Finance Bill 2019-20 draft legislation

[WordIsBond]

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.

That wasn't a very compelling argument on an emotional 'fairness' level, even before, when the tax side of the equation had nothing to do with HugeCo. Taylor has already challenged this disconnect. It's even less satisfactory when it is HugeCo that is now making the call on the tax question.

This is eventually going to change. It may not be IT contractors that are the trigger, it may be nurses or someone else on relatively low pay. But clients are not going to be able to get away with failing to give employment rights whilst still saying that someone should be taxed like an employee. Eventually someone in the press will take that one up. It is, shall we say, 'Taylor-made' for a fairness campaign in the press against evil HugeCo or evil NHS trust ripping people off by telling them they have to pay employment tax but not letting them have holidays.

[mudskipper]

Decent article in yesterday's Sunday Telegraph

Tax laws a 'grenade about to go off' under the self-employed

[simes]

Hoping not a stupid question:

If a contract is deemed Inside, and a contractor accepts and starts as such, does this then mitigate any chance down the road to question and take to tribunal?

As well as the blanket approach, I would not be at all surprised to see the need to sign on to such things at contract time..??

[northernladuk]

Hoping not a stupid question:

If a contract is deemed Inside, and a contractor accepts and starts as such, does this then mitigate any chance down the road to question and take to tribunal?

Eh? What makes you think that?

As well as the blanket approach, I would not be at all surprised to see the need to sign on to such things at contract time..??

No chance. Doesn't happen in the public sector so very little chance in the private and I can't see how it will stand up either.

[jamesbrown]

If a contract is deemed Inside, and a contractor accepts and starts as such, does this then mitigate any chance down the road to question and take to tribunal?

If your question is this: if a contractor is paying the maximum amount of tax possible, is that contractor safe from investigation in relation to their tax affairs?

Then the answer is: yes. If your contract is declared inside IR35, you will not be subject to an investigation that seeks to show that your contract is inside IR35.

If your question is this: If a contractor begins a contract outside IR35 and, after April 2020, that contract moves to being inside, is that contractor safe?

Then the answer is: yes, in relation to their affairs after April 2020 and emphatically no in relation to their affairs beforehand, i.e. they are placing a massive target on their back.

[webberg]

But clients are not going to be able to get away with failing to give employment rights whilst still saying that someone should be taxed like an employee.

I think the problem is that Client Co is is saying that there are no employment rights, because - absent the tax laws imposed upon by HMRC - there is no employment. There is a contract/payment relationship.

Also Client Co is not saying someone should be taxed like an employee - that is HMRC saying so.

It would be wholly wrong for HMRC to force a Client Co to treat people like employees when that decision lies outside their remit.

I see the correlation and completely understand the fairness point and the apparent conflict in the situation but I guarantee that the Government will stick with the distinction for tax and employment purposes. The Big Co lobby is powerful and they do not want employees and will care about this reform ONLY if they find themselves responsible for the tax, which the current rules place elsewhere.

[SussexSeagull]

I get the whole tax and employment status laws should be aligned argument on a moral and to some extent logical level but no one has ever pointed out it's basis in law.

At the moment similar happens to self employed delivery drivers, etc. who work shifts when they are told and nothing seems to be happening over that at the moment.

[BlueSharp]

Thinking out aloud a little here. If a contractor is deemed inside but the contractor can prove they are outside; say a lack of MOO (they were binned when the project was cancelled/completed). What's to stop the contractor getting an 'IR35 Expert' in for a fixed percentage to win an appeal for them? - Either via client appeals process or via the courts (I'm not sure what courts would deal with this). I'm not suggesting that employment rights, holiday pay etc should be claimed but challenging the over taxation decision.

[simes]

If your question is this: if a contractor is paying the maximum amount of tax possible, is that contractor safe from investigation in relation to their tax affairs?

Then the answer is: yes. If your contract is declared inside IR35, you will not be subject to an investigation that seeks to show that your contract is inside IR35.

If your question is this: If a contractor begins a contract outside IR35 and, after April 2020, that contract moves to being inside, is that contractor safe?

Then the answer is: yes, in relation to their affairs after April 2020 and emphatically no in relation to their affairs beforehand, i.e. they are placing a massive target on their back.

Oh Lord, wasn't either. But, good effort.

No, I was asking, if in 2020, after April, one signs a contract which is deemed Inside IR35 and starts that contract on the given date, can one, a few months down the line, launch an investigation to turn that decision around to make it Outside IR35 and to claw back the tax?

Does starting an Inside IR35 contract prevent any possibility to later claw back tax if in fact, it turns out the working conditions are exactly those pertaining to being Outside?

[northernladuk]

Oh Lord, wasn't either. But, good effort.

No, I was asking, if in 2020, after April, one signs a contract which is deemed Inside IR35 and starts that contract on the given date, can one, a few months down the line, launch an investigation to turn that decision around to make it Outside IR35 and to claw back the tax?

Does starting an Inside IR35 contract prevent any possibility to later claw back tax if in fact, it turns out the working conditions are exactly those pertaining to being Outside?

No it doesn't but you've a major hurdle to overcome. The dispute process is client led. You'll be disputing the situation with the people that made the determination so good luck with that.

Off-Payroll draft legislation published: Government dismisses consultation concerns

Won't be hard for them to turn round and say no, we want you to do what your are told and you can't sun and your case falls apart.

Another aspect is flip flopping status while in the same gig. General advice appears to be staying in a gig that changes status is not a good idea so I can't imagine it's going to be a great place to be in later on down the line either.