Is there an argument for keeping IR35?

[PhilAtBFCA]

IR35 - Better the devil you know ?

Maybe it would help if we had some way of defining self employment status ?

HMRC will not give a cast iron way of defining self employment, and so the uncertainity exists in regard to IR35.

IR35 is about proving a hypothetical employment relationship, not about proving self employment ( yes, there is a small difference ). Even defining employment is only done with respect to case law, although in some respects if you look at the preminent case on this, Ready Mixed Concrete V Minister of Pensions 1968, it is clear what needs to be in place for an employment relationship to exist.

Neither employment or self employment is defined in legislation from a tax point of view, and changing this may well provide more certainty.

But I can also see where HMRC and any government ( or potential government ) are trapped. If they produce clear legislation that says exactly what self employment and employment is, then everyone would use that to the best of their ability to construct arrangements that are the one they require. That could be worse for HMRC revenue than the current situation !

Phil

[ASB]

Quite. Can I interest you in a scheme that converts income into capital gain?

By some strange coincidence I ran one of those for about 25 years. It also had a tendency to convert turnover into investment income at some points. Many years ago it had a tendency not to do this. The existence of the investment income surchange was, of course, purely a coincidence.

It is quite remarkable how MyCo's remuneration policy has tended to comprise of maximum rentention for me and smallest for the government. Can't think how that can possibly have happened.

[Emigre]

No, but there is a good argument for moving towards equality in the way income in all it's varying forms is taxed.

It is bizarre in my view that different sorts of income are charged at different rates. It is of course blindingly obvious that anybody who can control what "sort" of income they receive will do so.

Quite. Can I interest you in a scheme that converts income into capital gain?

[ASB]

No, but there is a good argument for moving towards equality in the way income in all it's varying forms is taxed.

It is bizarre in my view that different sorts of income are charged at different rates. It is of course blindingly obvious that anybody who can control what "sort" of income they receive will do so.

[malvolio]

Is there an argument for keeping IR35?

No. Next...

[expat]

Let contractors be self employed and the problem goes away.

No need for that option, there already is a work status suitable for workers like us: it's called being employed by Accenture or EDS, and I'm pretty sure that's what HMG think we should do, though to their amazement and suspicion we keep trying to wriggle out of the obvious.

[Epiphone]

Let contractors be self employed and the problem goes away.

[simes]

I am not sure the owner of DragonFly would agree with that.

Indeed, and the three or four others in the same boat.

But compared to the remaining thousands....?

[The Lone Gunman]

GET RID OF IR35.

You may think that we can easily avoid it, but it only takes 1 court decision to undermine that.

I do not like the uncertainty that in 6 years time the tax man can come calling to recover money from me earned on a contract today. Particularly if that tax mans decision is based on a court ruling made 5.5 years into the future. A ruling that I have no way of avoiding as my crystal ball is broken.

I dont care if the replacement makes me liable to 95% tax on all my income, really I dont care. I dont care because at that point I can set my rates accordingly and know what I am going to pay out.
At the moment I have to take best guess and hope.

[BrilloPad]

Bearing in mind the results seem to speak for themselves in terms of Govt vs contractor wins, it does appear to be a relatively toothless ruling.

Since contractors would now seem to be aware of where they stand in relation to staying outside IR35, and the insurance and legal aid through PCG takes care of any hiccups, my question is;

Are we better off with what we know and can seemingly easily tackle, rather than facing something currently unknown with all the variant re-educating and back up plans?

Better the devil you know...

Personally, I wonder about the sanity of pushing something out to be potentially replaced by something more toothy. The 'uncertainty' as exemplified by people wishing to have it removed or replaced would, on the face of it, be less of an uncertainty than a contractor finding his next contract.

I am not sure the owner of DragonFly would agree with that.

[swamp]

Theoretically, having something in place to deal with individuals contracting through Ltds but actually being employees in all but name makes sense to me. But then individuals have Ltds mainly because the government doesn't make being self-employed favorable in the first place. You shouldn't have to form a company to work as a contractor, ideally you could work as a sole trader or something without being killed by tax.

WHS

I've always believed contractors should be a special category of sole traders. I'd even pay very slightly more tax if it meant being on a firm financial footing (not possible with the IR35 lottery) and paying less accounting fees, not to mention much much less paper work.

[d000hg]

Theoretically, having something in place to deal with individuals contracting through Ltds but actually being employees in all but name makes sense to me. But then individuals have Ltds mainly because the government doesn't make being self-employed favorable in the first place. You shouldn't have to form a company to work as a contractor, ideally you could work as a sole trader or something without being killed by tax.

[simes]

Bearing in mind the results seem to speak for themselves in terms of Govt vs contractor wins, it does appear to be a relatively toothless ruling.

Since contractors would now seem to be aware of where they stand in relation to staying outside IR35, and the insurance and legal aid through PCG takes care of any hiccups, my question is;

Are we better off with what we know and can seemingly easily tackle, rather than facing something currently unknown with all the variant re-educating and back up plans?

Better the devil you know...

Personally, I wonder about the sanity of pushing something out to be potentially replaced by something more toothy. The 'uncertainty' as exemplified by people wishing to have it removed or replaced would, on the face of it, be less of an uncertainty than a contractor finding his next contract.