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

[Zero Liability]

the killer isn't the 13.8% NI or holiday pay, the clients can factor that in. Its the big liabilities of employee rights.

Yup, aside from not having to offer the same level of benefits and their associated costs, they are paying for less risk and more flexibility. In reality, things like sick or holiday pay are just amounts of your total remuneration the employer puts aside to cover these costs, it's not like they're doing you any favours. This stuff still has to be factored in to obtain your total costs as an employee.

[NotAllThere]

...
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

This is the issue. Although my reading is that PSCs are not intended to be affected by this, the agencies, relying on advice from risk averse lawyers, will just run for cover. E.g. insist on umbrella company.

Don't think this is confined to the Tories, Labour seem to have similarly sinister plans for freelancers...

This is not a party political issue. It is a treasury issue. The IR (now HMRC) have been gunning for contractors for years. They want everyone to be employed. Pre-IR35 the government told the IR to take a running jump over this, because there were politicians who actually understood how the economy worked. Then Blair's lot came in with very little experience of how to deal with the civil service and the treasury got what they wanted.

The worst case scenario is that running a PSC becomes completely pointless and everyone ends up effectively on PAYE through an agency/umbrella.

Or we have to work a lot harder at getting direct contracts, or change the agency model, so that they find the clients, but don't operate in between us. We may then lose the dividend route, but at least we'd be in control of our money and could build up warchests etc.

I'm doubtful that agencies will react intelligently to whatever finally emerges from this.

[d000hg]

The client is not going to pay more except for the fact that they have to pay a premium for specialist skills, lack of benefits, lack of employment rights and to make up for the days where an invoice is not going to be sent (training, sickness, holidays) and the level of premium (or lack of) will be dependent on supply vs demand.

Yes we've all done contracting 101. Those are the reasons you get £300-600/day instead of £30-60k a year. You're already compensated for this.

[russell]

From the document, hope that clears it up.

Interaction with the intermediaries legislation (IR35) and the Managed
Service Company Legislation

4.6 The Government does not intend that the proposed strengthened legislation
applies to personal service companies (PSCs) differently to the way it does
currently. The interaction between, and the order in which, the agency
legislation, managed service company legislation and intermediaries legislation
(IR35) apply will remain as it is currently.


Glossary
Personal Service Company
A personal service company (PSC) is a small limited company thorough which a
owner/director provides there own personal services

[d000hg]

Does the document really misspell "their"?

[Mich the Tester]

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

No russell, it isn't. You, as director of russellco Ltd, have responsibilities and liabilities. You have invested your own money and you stand to lose that money if things go pear shaped. If your administration is wrong, or you take a big bonus out of russellco while you know that the company's facing financial troubles, then in a bankruptcy court then your limited liability will mean nothing; you can lose everything but the shirt on your back. The directors of FTSE companies face no such risks; if they f**k it all up they get told to leave with a failure bonus. In fact some of them even screwed up so badly that the businesses were rescued by the government and then they were given lifelong pensions at the cost of taxpayer owned businesses.

In that sense, your company is a lot more 'real' than many FTSE companies.

[russell]

Does the document really misspell "their"?

Yeah, page 34.

https://www.gov.uk/government/upload...employment.pdf

[Mich the Tester]

Does the document really misspell "their"?

Yeah, page 34.

https://www.gov.uk/government/upload...employment.pdf

Great. Semi-literate civil servants with no business experience will be judging whether you run a business.

[DirtyDog]

Does the document really misspell "their"?

Yes. And through. And says "a owner" instead of "an owner".

Fills you with confidence.

[Mich the Tester]

Yes. And through. And says "a owner" instead of "an owner".

Fills you with confidence.

Bloody cretins.