The Official 2018 Budget DOOM thread

[TheCyclingProgrammer]

Not quite as doomed as some were expecting, unless you really are pretending to be outside IR35 and winging it right now.

On a positive note, personal allowance and higher rate threshold increase from April to £12.5k and £50k respectively. By my calculations based on this years optimal salary/dividend combo (£8.4k salary), this brings total take home from dividends up to the higher rate threshold of £47,338 although the actual optimal salary/dividend combo might be slightly different. This would require a post-tax profit of £51,358.

[jamesbrown]

On a positive note, personal allowance and higher rate threshold increase from April to £12.5k and £50k respectively. By my calculations based on this years optimal salary/dividend combo (£8.4k salary), this brings total take home from dividends up to the higher rate threshold of £47,338 although the actual optimal salary/dividend combo might be slightly different. This would require a post-tax profit of £51,358.

Alternatively, dividends will increase and, therefore, more tax will be paid*. Every silver lining has a cloud and all that.

* I suppose you could say that the money is taxable eventually, and it beats ER, slightly.

[zoomfwd]

No retrospective investigations ...

and do we believe they will honor this ...


Responding to the consultation
9. Since the introduction of the public sector reform, and during the consultation, the
government has listened to the views of stakeholders. On that basis, it can confirm:
• the reform is not retrospective – as it has in the public sector HMRC will focus its efforts on
ensuring businesses comply with the reform rather than focusing on historic cases
• HMRC will not carry out targeted campaigns into previous years when individuals start paying
employment taxes under IR35 for the first time following the reform and businesses’ decisions
about whether their workers are within the rules will not automatically trigger an enquiry into
earlier years

[Guvernator]

Not quite as doomed as some were expecting, unless you really are pretending to be outside IR35 and winging it right now.

Seeing as this is probably about 95% of contractors, I'd say a lot of people are rightly worried. That's OK though, those contractors who aren't under any form of SDC and can dictate exact terms to clients on how and when they work will be fine.

PS I've never met a contractor who is legitimately able to do this.

[mudskipper]

HMT briefing here

https://assets.publishing.service.go...4/IR35_web.pdf

Interesting statement -

"HMRC will not carry out targeted campaigns into previous years when individuals start paying
employment taxes under IR35 for the first time following the reform and businesses’ decisions
about whether their workers are within the rules will not automatically trigger an enquiry into
earlier years"

[Guvernator]

Any mention of whether they will tackle the passing on of employers NI to the contractor. Technically you aren't supposed to pay this if you are under IR35 but we all know the clients\agencies\umbrella will try to palm this off.

[TheCyclingProgrammer]

Alternatively, dividends will increase and, therefore, more tax will be paid*. Every silver lining has a cloud and all that.

* I suppose you could say that the money is taxable eventually, and it beats ER, slightly.

Yes sure, more take-home equals more tax but the increase in take-home without having to pay higher rate tax is still a winner to me. It's more money in my pocket that I can actually use at the end of the day.

[TheCyclingProgrammer]

Seeing as this is probably about 95% of contractors, I'd say a lot of people are rightly worried. That's OK though, those contractors who aren't under any form of SDC and can dictate exact terms to clients on how and when they work will be fine.

PS I've never met a contractor who is legitimately able to do this.

Just because you haven't met them doesn't mean they don't exist. We aren't all bum on seats contractors. I'm not convinced that the private sector will lean towards a blanket "everybody is inside" approach (and likely end up paying higher rates as a consequence) when with a bit of a shift in contractual terms and working practices those who are borderline can be brought outside IR35 with not much effort. If a client truly wants a pretend employee rather than a skilled supplier, they will need to be clear about it up front.

[jamesbrown]

Yes sure, more take-home equals more tax but the increase in take-home without having to pay higher rate tax is still a winner to me. It's more money in my pocket that I can actually use at the end of the day.

Yup, I agree, just being a moaning Minnie.

[jamesbrown]

HMT briefing here

https://assets.publishing.service.go...4/IR35_web.pdf

Interesting statement -

"HMRC will not carry out targeted campaigns into previous years when individuals start paying
employment taxes under IR35 for the first time following the reform and businesses’ decisions
about whether their workers are within the rules will not automatically trigger an enquiry into
earlier years"

"Promise. Look, no fingers crossed."