Finance Bill 2019-20 draft legislation

[northernladuk]

Would that even be allowed? Would not the deeming of being Inside automatically mean you Have to be paid via umbrella? ...Probably via some subsidiary of the agency that found the contract for you?

Otherwise, what would be stopping the LtdCo saying Feck it, I will deem my own culpability and status?

Welcome back simes. Glad to see nothing has changed

[jamesbrown]

Would that even be allowed? Would not the deeming of being Inside automatically mean you Have to be paid via umbrella? ...Probably via some subsidiary of the agency that found the contract for you?

Otherwise, what would be stopping the LtdCo saying Feck it, I will deem my own culpability and status?

No, perfectly allowed. It's just that YourCo will be paid with personal taxes deducted at source and you then deal with the fallout of that in your company counts (no CT etc.). There will be absolutely no sense in retaining a company if you expect most/all of your work to be inside.

[webberg]

Would that even be allowed? Would not the deeming of being Inside automatically mean you Have to be paid via umbrella? ...Probably via some subsidiary of the agency that found the contract for you?

Otherwise, what would be stopping the LtdCo saying Feck it, I will deem my own culpability and status?

Being inside IR35 does NOT require use of an umbrella.

If you are inside then the deemed "employer" - at the moment your PSC, post reform the fee payer - is required to deduct tax etc.

There is no requirement for the PSC to disappear but as the commentators are saying, it makes little sense to keep it if you are inside.

There are a large number of possibilities spinning out of that point which I'm sure will be discussed here and elsewhere.

[ComplianceLady]

Being inside IR35 does NOT require use of an umbrella.

If you are inside then the deemed "employer" - at the moment your PSC, post reform the fee payer - is required to deduct tax etc.

There is no requirement for the PSC to disappear but as the commentators are saying, it makes little sense to keep it if you are inside.

There are a large number of possibilities spinning out of that point which I'm sure will be discussed here and elsewhere.

Payment of inside via ltd co. is also not something fee-payers are keen on offering, I expect there to be significant pressure to migrate inside workers to direct PAYE or umbrella PAYE.

[Maslins]

@webberg I have zero legal experience beyond the very modest academic knowledge required for ACA/CTA. However I see it going more like the below (where C = contractor, J = judge).

C "I've been working for Hugeco for 6 months, with working practices of employee/employer, but the gits aren't giving me employment rights."

J "Presumably Hugeco disagrees and sees you as an independent service provider?"

C "Here's a handful of reports provided by and signed by Hugeco explaining why they think our working relationship is one of employee/employer." [drops mic]

J "Wowsers, yeah, you win allz the prizes."

(I imagine you're all now struggling to believe I haven't been practicing law for decades)

[jamesbrown]

(I imagine you're all now struggling to believe I haven't been practicing law for decades)

Sounds fine. All ETs are like Judge Judy, right?

[NeedTheSunshine]

Permie roles are not always on offer, you know. If the clients wanted permies they could hire permies.

You know that, and I know that. But Jo Bloggs will argue that the answer is that if nobody worked under those conditions (ie. taxed as employee, but no employee benefits) then the employer would have to take on permies. And at least you aren't on a zero hours contract etc.

The point I was trying to make is that the general perception of contractors isn't great. It would take a lot to turn that around. Didn't you know that we're all greedy, tax avoiding scum and that it's about time we paid our "fair share"?

[WordIsBond]

You know that, and I know that. But Jo Bloggs will argue that the answer is that if nobody worked under those conditions (ie. taxed as employee, but no employee benefits) then the employer would have to take on permies. And at least you aren't on a zero hours contract etc.

The point I was trying to make is that the general perception of contractors isn't great. It would take a lot to turn that around. Didn't you know that we're all greedy, tax avoiding scum and that it's about time we paid our "fair share"?

Partly true. But good old Bloggs is going to be quicker to believe that BigPLC is the bad guy than that we are. He doesn't quit HIS job because he doesn't like the way he's treated. Rather, he complains about the company he works for, and he won't be slow to help you complain about yours, either.

If contractors say, 'It isn't fair to be taxed the same as employees,' we'll get short shrift from the economically illiterate and the envy-mongers in the press. If we say, 'Fair enough, but if they are going to say I'm taxed the same, they should give me the same rights,' Mr Bloggs will duly nod his head and say, 'Yes, I see your point.'

[webberg]

@webberg I have zero legal experience beyond the very modest academic knowledge required for ACA/CTA. However I see it going more like the below (where C = contractor, J = judge).

C "I've been working for Hugeco for 6 months, with working practices of employee/employer, but the gits aren't giving me employment rights."

J "Presumably Hugeco disagrees and sees you as an independent service provider?"

C "Here's a handful of reports provided by and signed by Hugeco explaining why they think our working relationship is one of employee/employer." [drops mic]

J "Wowsers, yeah, you win allz the prizes."

(I imagine you're all now struggling to believe I haven't been practicing law for decades)

At the second C, why are there reports saying the working relationship is one of employee/employer?

Surely they are saying that the relationship FOR TAX PURPOSES is the payments made should be taxed at a rate equivalent to an employee (not an employee tax).

The WORKING relationship is one of contract and payment. It's just that the TAX relationship is defined differently.

Not a lawyer either, just a CTA - but very old so have seen a few things. Not that such knowledge is valuable now given the shift in IR35, but I suspect we're all learning and guessing.

[Qdos Contractor]

I disagree with the above.

I'm not maligning QDOS and from what I see they are a professional, careful and prudent organisation.

However, unless senior management is willing to make changes to the work required or the manner in which it is delivered or supervised - in other words make changes that are real and can be proven over the course of the contract - no amount of legal massaging can alter and inside/outside determination.

That decision is (or should be) based on FACTS and no legal contract will produce a magic wand to alter those. Rather it is the opposite. The FACTS on how a job is done should drive the contract.

If QDOS (and I'm sure there are others) can influence those FACTS - and for all I know they can and do - then great.

Agree with you 100%.

Obviously many contractors are currently operating outside IR35 (both in respect of their written contracts and their working practices), and an impartial assessment will provide their client with suitable reassurances that this is the case.

IR35 is naturally a new issue for many engagers and, in some organisations, there is the opportunity to make policy-level decisions, statements and/or changes on factors like substitution - once the organisation fully understands the practicalities etc.

We've seen this step change in many public and private sector organisations we have worked with. If there are any positives to take from the IR35 reform, it is the increased awareness and understanding of both the legislation and the importance of contractors.

Seb