Truss IR35 review

[jamesbrown]

Question is what revenue would they have lost without it. Everyone in the world would be via LTD and employment wouldn't exist. There has to be a legislation of some form to define the boundaries and taxation of different types of work. They just haven't done a very good job of IR35.

Right, which is why it can always get worse too.

In some ways, strict deeming would be much better but, of course, depending on what they deemed inside or outside would partition people into being supportive vs. resistant. No contracts longer than 3 months? Fine, say say all the temps. No work for single clients at a time? Fine say all the permietractors with minor stuff on the side.

There will be unfairness in everything, other than repeal of ITEPA 2 8/10, which they obviously won't do, or replacement of the dividend regime with self-employment (aka look through). If you look elsewhere in the world where they have strict deeming, the mixture of criteria tends to classify the vast majority of what we might otherwise call self-employed/freelancers "caught". The main problem is that, in the UK, there is a stark difference between employment and self-employment due to ErNi on one side and tax deductible expenses on the other.

[ladymuck]

How do other countries with stricter deeming handle the employee rights and benefits side of things? Or are they just considered proper employees rather than our rather unsavoury "self-employed for rights, employed for tax" which gives clients/employers two get of jail cheaper cards?

[jamesbrown]

How do other countries with stricter deeming handle the employee rights and benefits side of things? Or are they just considered proper employees rather than our rather unsavoury "self-employed for rights, employed for tax" which gives clients/employers two get of jail cheaper cards?

As you'd expect, it varies, although there's a distinction between tax and employment rights in quite a few jurisdictions. They have strict deeming in Oz, for example, but it's purely about tax status AFAIK:

https://www.ato.gov.au/Business/Pers...rvices-income/

Another example is California, where they also have strict deeming and I think the distinction is about employment, not just tax, but then rights are generally lower in the US:

https://www.labor.ca.gov/employmentstatus/abctest/

Germany is another good example where they have the Freiberufler (freelancer) or Gewerbetreibender(self-employed) status - others can speak to the details of those, but I believe they are strictly deemed based on profession and other things, certainly not like IR35, which relies on the ever-changing emphasis of case law.

Again, though, the problem in the UK is mainly the stark difference between employment and self-employment w/r to tax and expenses, which is then amplified by our common law system in creating confusion.

[darmstadt]

Germany is another good example where they have the Freiberufler (freelancer) or Gewerbetreibender(self-employed) status - others can speak to the details of those, but I believe they are strictly deemed based on profession and other things, certainly not like IR35, which relies on the ever-changing emphasis of case law.

Again, though, the problem in the UK is mainly the stark difference between employment and self-employment w/r to tax and expenses, which is then amplified by our common law system in creating confusion.

Germany now has this bollocks:

https://www.bmas.de/DE/Service/Geset...ngsgesetz.html

http://www.gesetze-im-internet.de/englisch_a_g/

Similar to IR35 in some areas. All came about because companies, like Mercedes, were employing people on the production line but as self-employed whereas in reality, they were just disguised employees. I refuse to take any contract, won't even talk to the agency if the acronym ANÜ is mentioned. I was on a contract when it came in and it was the most painful thing ever, for not only the contractors (we all got 'sacked' and then 're-employed' to deal with it) but also the agencies and the end customer. IT contractors here hate it and do their best to get around it, mainly by having more than one contract.