Reply to: Agency Legislation will stifle self employment

[tractor]

...

I wouldn’t dismiss this immediately as simply not affecting you, in the longer term it is possible that it could influence how IR35 status is determined.

Currently we rely on precedents set in employment status cases to determine IR35 status – the main case that we look at being Ready Mixed Concrete which gives us three factors to look at. The amended agency legislation states that if a person is subject to supervision, direction and control then they are employed for tax purposes – this means that the other tests that we associate with testing self-employment could (in time) become redundant if new employment status cases set precedents in the courts.

So yes, it can be dismissed immediately, but watch this space because they are still after you.

FTFY

[tractor]

.....

Unfortunately an important distinction that IPSE seems to be blurring.

The confusion that this type of announcment generates is simply amazing. Self Employment is a method of working that is incompatible with limited company ownership. The two can never cross in employment status with the current statute and precedents.

Just because agents, clients and some professional services providers cannot get this does not make it anything else. They all seem to be incapable of anything but a 'one size fits all view of the world'. Unfortunately, it suits the Revenue and some professionals because they make lots of money out of dis and misinformation.

MS is right and furthermore IPSE should be working its proverbials off to be making the distinction rather than further blurring the issue.

[LisaContractorUmbrella]

What's all this about?

From the new legislation regarding 'disguised self employment' - mainly affects workers who used to operate as sole traders through CIS - it it's now found that they are working under the supervision, direction and control of the client they will be subject to full PAYE taxes i.e. Class 1 NIC's rather than Class 2.

[LisaContractorUmbrella]

I wouldn’t dismiss this immediately as simply not affecting you, in the longer term it is possible that it could influence how IR35 status is determined.

Currently we rely on precedents set in employment status cases to determine IR35 status – the main case that we look at being Ready Mixed Concrete which gives us three factors to look at. The amended agency legislation states that if a person is subject to supervision, direction and control then they are employed for tax purposes – this means that the other tests that we associate with testing self-employment could (in time) become redundant if new employment status cases set precedents in the courts.

I think that may be what HMRC are hoping for Craig but I can't see it happening any time soon - Ready Mixed was what, 1968 or thereabouts, and it is still the go to legal precedent for employment status cases today.

[Zero Liability]

What's all this about?

From 6 July 2015 onwards, agencies will have to send HMRC reports that contain details of all workers and their payments for those they consider to be genuinely self-employed, with penalties applying where reports are late, incomplete or incorrect.

Each report will contain:
the start and end dates of the reporting period
the worker’s personal details
the engagement and payment details

[Craig at Nixon Williams]

I wouldn’t dismiss this immediately as simply not affecting you, in the longer term it is possible that it could influence how IR35 status is determined.

Currently we rely on precedents set in employment status cases to determine IR35 status – the main case that we look at being Ready Mixed Concrete which gives us three factors to look at. The amended agency legislation states that if a person is subject to supervision, direction and control then they are employed for tax purposes – this means that the other tests that we associate with testing self-employment could (in time) become redundant if new employment status cases set precedents in the courts.

[LisaContractorUmbrella]

So does a ltd co. contractor opting out make this all go away for the agency?

And on the flip side, does a ltd co. contractor not opting-out mean that the agency need to prove you weren't an employee (as per the link) or does the fact that a ltd company contractor is not (usually) officially registered as self employed mean they don't have to bother?

I ask as the article says:



It does not have a bullet point saying:

is registered as self-employed.

Maybe the article is just not being clear?

Stop panicking This is nothing to do with Ltd Co contractors - it's all about sole traders

[Lewis]

So does a ltd co. contractor opting out make this all go away for the agency?

And on the flip side, does a ltd co. contractor not opting-out mean that the agency need to prove you weren't an employee (as per the link) or does the fact that a ltd company contractor is not (usually) officially registered as self employed mean they don't have to bother?

I ask as the article says:

Who is an employee?
From 6 April 2014, a worker must be treated as an employee for Income Tax and National Insurance purposes if the worker
is placed with a UK-based client
personally provides their services to the client
provides their services to the client, or is paid for their services, because of a contract between an employment intermediary and the client (or someone connected to the client)
is, or can be, supervised, directed or controlled by someone as to how they do the work
isn’t having the payments they receive for providing their services already treated as employment income

It does not have a bullet point saying:

is registered as self-employed.

Maybe the article is just not being clear?

[mudskipper]

Unfortunately an important distinction that IPSE seems to be blurring.

[LisaContractorUmbrella]

If it is only self-employed (in its true meaning) why does it mention limited companies?

Because it allows for potential situations where there is a Ltd Co structure involved through an intermediary i.e. like the old MSC's but operating PAYE

[Lewis]

If it is only self-employed (in its true meaning) why does it mention limited companies?

If a worker has more than one engagement in a reporting period, then the agency must provide details about each engagement, including:
how a worker was engaged to do the work – through a partnership, limited liability partnership, self-employed, limited company, another party that operated PAYE;

[Tasslehoff]

Oops. Sorry just realised this.

Admin can we close before NLUK rips me a new one.

[northernladuk]

It's already well known agencies won't touch self employed due to previous legislation. This just adds to that.

[The Spartan]

Agency Legislation Will Stifle Self-Employment - Contractor Weekly

Discuss

But I'm not self-employed, I work for a limited company.

[TheFaQQer]

I'm not self-employed.