HOL hearing - 02/03/2020

[DodgyAccountant]

https://parliamentlive.tv/Event/Inde...5-74a0360e51c9

Keith Gordon (accountant and barrister) is giving evidence from 16:06 and very good it is too.

He makes a lot of good points. The committee actually seem to realise some of what is happening.

[simes]

Yes, very good questions and very good answers. Keith Gordon was spot on.

Am afraid the question for me still stands.

What power does the committee have to stop the momentum towards 6th April?

[eek]

Yes, very good questions and very good answers. Keith Gordon was spot on.

Am afraid the question for me still stands.

What power does the committee have to stop the momentum towards 6th April?

None..

[malvolio]

Yes, very good questions and very good answers. Keith Gordon was spot on.

Am afraid the question for me still stands.

What power does the committee have to stop the momentum towards 6th April?

The same power they have always had. Their findings will go back to the Lords so when the Finance Bill 2020 comes before them they can request changes on areas of concern, such as this particular fiasco. The Commons then may choose to accept those amendments or not (again, as usual) but if enough MPs are convinced that the Lords are right and the Chancellor (aka the Treasury) is wrong then they may vote down the relevant clauses in the Bill by voting for and so accepting the Lords' amendments.

What is clear is that the committee are not listening to the politics but to the harsh reality of life outside Westminster. They have no direct powers, but their influence should not be underestimated.

[eek]

The same power they have always had. Their findings will go back to the Lords so when the Finance Bill 2020 comes before them they can request changes on areas of concern, such as this particular fiasco. The Commons then may choose to accept those amendments or not (again, as usual) but if enough MPs are convinced that the Lords are right and the Chancellor (aka the Treasury) is wrong then they may vote down the relevant clauses in the Bill by voting for and so accepting the Lords' amendments.

What is clear is that the committee are not listening to the politics but to the harsh reality of life outside Westminster. They have no direct powers, but their influence should not be underestimated.

The damage is done - what would anything except completely, permanently scrapping the change actually fix?

[simes]

The same power they have always had. Their findings will go back to the Lords so when the Finance Bill 2020 comes before them they can request changes on areas of concern, such as this particular fiasco. The Commons then may choose to accept those amendments or not (again, as usual) but if enough MPs are convinced that the Lords are right and the Chancellor (aka the Treasury) is wrong then they may vote down the relevant clauses in the Bill by voting for and so accepting the Lords' amendments.

What is clear is that the committee are not listening to the politics but to the harsh reality of life outside Westminster. They have no direct powers, but their influence should not be underestimated.

Many thanks.

While my breath remains unheld, perhaps it is responsible and incumbent upon me to ask if anyone is aware of other such hearings which have had positive outcomes based on such hearings and findings? And if so...

[malvolio]

The damage is done - what would anything except completely, permanently scrapping the change actually fix?

Quite. The ineptitude of the Treasury and particularly HMRC in this whole farce is beyond belief. However, I was only trying to explain the mechanism. It should have been happening at least six months ago to have been of any real value.

[WordIsBond]

The damage is done - what would anything except completely, permanently scrapping the change actually fix?

The damage is done with a lot of clients. Others are still trying to figure out what to do.

Part of the problem is that clients went with the most extreme solution (ban PSCs) because they didn't even have the legislation, so there was no way for them to look for ways to navigate between the risks of IR35 liability on the one hand and employment tribunals on the other. Nor did they have a clear and reasonable CEST tool (nor do they yet) nor sufficient time after the legislation has passed to consider ways to rework their contracts to be clearly outside.

So, if we really are going to keep IR35 and really are going to put liability on the clients, you could do this:
1. Delay it for a year.
2. Mandate that HMRC come up with a CEST that actually reflects case law. That's got to include some of the "in business for yourself" factors it ignores right now, and it has to measure MOO.
3. Attach at least some employment rights to both inside-IR35 contracts (when determined thus by the client) and engagement through umbrellas (thus making the blanket umbrella policy and the blanket inside determinations not cost-free to the client).
4. In exchange for those employment rights, pass legislation that those who engage on these terms are by definition not employees so clients are protected from employment tribunals.
5. Legislate that HMRC will not pursue any historical IR35 claims that are not already open at the time the legislation takes effect (thus eliminating the retro fears).

Do all that and this stupid 'reform' to enforce this stupid Gordon-Brown-brainwave could at least have a measure of sanity attached to it. Do those five things and get the full legislation in place early and those clients who haven't made blanket bans would be less likely to do so, and it would be less painful to the contractors if they did. And those who have brought in the blanket bans would begin to at least somewhat relax them over time.

[simes]

Having listened to the learned folk on the HoL webcast, it appears that the whole thing needs to be started from scratch. Otherwise one remains in perpetuity in Elastoplast land.

Or does it?

Without knowing whether in fact this is even possible, (I am happy to be politely told it isn't possible without others taking the opportunity for another dressing down) bearing in mind the whole thrust of this mess is to earn HMRC more tax revenues, if they feel that the world of PSC Consultants is just taking advantage, would it not be at all possible for them to just increase the Corporation Tax by 2-3% on all LtdCos with the relevant Consultancy SIC codes?

1. The IR35 'law', such as it is, can remain in situ.
2. More tax revenue is earned.
3. No one skips a beat in terms of Projects, Clients' abilities to quickly hire and fire.
4. Clients do not have to create whole departments to learn contract law the way HR departments know employment law.
5. The mobile workforce model is not decimated.
6. A defined SIC code increase would not deter the Amazons and Starbucks from leaving the UK shores etc etc.

All this to demonstrate, I do not mind paying more tax if the country needs it. (Even if it Doesn't demonstrate an understanding of how tax revenues can be collected)

[eek]

Having listened to the learned folk on the HoL webcast, it appears that the whole thing needs to be started from scratch. Otherwise one remains in perpetuity in Elastoplast land.

Or does it?

Without knowing whether in fact this is even possible, (I am happy to be politely told it isn't possible without others taking the opportunity for another dressing down) bearing in mind the whole thrust of this mess is to earn HMRC more tax revenues, if they feel that the world of PSC Consultants is just taking advantage, would it not be at all possible for them to just increase the Corporation Tax by 2-3% on all LtdCos with the relevant Consultancy SIC codes?

1. The IR35 'law', such as it is, can remain in situ.
2. More tax revenue is earned.
3. No one skips a beat in terms of Projects, Clients' abilities to quickly hire and fire.
4. Clients do not have to create whole departments to learn contract law the way HR departments know employment law.
5. The mobile workforce model is not decimated.
6. A defined SIC code increase would not deter the Amazons and Starbucks from leaving the UK shores etc etc.

All this to demonstrate, I do not mind paying more tax if the country needs it. (Even if it Doesn't demonstrate an understanding of how tax revenues can be collected)

You are missing what this issue is now about - it isn't about total tax revenue it's protecting a hidden tax worth £70bn or so called Employer NI which because of contracting and the gig economy is rapidly disappearing...