It's the (possible) end of the world as we know it.

[russell]

Many people on here seem to think that they are "a real business" and therefore the Tories' "kind of people". It does not seem to me to be so: it looks like in the Tories' eyes we are workers and are therefore costs to business: to be minimised.

My company is as real as any FTSE limited company. I am subject to the same laws as any other Ltd company.

[d000hg]

Many people on here seem to think that they are "a real business" and therefore the Tories' "kind of people". It does not seem to me to be so: it looks like in the Tories' eyes we are workers and are therefore costs to business: to be minimised.

My company is as real as any FTSE limited company. I am subject to the same laws as any other Ltd company.

The same laws yes, but those same laws make all kinds of exemptions and special cases based on the nature of your business. You don't pay the same CT as a FTSE 100 company for instance.

[Turfer]

Look at the Legislation

Anybody that thinks this legislation doesn't apply to a PSC should think again, you need to look at the legislation, here are the tests as they would apply to the average contractor:

1) Are you personally involved in the provision of services to a client? (obviously the answer will be yes)

2) Is there a contract between an agency and the client? (obviously the answer will be yes)

3) Do you receive remuneration in consequence of providing those services that does not constitute employment income? (I can see an argument that a dividend is received as consequence of being a shareholder in a company, but will the courts accept that argument?)

Assuming they believe a dividend arises as a consequence of providing the services you are now within the scope of the legislation, unless you are

"not subject to supervision, direction or control by any person"

Under this legislation rights of substitution will not be a material consideration. There is nothing in the legislation that says this only applies to people who are self-employed. They have stripped the parts of the old legislation that helped keep a PSC out of its scope. Most of the IR35 friendly contract clauses are no longer of any use at all.

For an idea who will be outside the scope of this legislation (in HMRC's view) take a look at Annex B Example 2 of the consultation.

The big question is how agencies will respond because they are the ones that run the risk of a tax charge. The old version of this legislation is why agencies wouldn't work directly with the self-employed and the PSC became the norm. Remember that if the agencies were confident there was no supervision direction or control then they would be happy to work with someone that was self-employed and I have yet to find hear of any agency that will.

Yet again the consultation document is big on talk about employment rights, but it doesn't change the fact that supervision, direction and control will be sufficient for the tax charge, but not the employment rights.

I see a future in which agencies write in during the consultation to complain that they are on the hook for income tax/NICs. In that future the government won't back down and the risk averse agencies won't want to work with a PSC because of the tax/NICs risk for them. However I foresee the agency continuing to issue contracts that don't result in employment under case law leaving individuals with all the income tax/NICs to pay, but none of the benefits of employment protection.

[AtW]

My company is as real as any FTSE limited company. I am subject to the same laws as any other Ltd company.

Are there many Limited companies on FTSE?

[AtW]

Soon CVs will start including - "This is strictly NOT personal service!"

[Alias]

Substitution will become norm from day 1 of contracts to prevent the personal supply and it'll be direction and control of the Ltd Co not client/agency

[Turfer]

Substitution will become norm from day 1 of contracts to prevent the personal supply and it'll be direction and control of the Ltd Co not client/agency

You need to read the new legislation, substitution doesn't help. If you are personally involved in the provision of the services you are caught, even if you can substitute and do so. The only thing that can get you out is no direction, control or supervision of the "worker" (ie you as an individual).

[northernladyuk]

You need to read the new legislation, substitution doesn't help. If you are personally involved in the provision of the services you are caught, even if you can substitute and do so. The only thing that can get you out is no direction, control or supervision of the "worker" (ie you as an individual).

How are painters and decorators going to manage? Do they become employees. Haven't read it all so I'm sure there's a difference somewhere.

[eek]

You need to read the new legislation, substitution doesn't help. If you are personally involved in the provision of the services you are caught, even if you can substitute and do so. The only thing that can get you out is no direction, control or supervision of the "worker" (ie you as an individual).

+1 but It's better to read the tax tribunal which is the cause of this mess. There it was the easy substitution of non specialised workers that is the cause of the mess

[d000hg]

How are painters and decorators going to manage? Do they become employees. Haven't read it all so I'm sure there's a difference somewhere.

Well they're doing piecewise work not contracted for a certain timescale so the fundamental way they operate is different for a start.

But for them, would this be a big deal or not anyway?