Results of the public sector consultation is up

[m0n1k3r]

Apologies if you are still missing the point.

My lad works for EY. He sits next to you.

If your/his client can the project and EY sack him as a result. He has rights.

However what you can't seem to accept is he gets rights from his employer not his client

Are you following me?

When you are a 2017 contractor and you get canned. You have exactly the rights you crave. You can have sick pay, maternity pay, redundancy. Whatever you like. But it's your company that pays. Not the client. They are not employing you. Just because you keep saying it seems like employment doesn't actually make it so.

HMRC have not said you will be an employee. Everybody here is implying this but I've not heard it yet. What they've said is you'll pay tax rather like an employee (although not identically).

You may well say that is a bit harsh but you're not losing benefits. It's no different to what's happened all these years up to now. What's changing is those benefits are going to be taxed.

It is all well so far, but let's say your PSC charges the client £100k, and pay you £50k in gross salary. Surely there ought to be a mechanism whereby the company can reclaim the over-deducted taxes, as the company supposedly need that money for operational costs such as accounting, legal, equipment, insurance and other expenses as well as employer's pensions contributions?

Without such a mechanism the company will not have the money to fulfil its employer obligations. It is as if the HMRC intentionally is forcing PSC's to break the law.

[mudskipper]

IPSE appears to have a conflict/confluence of interest - selling insurance against something that they're campaigning to abandon. If it's abandoned, then they have no product to sell.....

IPSE are a not-for-profit members organisation. Their raison d'etre is to lobby and campaign for the interests of their members and provide protection to enable those members to go about their business. The remit extends far beyond IR35, and, if all you're interested in is tax investigation insurance, there are cheaper ways to get that protection. Which would suggest that IR35 insurance isn't the only reason that IPSE's members stick around.

[m0n1k3r]

I think you have to look at this from the other side.

1) HMG see people abusing limited companies to earn more than they would do if working under PAYE and so that needs to be resolved and this solves that problem.

There's nothing wrong with the ambition, but they go about it in the wrong way. They could instead, for example, require the company to pay shareholders who are also working in the company (and the government nowadays also define directors as employees) to take a salary of a certain size (say, 1.5x average national income) before they can draw any dividends, or else those dividends drawn on a low salary will be taxed under PAYE. This would be consistent with how many other countries have approached the same problem and also avoids many deliberations about inside/outside IR35.

[eek]

There's nothing wrong with the ambition, but they go about it in the wrong way. They could instead, for example, require the company to pay shareholders who are also working in the company (and the government nowadays also define directors as employees) to take a salary of a certain size (say, 1.5x average national income) before they can draw any dividends, or else those dividends drawn on a low salary will be taxed under PAYE. This would be consistent with how many other countries have approached the same problem and also avoids many deliberations about inside/outside IR35.

Been there, suggested that doesn't solve the Monday to Friday abuse they are trying to fix

[m0n1k3r]

Construction workers buy tools and safety kit.

I buy computers, software, training etc. Clients increasingly expect me to bring my own, and that is also my preference.

[malvolio]

Been there, suggested that doesn't solve the Monday to Friday abuse they are trying to fix

Friday to Monday.

But the fix is simple. If your current client is the same organisation as your immediately previous employer and you and your "client" can't prove conclusively that you are doing a fundamentally different job - which is possible only if you aren't in it for the tax savings on both sides - then you are taxed on your gross earnings.

You want to be a freelance, go out and find a client. Sitting at the same desk isn't it.

[LondonManc]

Been there, suggested that doesn't solve the Monday to Friday abuse they are trying to fix

This does:

Friday to Monday.

But the fix is simple. If your current client is the same organisation as your immediately previous employer and you and your "client" can't prove conclusively that you are doing a fundamentally different job - which is possible only if you aren't in it for the tax savings on both sides - then you are taxed on your gross earnings.

You want to be a freelance, go out and find a client. Sitting at the same desk isn't it.

Correct and, as you say, an easy fix. Thrown in some commonly agreed fix for paying a more appropriate level of PAYE on actual days worked and there's room for profit after taking costs into account still.

[SueEllen]

Just because a company is abusing the rules doesn't justify others doing it.

Actually more and more companies are basing employees at home.

The reason for this is cost cutting. It is cheaper to have home based employees than pay for office space.

[sal]

IPSE are a not-for-profit members organisation. Their raison d'etre is to lobby and campaign for the interests of their members and provide protection to enable those members to go about their business. The remit extends far beyond IR35, and, if all you're interested in is tax investigation insurance, there are cheaper ways to get that protection. Which would suggest that IR35 insurance isn't the only reason that IPSE's members stick around.

I know quite a few people that would agree to disagree with you on this.

[perplexed]

I buy computers, software, training etc. Clients increasingly expect me to bring my own, and that is also my preference.

Many buy computers, software and training. Using my own computer is also my preference but I recognise that turning up with a computer doesn't mean the client will necessarily allow a device outside their direct ownership and control from being plugged into their network; for example, where clients use encrypted hard drives.