Reply to: "Consultation" on Employment Intermediaries and Tax Relief for Travel and Subsistence

[mudskipper]

Any update on whats happening with this?

Is it happening in the coming tax year?

It won't apply to Ltd Company contractors operating outside IR35.

Brollies (where the worker is subject to SDC) or Ltd Co IR35 caught will lose relief.

See

http://www.contractoruk.com/news/001...t_get_out.html

https://www.ipse.co.uk/news/draft-fi...tumn-statement

[daemon]

Any update on whats happening with this?

Is it happening in the coming tax year?

[xar18]

Won't it be on employees not directors if anything?

Not sure. The language was along the lines of tackling "individuals who incorporate for tax management purposes" but the rules also don't seem to apply to "firms with employees". Just feels like there is an option there if there are multiple employees. Note I am only referring to the removal of the travel expenses here.

[northernladuk]

Out of curiosity, if the company had 2 fee earning directors do the same rules then apply? It seems to be targeted at one man companies, so am wondering if 2 directors (or more) = exempt? Not saying many people could make this work, just trying to get a baseline. I.e. Could you incorporate with a wife or mate and split the income/dividends based on day rate? No doubt a bunch of risks, just trying to determine if technically viable? Effort/hassle/risk possibly outweighs the benefit.

Won't it be on employees not directors if anything?

[xar18]

Out of curiosity, if the company had 2 fee earning directors do the same rules then apply? It seems to be targeted at one man companies, so am wondering if 2 directors (or more) = exempt? Not saying many people could make this work, just trying to get a baseline. I.e. Could you incorporate with a wife or mate and split the income/dividends based on day rate? No doubt a bunch of risks, just trying to determine if technically viable? Effort/hassle/risk possibly outweighs the benefit.

[jamesbrown]

Eh ? Think you're mixing dividend tax with PSC consultation here. Unless plumbers are designated as PSCs (whatever that is going to mean) or are caught by the 'new improved' IR35.

The disqualifying requirement of (the right of) SD or C is a difficult test. A PSC will not be designated on the basis of trade or profession, so all trades and professions are within scope, subject to meeting the disqualifying requirements. We then await the IR35 review to bring the various tests into line, one way or another. Of course, it's worth bearing in mind that all of these terms are defined, for practical purposes, in the courts, so HMRC doesn't get the final word on this. Useful examples here. Personally, I've always thought that control is the most important of the various employment status tests. That being said, it's much easier to prescribe qualifying conditions for tax reliefs (e.g. reliefs on uprated dividend taxes) than attempt to redefine employment status.

[Contreras]

I'd be willing to accept a cash bet that it will have a meaning sometime in the next 18 months and that it will hurt contractors using the ltd/agency/client model that most do.

Agree, except I wouldn't be so sure that only those via agencies will be affected.

[TestMangler]

A PSC is simply a limited company used by a single person... There is no legal definition of a PSC as we all well know...

That's why I said 'whatever that is going to mean' in brackets after it.

It is used to describe a company with one director who provides their personal service. That would exclude Joe Bloggs Plumbing Ltd as he does not apply to fit your sink with a personal CV. And before some smart are says that they are an independent business in their own right, try responding to a jobserve ad with someone else's CV but turn up for the 'business kick of discussion' or interview as it was called pre 2000, yourself.

I'd be willing to accept a cash bet that it will have a meaning sometime in the next 18 months and that it will hurt contractors using the ltd/agency/client model that most do.

[eek]

Eh ? Think you're mixing dividend tax with PSC consultation here. Unless plumbers are designated as PSCs (whatever that is going to mean) or are caught by the 'new improved' IR35.

A PSC is simply a limited company used by a single person... There is no legal definition of a PSC as we all well know...

[TestMangler]

Builders, plumbers etc won't be able to claim just like us if they are incorporated, and a lot are now to limit liability.

Unfortunately the idiots who wrote the policy document clearly aren't lawyers or they would be aware that in the various jurisdictions of the UK you have to make things very clear.

Eh ? Think you're mixing dividend tax with PSC consultation here. Unless plumbers are designated as PSCs (whatever that is going to mean) or are caught by the 'new improved' IR35.

[TheCoconutDog]

Builders, plumbers etc won't be able to claim just like us if they are incorporated, and a lot are now to limit liability.

Unfortunately the idiots who wrote the policy document clearly aren't lawyers or they would be aware that in the various jurisdictions of the UK you have to make things very clear.

Where do you get the fact that builders and plumbers won't be able to claim ?

[SueEllen]

Or move home to be closer to where most contracts are???
But am aware this is not realistic most of the time... Jeeez even people living just outside London (Kent area) who have a short train commute, their travel expense every year is not a joke thanks to the railway prices !!

In fact even though I live in the outskirts of London, this will make working at Canary Wharf not viable at all as its closer and a lot easier for me to drive there than to train it, but if I can't claim mileage and parking, then its not worth it !

Maaan, I got hit from every angle this Budget, Div tax, BTL and T&S !!

So who are still able to claim for T&S ?? Large consultancies only , what about builders, plumbers etc??

Builders, plumbers etc won't be able to claim just like us if they are incorporated, and a lot are now to limit liability.

Unfortunately the idiots who wrote the policy document clearly aren't lawyers or they would be aware that in the various jurisdictions of the UK you have to make things very clear.

[tractor]

....

Or move home to be closer to where most contracts are???
But am aware this is not realistic most of the time... Jeeez even people living just outside London (Kent area) who have a short train commute, their travel expense every year is not a joke thanks to the railway prices !!

In fact even though I live in the outskirts of London, this will make working at Canary Wharf not viable at all as its closer and a lot easier for me to drive there than to train it, but if I can't claim mileage and parking, then its not worth it !

Maaan, I got hit from every angle this Budget, Div tax, BTL and T&S !!

So who are still able to claim for T&S ?? Large consultancies only , what about builders, plumbers etc??

At this point, everyone who was claiming last week.

A consultation was announced, once that is complete, a proposal will be made that has to go through Parliament if it is attached to any law for enablement purposes, otherwise it will be via an SI which can be implemented immediately. But don't expect any changes until next April.

[SandyD]

ESM2057 - Agency and temporary workers: agency legislation - provisions from 6 April 2014: supervision, direction or control example - IT consultant

The two examples given are poles apart. Most of us fall somewhere in the middle.

Total B.S of the HMRC... who would ask someone to build anything for them and tell them you are free to do whatever you like and however you like it !! did you ever get a builder to build an extension or a conversion etc and told them build whatever you like and however you think it should go?? don't they need to submit their plans to the owners first then and authorities for approvals and changes...

Same with artists.. who commission someone without giving them context and direction on what they way from them, and ask for progress, prototype to approve etc??
Their scenario 1 is totally unrealistic and does not exist IMO

[SandyD]

it's not necessarily the end of the world, I will just need to put my rate up 7.5% and get my agency to pay for all expenses.

I will just pass the cost on to someone else to deal with.

I can see this ending well.

Or move home to be closer to where most contracts are???
But am aware this is not realistic most of the time... Jeeez even people living just outside London (Kent area) who have a short train commute, their travel expense every year is not a joke thanks to the railway prices !!

In fact even though I live in the outskirts of London, this will make working at Canary Wharf not viable at all as its closer and a lot easier for me to drive there than to train it, but if I can't claim mileage and parking, then its not worth it !

Maaan, I got hit from every angle this Budget, Div tax, BTL and T&S !!

So who are still able to claim for T&S ?? Large consultancies only , what about builders, plumbers etc??