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

[Milkyway]

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.

But remember, this will not mean that the clientcos will go to agencies to get their workforce, since these nuts want flexible workforce and agencies can't offer them with this new forced payroll model.

The clientCo nuts will simply go to offshore cos like Accenture and get it from them.
The traditional Agencies can't beat the Accenture, TCS, Infosys like parasites.

Also, can you imagine the low levels of salary that will be in place, when a couple of million contractors move into permiedom!
This change will mean drastic shortage of flexible workforce, and it can only mean offshore parasite companies to come over!

Other options for local contractors, could be for moving elsewhere into EU (if we don't leave EU in the next few years that is - if we do, we are stuck here for ever!)

[centurian]

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.

Likewise, seems bonkers. I can think of two reasons

1. Left hand doesn't know what the right hand is doing

2. A conclusion that all the different piecemeal things (T&S, IR35, divi tax) - will just add more fudges onto a sticking plaster - and they need to wield out the sledgehammer and simply smash 90% of PSCs completely.

[centurian]

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:

You may well be correct, but hardly a cause for celebration. Knowing the pimp has been laid off won't make me feel much better if facing long-term bench duty.

And I think HMRC are fully aware of the knock-on consequences. An entire industry has grown up around IR35 - and HMRC want it all killed off.

[ShandyDrinker]

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!!

...

Interesting!

You may well be correct, but hardly a cause for celebration. Knowing the pimp has been laid off won't make me feel much better if facing long-term bench duty.

And I think HMRC are fully aware of the knock-on consequences. An entire industry has grown up around IR35 - and HMRC want it all killed off.

I agree with Centurian.

Milkyway - you make some good and interesting points. However, given the fact that Gideon et al are going about the systematic dismantling of contracting and supporting industries with gusto, your smiley faced celebrations may be somewhat premature. Although by your own admission you are not being hit yet, don't bank on the fact that some other nuance which comes to light in the coming months won't also hit you and your business.

[Darkling]

But remember, this will not mean that the clientcos will go to agencies to get their workforce, since these nuts want flexible workforce and agencies can't offer them with this new forced payroll model.

I don't think that's strictly true; if this goes through, I suspect we will be employed by the agencies on non-exclusive zero hour contracts.

From the client's perspective, this makes almost no difference to them at all. The agencies will be forced to operate on a similar model to the one umbrella companies use now.

[cojak]

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

He says it's not only dry, but safe as well.

He reckons he'll wait it out for 2 years and come back when all this blows over.

[Milkyway]

I agree with Centurian.

Milkyway - you make some good and interesting points. However, given the fact that Gideon et al are going about the systematic dismantling of contracting and supporting industries with gusto, your smiley faced celebrations may be somewhat premature. Although by your own admission you are not being hit yet, don't bank on the fact that some other nuance which comes to light in the coming months won't also hit you and your business.

Guys, I am very sorry about that smiley. I should probably have made it clear what i meant there.

Those smileys are smiling i agree, but i made them that entirely in the sense of "annoyed and amused".
I am annoyed that no one from other industries that are being damaged are voicing anything on this, excepting contractors - which includes me!
I smiled in that sense, not at the fate of what is about to happen with this new law change.

It sounds as though this law change is to break down the tax dodging contractors, and has no other intentions aside that. This is just not the case.
And given that others like the IPSE, agencies, QDOS members, etc not voicing on this, makes the feeling that its just the contractor's tax problem!
Hence i felt annoyed and amused, since that is not the real picture.
Sorry - i should have been clear about that!
I am one among the damaged too, and I am clearly not celebrating at all.

[SunnyInHades]

I suspect that umbrella companies would be happy with this possible 'crackdown' - contractors (i.e. 'employees') working through them will be exempt, business as usual.

[centurian]

I suspect that umbrella companies would be happy with this possible 'crackdown' - contractors (i.e. 'employees') working through them will be exempt, business as usual.

Probably - and for those contractors that work through umbrellas (yes, there are quite a few of them), it's easy to think - great, I'm not affected.

But that's only if clients continue to engage a contractor through an umbrella.

At the moment, once the money goes out of the door, clients don't really care what route it takes to get to the contractor.

But under the proposals, clients will be responsible for anything out of place, which means they will need to expend a lot of effort in vetting umbrellas to make sure they really are a valid PAYE umbrella - a lot of offshore schemes describe themselves as "umbrellas" nowadays.

How many will bother with contractors - depends on the detail of the proposals

[EternalOptimist]

Just occurred to me that there is a whole other tranche of people who will be worked over by this
If I get forced to go permie, at my current gig, there is at least one guy who will not required any longer and possibly two