Could IR35 become Boris's Poll Tax?

[LondonManc]

Bingo. The socialists haven't quite cottoned on yet. It will be Rebecca to the rescue in 2024?

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Your subtitle claims that you're potty-trained. I highly doubt it given the amount that you've shat on the keyboard recently.

[Snooky]

I just don't see who this benefits other than the big outsourcers and consultancies.

You asked and answered your question in the very same sentence

[Martin Bank Holiday]

This may have changed but the last time I dug into this, I found out that India has a special tax concession to workers in certain industries, including IT, where they pay something like 10% tax. Due to dual taxation treaties, I think they can then reclaim all income taxes paid in the UK.

ICBW though and would be interested to know.

Ok, if true, surely we can drive a coach and horses through the whole policy WRT IR35 rollout in the private sector, assuming that the chain of events is:

1) A significant proportion of private companies adopt a policy of declaring all contractors inside
2) Reduction in size of flexible workforce due to loss of claimable expenses
3) Businesses cry skills shortage
4) Loads of people from India flown in to make up shortfall

That, surely, will result in HMRC getting a lower tax take than when we were all operating outside IR35.

I just don't see who this benefits other than the big outsourcers and consultancies.

[Snooky]

Where do Indian workers on ICTs pay their taxes? Here or in India? And if here, do they get charged the full whack? Only asking because if they don't pay the same amount of tax as the rest of us then the whole model is just stupid and of no benefit to the public purse.

This may have changed but the last time I dug into this, I found out that India has a special tax concession to workers in certain industries, including IT, where they pay something like 10% tax. Due to dual taxation treaties, I think they can then reclaim all income taxes paid in the UK.

ICBW though and would be interested to know.

[Anubis]

Where do Indian workers on ICTs pay their taxes? Here or in India? And if here, do they get charged the full whack? Only asking because if they don't pay the same amount of tax as the rest of us then the whole model is just stupid and of no benefit to the public purse.

A lot of them are brought in for only a year or two then head back home to India. They usually work through an Indian firm, which I assume means their tax paid benefits India. I could be wrong.

[Martin Bank Holiday]

The flood gates from India will be opened and the market rate for all skills will be approximately £35,000.

Where do Indian workers on ICTs pay their taxes? Here or in India? And if here, do they get charged the full whack? Only asking because if they don't pay the same amount of tax as the rest of us then the whole model is just stupid and of no benefit to the public purse.

[suityou01]

The intended/unintended consequence is that umbrellas will become the norm. BigCo can get workers with no strings or benefits whom they can fire whenever they like. Everything will be outsourced including the workforce. End result - there will be less "permies" too.

Bingo. The socialists haven't quite cottoned on yet. It will be Rebecca to the rescue in 2024?

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[Lockhouse]

The intended/unintended consequence is that umbrellas will become the norm. BigCo can get workers with no strings or benefits whom they can fire whenever they like. Everything will be outsourced including the workforce. End result - there will be less "permies" too.

[suityou01]

Thanks for the feedback PSB.

I guess my post is here for posterity. Let us revisit in 12 months time.

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[Peoplesoft bloke]

This is kind of what I wanted to do some napkin war gaming about.

Some what?

Firstly there will be a sharp rise in unemployment figures, and a sharp drop in tax take. Presumably the government has forecast this. The markets may also have priced this in. Or maybe not.

Sharp rise? from a few thousand contractors?

If the pound devalues further, then the cost of living will increase putting the squeeze on those already on the breadline. Suddenly this starts driving the news cycle. The lefty Red tops will begin filling their boots. One imagines a failed election pledge from Mr Javid will be seen as something of an open goal.

Almost no-one - especially not red-top newspapers (as an aside which red-top other than the Mirror do you consider "lefty"?) will be looking at IR35 as a source of any ills.

Suddenly these permie types, and giro birds become aware something is wrong. They don't understand or care about IT contractors or HMRC. They are told its Brexit related. This is the first squeeze put on Boris's cabinet, which will be unconvincingly put forth by magic grandpa until Rebecca Wrong-Daily takes the helm.

Some highbrow analysis by the FT and the Torygraph on page 67 highlights the real issues and goes largely unnoticed by the gurning masses. The markets notice and the pound sinks lower. Rinse and repeat.

The skills drain is now successfully in effect and the freelance herd is now thinned greatly. Brexit related projects fall behind. This grabs a few headlines and the first mention of IR35 goes mainstream. Some big consultancies put some talking heads on channel 4 news to opine. Public awareness grows.

IR35 will never go mainstream. HTH.

Meanwhile India is supplying record numbers of consultants, and the drop in tax take in PAYE, VAT, Corporation tax and dividend tax is being accutely[sic] felt by HM Treasury. The first post Brexit budget indicates more borrowing, which is explained as predictable short term pain from Brexit.


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