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Paxman tax to be killed in Budget

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    Paxman tax to be killed in Budget

    George Osborne to kill off 'Paxman' tax ploy that costs £400m | Daily Mail Online

    Will this affect contractors?

    #2
    Originally posted by Tasslehoff View Post
    Well it's the second time that story has appeared in the mail in 2 days so something is going to be announced.

    Ironically they are still using the £3500 figure which was the figure used before the dividend tax came into place.

    But the truth is that until we see the proposal on paper (and that may be a week or two after the budget, not on budget day itself) we won't know.

    However, personally, it looks like a step in the right direction. Many will no doubt disagree with me and the devil is in the detail but companies should not be able to declare people off payroll as easily as they do currently.
    merely at clientco for the entertainment

    Comment


      #3
      Public sector contractors - of course - that who it's supposed to target.

      What's not clear is whether the plan is designed to affect all 'employers' of contractors, or whether it is really a Treasury edict to all public sector organisations not to employ contractors unless paid PAYE, which doesn't need a change in employment law - you just tell public sector shops what to do.

      But then, didn't they introduce an instruction to all departments to do that anyway a few years ago. Looks like most departments either ignored George, or implemented things half-heartedly which just allowed a load of workarounds.

      So what's he gonna do this time to make it work as effectively as he intended last time around?

      The only way to deal with this - is to have a blanket ban on anyone working through a LtdCo for the public sector while being a director or substantial shareholder, they must be paid PAYE. No exceptions whatsoever - instant firing and loss of pension for any hiring manager that breaks the rules. There will be some short term pain, but the public sector will adjust.

      Fortunately politicians are institutionally incompetent, so he won't do that. He'll 'tighten' the rules and probably introduce a new questionnaire, which will have some impact, but places will find more workarounds etc.

      Then 2 years from now, there will be another crackdown etc.

      Comment


        #4
        Many of the major government projects going on right now are being delivered by contractors. Without them these projects would just stall. I think the treasury will be aware of this.

        This is just fishing for headlines.
        Cats are evil.

        Comment


          #5
          Originally posted by swamp View Post
          Many of the major government projects going on right now are being delivered by contractors. Without them these projects would just stall. I think the treasury will be aware of this.

          This is just fishing for headlines.
          No you are putting 2 and 2 together and coming up with 5.

          No one high up knows or cares how projects get delivered. They have been told of a problem and senior management in policy have given them the solution and it's been signed it off. The fact it's utterly shafted senior management in delivery Is in many ways a bonus for them rather than a problem
          merely at clientco for the entertainment

          Comment


            #6
            Originally posted by swamp View Post
            Many of the major government projects going on right now are being delivered by contractors. Without them these projects would just stall. I think the treasury will be aware of this.

            This is just fishing for headlines.
            Originally posted by eek View Post
            No you are putting 2 and 2 together and coming up with 5.

            No one high up knows or cares how projects get delivered. They have been told of a problem and senior management in policy have given them the solution and it's been signed it off. The fact it's utterly shafted senior management in delivery Is in many ways a bonus for them rather than a problem
            I think you're both right in a way.

            Although the vast majority of my work has been in the financial services sector over the last few years, I would be hard pushed to consider a public sector contract now unless the rate was pushed up to cover the additional tax which is unlikely to happen.

            The irony of the headline grabbing is that while the Chancellor may get his larger tax take, a lot of contractors will probably avoid the public sector unless they can get the higher rates to cover the lost tax. The end result is that costs will rise for the public sector anyway so my gut feeling is that this is a zero-sum game.

            Comment


              #7
              Originally posted by ShandyDrinker View Post
              I think you're both right in a way.

              Although the vast majority of my work has been in the financial services sector over the last few years, I would be hard pushed to consider a public sector contract now unless the rate was pushed up to cover the additional tax which is unlikely to happen.

              The irony of the headline grabbing is that while the Chancellor may get his larger tax take, a lot of contractors will probably avoid the public sector unless they can get the higher rates to cover the lost tax. The end result is that costs will rise for the public sector anyway so my gut feeling is that this is a zero-sum game.
              Costs have already risen for government sector dwp/ HMRC projects as there are limited contractors who will work in those tuliphole offices.

              The last dwp development contract I saw was £500 a day (cheap for dwp who usually pay £750 or so to hpe, Ibm or Accenture but a lot more than the £400 contractors used to get for the same contract via hpe...)
              merely at clientco for the entertainment

              Comment


                #8
                Under Mr Osborne’s plans, the onus will be on employers to determine whether their staff are full-time employees – rather than the temporary workers who were meant to be the beneficiary of the rule – and should therefore be put on the payroll.
                If it goes through it will depend on clients to determine your IR35 status. It may be just restricted to the public sector. It looks to me like they'll add a time limit after which you have to go on the payroll.
                Last edited by BlasterBates; 13 March 2016, 10:57.
                I'm alright Jack

                Comment


                  #9
                  Originally posted by swamp View Post
                  Many of the major government projects going on right now are being delivered by contractors. Without them these projects would just stall. I think the treasury will be aware of this.

                  This is just fishing for headlines.
                  ^ This

                  Originally posted by eek View Post
                  No you are putting 2 and 2 together and coming up with 5.

                  No one high up knows or cares how projects get delivered. They have been told of a problem and senior management in policy have given them the solution and it's been signed it off. The fact it's utterly shafted senior management in delivery Is in many ways a bonus for them rather than a problem
                  ^ Not this

                  Originally posted by BlasterBates View Post
                  If it goes through it will depend on clients to determine your IR35 status. It may be just restricted to the public sector. It looks to me like they'll add a time limit after which you have to go on the payroll.
                  Government departments already now how to differentiate between a IR35 caught and non IR35 caught resource and all of the contracts I have had working directly with the departments in question have been carefully defined by _them_ to make sure that there was no way of anyone being unaware of their tax liability.

                  Working on a specific single project with defined deliverables
                  Working on a professional day rate where its down to the supplier to fix problems at their cost
                  Right to substitute
                  Demands that you supply your own equipment...

                  I have even seen offers of huge fixed sum payments with milestones at monthly intervals... No mention of time or day rates

                  The government departments are not going to be the ones that get screwed over by a policy that is there to catch five people in several thousand. The departments jumped to the treasuries tune the last time and after it knackered them because the clever resources wandered off elsewhere, they quickly made sure that they caught on and learned.

                  Comment


                    #10
                    Originally posted by BlasterBates View Post
                    If it goes through it will depend on clients to determine your IR35 status. It may be just restricted to the public sector. It looks to me like they'll add a time limit after which you have to go on the payroll.
                    They did that last time (or was it the time before) and it didn't work.

                    Like with private companies if a project needs doing now and they can't get a permanent hire then they hire a contractor for that specific project.
                    "You’re just a bad memory who doesn’t know when to go away" JR

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