month roles , thanks Gideon)
5. IPSE
6. QDOS
7. HMRC & HMG themselves, since the Tax revenue itself overall be very less, given all contractors will move into permie jobs with salary that pays well well below what they used to be paid, meaning the tax and NI will also be less (remember that if the CLientCos sees a big wave of people moving into permie jobs, they will cunningly reduce the salary too )
8. Tories themselves , since come 2020 they will be OUT (certainly i will not vote for them, for their backstabbing)

Indeed, we are all this in together!

I wonder if this is what these parasites meant all these days before this G/Election, when they kept on saying this. Hmm!

As you say, the collateral damage caused by these changes will be substantial. I just cannot see that the figures will add up and indeed could end up having greater costs (both economic and societal) than anticipated. Contractors going back to perm (if indeed companies want permies), a glut of people on the market thus driving salaries down. Even if contractors emigrate, companies will cry skills shortage and open the floodgates.

The only winners here will be larger IT consultancies. However, there is nothing stopping a bunch of enterprising contractors setting up their own consultancy. Anyone know any good sales people with plenty of industry contracts? The question then is (asked somewhat tongue in cheek), when do you cease being a consultancy and become an intermediary?

I can't help but think we are unfortunately participating in a race to the bottom. Thanks Gideon.

[jds 1981]

And my ex-contracting mate say "Thanks!". It's comforting going into a job where the seat is still warm...

Sure it was warm, but they don't wonder why it also feels wet?

[jds 1981]

Indeed, but also note that so are everyone else too!

Like these Tory sh*ts keep saying - we are all in this together - yes with this new proposal, we will ALL go down together too.

Its NOT only contractors that this will destroy. It will also:

1. Hit hard on long term costs, the ClientCo
2. Accountants; in fact all these firms that call themselves "Contractor accountants" , they are all dead!
3. Agencies
4. Sites like JobServe etc, which thrive on contractor job posts (especially the fake network engineer posts sort of thing )
(since nobody will be advertising for one-month roles , thanks Gideon)
5. IPSE
6. QDOS
7. HMRC & HMG themselves, since the Tax revenue itself overall be very less, given all contractors will move into permie jobs with salary that pays well well below what they used to be paid, meaning the tax and NI will also be less (remember that if the CLientCos sees a big wave of people moving into permie jobs, they will cunningly reduce the salary too )
8. Tories themselves , since come 2020 they will be OUT (certainly i will not vote for them [and neither my family and extended family and my friends and relatives], for their backstabbing)

Indeed, we are all in this together! I wonder if this is what these parasites meant all these days before this G/Election, when they kept on saying this. Hmm!

Also, while we are at it, I will remember vote to be in the EU, since that is the only option available to move out and work outside UK, in case these tory nonsense does more harm to businesses and permies market too - maybe by loosening up on immigration more, who knows!

Also accounting software companies, recruitment agencies (does this come under your 'agencies' point)? They'd have to drop headcount. Specialist mortgage brokers.
Industry is having a hard time, seems they want to kill services too....

[Darkling]

From the article:

An agency would be responsible if they provide consultants to businesses

That's the crucial part. ClientCos won't object to this as long as we end up on the agency payroll rather than their own.

[Milkyway]

As you say, the collateral damage caused by these changes will be substantial. I just cannot see that the figures will add up and indeed could end up having greater costs (both economic and societal) than anticipated. Contractors going back to perm (if indeed companies want permies), a glut of people on the market thus driving salaries down. Even if contractors emigrate, companies will cry skills shortage and open the floodgates.

The only winners here will be larger IT consultancies. However, there is nothing stopping a bunch of enterprising contractors setting up their own consultancy. Anyone know any good sales people with plenty of industry contracts? The question then is (asked somewhat tongue in cheek), when do you cease being a consultancy and become an intermediary?

I can't help but think we are unfortunately participating in a race to the bottom. Thanks Gideon.

Yep, also added some more to the list of collateral damages

The beauty is everyone of these others in the list seems to think that its only the contractors that are affected
As if this new law is to kill the tax dodging contractors!!

In fact, i just saw this advert from InTouch accounting on the forum page above, where it says "Are you prepared?" Dividend change is coming!
As if its the contractor's headache and they are there to help

I want to ask these companies, "Are you prepared too? The death bells are ringing for your business model entirely too!"

There are so many people from these firms, including QDOS, IPSE, contractor accountants, agencies, etc, and they seem to be absolutely quite
They need to realise that if their business depends on contractors model of business, they need to raise some voice too!!!
But it seems they are in complete void about the impact to them!

But i suppose, when things change, these businesses will remodel their business to suite the changed scenario - for eaxmple since this change will make more immigration into UK, these companies will remodel themselves to work favorably for immigrants and to help them and become "immigrant specialist accountants" or something

Interesting!

[oracleslave]

From the article:



That's the crucial part. ClientCos won't object to this as long as we end up on the agency payroll rather than their own.

I assume it follows that the ClientCo is responsible for those contractors who are direct for more than a month?