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Small Companies Exemption

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    Small Companies Exemption

    This is a total nightmare. The way these changes are being implemented will put my company out of business.

    I run a small specialist company that provides niche services to 3 or 4 banks. the company SHOULD be exempted from the IR35 legislation. I use some permanent staff but quite a few specialist contractor / freelancers which I need to fulfil the specialist service (coding etc).

    All these banks have communicated now that that anyone who does contract work for the bank services MUST be paid via an Umbrella company!!! Yet they won't pay extra for the work. I'm making barely 17% margin on the services and running at risk.

    The new changes I'm being forced into will add another 14% and also the freelancers / contractors I use will have to pay PAYE tax for outside IR35 services! I will also be forced to give them employment rights, sickness, pension etc, when they aren't employees and are used for specific pieces of work. My company will 95% likely go under now when I've spent 3 years getting it off the ground and I will have to lay off staff. Even if I don't lay off staff, my resource will leave anyway and go to rival companies.

    Innovation is being stifled. Most people work for many clients and are most certainly outside IR35, so why is my small company providing a service being treated as a medium to large company and being made to be treated as inside IR35 when the services are CLEARLY outside.

    Is what these banks are doing (HSBC, Lloyds etc) unlawful? It's certainly against the spirit of the law and against what the government have said.

    Depressing, talk about Blue Monday!


    As the government legislation, specifically states that small companies are exempt.

    #2
    Get a meeting with your MP and tell them. Ask them if they support the changes and whether they think your scenario is what they expected to happen. Demonstrate how the banks' approach is damaging and ask if they will raise a question at PMQ's about it.

    Comment


      #3
      Yeah, been there and done that with my MP, prior to Christmas I wrote about the forthcoming changes in general and got a standard response saying parliament is porogued and Mel Stride is doing a review.

      As soon as I got wind of the small companies exemption being abused I wrote last week to set up a meeting, normally my MP is ultra responsive but not heard anything back.

      I think many MPs are afraid of HMRC who see to be a law unto themselves and out of control.

      Comment


        #4
        Originally posted by JimmyB View Post
        Yeah, been there and done that with my MP, prior to Christmas I wrote about the forthcoming changes in general and got a standard response saying parliament is porogued and Mel Stride is doing a review.

        As soon as I got wind of the small companies exemption being abused I wrote last week to set up a meeting, normally my MP is ultra responsive but not heard anything back.

        I think many MPs are afraid of HMRC who see to be a law unto themselves and out of control.
        Sadly you've got a problem and it's not going to be resolved. I would guess you could find a newspaper but it's not an easy story to write especially as you have to explain the issue.

        I suspect you are sadly collatoral damage.

        As an aside it's why everything I do is Software as a Service - try arguing paying for customisations of that is inside the bank's IR35 remit.

        Finally I will add the first thing Patio11 will say in your circumstances (and in virtually all others) - Charge more. It's counter-intuitive but the more you charge a customer the less likely they are to be awkward.
        Last edited by eek; 20 January 2020, 15:40.
        merely at clientco for the entertainment

        Comment


          #5
          Sorry to hear that. You’re in a tough spot, I’m afraid, because this is a policy decision by the banks. Remember, as of now, there is no new legislation. These policy decisions are preempting legislation and, as far as I can see, there is absolutely nothing unlawful about it, certainly not in relation to any legislation that doesn’t already exist. Any company can decide to change their procurement policy at any time.

          Comment


            #6
            I hear the uK contractors within the sapient (large Indian outsourcer) scrum teams at Lloyd’s got told today they can continue as usual outside IR35 - happy days for some


            Sent from my iPhone using Contractor UK Forum

            Comment


              #7
              Originally posted by GhostofTarbera View Post
              I hear the uK contractors within the sapient (large Indian outsourcer) scrum teams at Lloyd’s got told today they can continue as usual outside IR35 - happy days for some


              Sent from my iPhone using Contractor UK Forum
              Wow, i will see if I can find that out... if true, why can they do it for some and not others, you would have thought that Scrum teams are far more likely to be inside IR35 than freelance developers!!

              Comment


                #8
                Originally posted by GhostofTarbera View Post
                I hear the uK contractors within the sapient (large Indian outsourcer) scrum teams at Lloyd’s got told today they can continue as usual outside IR35 - happy days for some


                Sent from my iPhone using Contractor UK Forum
                In other news:

                Lloyds follows HSBC in banning consultancies’ limited company contractors ahead of IR35 reform

                Comment


                  #9
                  It's starting to feel like there's some form of collusion going on, with the main banks all basically doing the same thing

                  Comment


                    #10
                    Indeed I got my info after the news, as the scrum teams were panicking this morning and then laughing

                    Apparently sapient have Lloyd’s over a barrow contract wise and could not force them


                    Sent from my iPhone using Contractor UK Forum

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