Reply to: Tory Brexit No Deal DOOM™: budget raid on freelancers!

[Stevie Wonder Boy]

They shouldn't. They should pay a premium to the LTD company so that it can provide those benefits to its staff.

My gripe isn't with the client. It's with HMRC.

What is really bizarre is the the Labour party brought in the two year rule for Ltd company director travel expenses. It's hard to believe they would just decide to do over 200K contractors and expect this not to have a significant impact.

If Hammond does go for it, I get the feeling this will be the last thing he does before he is sacked. This will go wrong quickly.

[Stevie Wonder Boy]

He's a fool.

Has he been talking to Brown?

He is the son of Osborne who is the son of Brown. - When the money finally runs out they will be forced to form an actual Conservative Government and cut the size of the beast. It's just one tax rise after another.

[Hobosapien]

But will I be able to keep paying into my existing pension scheme or will I have to go with whatever provider the brolly / agency uses?

If the latter case, my pension plan could end up very fragmanted because there will be situations where I will have to be on a different agency's / brolly's payroll on a contract by contract basis.

There may be more (accurate ) info in the appropriate sub forum, but I think you'll not be able to use your existing pension scheme and will have to use the brolly's. Not sure if anyone has been able to get an agency to offer payroll cost effectively so maybe brolly is the only sensible option.

At the end of the contract I think you can transfer or take ownership of your pension contributed to via the brolly as it's independent and set up in your name, so no long term issues if the brolly closes.

It may be easier to use same brolly whenever one is required if moving between Ltd and brolly, while that makes sense. Then can contribute to same pension pot.

Though having multiple pots with different entities may be safer in the long term, and also a form of balancing the investment in case one provider has a bad run.

[tomtomagain]

You have employment rights with your limited co. Why should the client company give you paid holiday, sick pay, pension scheme, redundancy terms or training?

They shouldn't. They should pay a premium to the LTD company so that it can provide those benefits to its staff.

My gripe isn't with the client. It's with HMRC.

[Pip in a Poke]

No, not via Ltd company pension but, unless they change the rules, can still do salary sacrifice style contributions pre-tax via brolly/agency payroll (if offered) to still take advantage of that tax break while it exists.

But will I be able to keep paying into my existing pension scheme or will I have to go with whatever provider the brolly / agency uses?

If the latter case, my pension plan could end up very fragmanted because there will be situations where I will have to be on a different agency's / brolly's payroll on a contract by contract basis.

[Hobosapien]

Correct me if I'm wrong but if they implement the PS rules in the private sector, you're not going to be able to operate through a LTD if you're IR35 caught.

Am I right?

Yes I think so, if they implement the same PS rules. I was working on the basis of the current rules, as god knows what tulips they'll plant in the budget for private sector.

And this, of course, means you won't be able to mitigate your tax liability by throwing money at your company pension as you can under the current rules when IR35 caught within the private sector.

No, not via Ltd company pension but, unless they change the rules, can still do salary sacrifice style contributions pre-tax via brolly/agency payroll (if offered) to still take advantage of that tax break while it exists.

[Pip in a Poke]

That's the argument for maintaining enough of a tax gap between permie and contractor so the Ltd can pay those benefits and the contractor doesn't lose out in take home pay.

So to maintain that gap, contractors need to get increased rates to make it worthwhile not going permie from a pay perspective (ignoring the other benefits of not being a permie such as performance reviews and other office bollox), like some/many have been able to do recently from the public sector.

With the divi tax and other restrictions on Ltd based contractors caught by IR35 it then becomes a choice between Ltd covering those benefits or going via brolly that offers those benefits. The bottom line being the client has a regular payment to make for a resource, whether it be direct contractor, contractor via agency, contractor via agency/brolly, or permie. They all cost an amount and sometimes the flexibility of not having permies twiddling their thumbs week in week out between projects is worth the short term increase in costs, which is why contracting has been popular with clients and rewarding for contractors for so long.

The government only do what they are told by those funding their parties or offering them opportunities after their stint as an MP in parliament, so the future of contracting depends on the goals of those with real power over the government, and I'm not talking about those at AIPSE.

Correct me if I'm wrong but if they implement the PS rules in the private sector, you're not going to be able to operate through a LTD if you're IR35 caught.

Am I right?

And this, of course, means you won't be able to mitigate your tax liability by throwing money at your company pension as you can under the current rules when IR35 caught within the private sector.

[KentDogWalker]

this countries tax laws, sheesh

[SueEllen]

Oh hello HMRC Maybe you should get your Treasury friends on here.

[SueEllen]

Quoting from the original article in the other thread:



It's the same old language again - and I'll ask again what exactly - as defined by law - are 'the correct personal tax and national insurance contributions'? It's a bit like expenses isn't it where we get told things like "Try not to go over x amount otherwise it could be classed as entertainment"

No - what are the exact rules in black and white as defined in law? I won't accept shaming or wooly language around their interpretations of shoulds and shouldn'ts. BUt they won't because this is how they selectively decide who's in the club and who isn't. Oh and this as well:



So he wants me to take on the risk and admin of providing flexible skills with no HR overhead for end client and take away what makes it worth doing - just to score points in an attempt to keep his job and try and win the next election? Nice play of the NHS/social care card as well. Spare a thought for the war industry shareholders with billions in offshore havens as well - those super yachts don't pay for themselves you know.

So we'll form micro consultancies and provide services for specific bits of work - or go perm or move abroad or go plan B. Maybe we'll get publicly shamed in the media soon...

He's a fool.

Has he been talking to Brown?

[Jog On]

Quoting from the original article in the other thread:

The Treasury is targeting IT contractors, consultants and other freelancers who are paid through “personal service companies”. Currently, it is up to the workers to pay the correct personal tax and national insurance contributions. HM Revenue & Customs believes that most of them do not comply in full.

It's the same old language again - and I'll ask again what exactly - as defined by law - are 'the correct personal tax and national insurance contributions'? It's a bit like expenses isn't it where we get told things like "Try not to go over x amount otherwise it could be classed as entertainment"

No - what are the exact rules in black and white as defined in law? I won't accept shaming or wooly language around their interpretations of shoulds and shouldn'ts. BUt they won't because this is how they selectively decide who's in the club and who isn't. Oh and this as well:

But it would also hand a cash boost to Hammond, who is scrambling to fund public sector pay rises and to increase spending on the NHS and social care.

So he wants me to take on the risk and admin of providing flexible skills with no HR overhead for end client and take away what makes it worth doing - just to score points in an attempt to keep his job and try and win the next election? Nice play of the NHS/social care card as well. Spare a thought for the war industry shareholders with billions in offshore havens as well - those super yachts don't pay for themselves you know.

So we'll form micro consultancies and provide services for specific bits of work - or go perm or move abroad or go plan B. Maybe we'll get publicly shamed in the media soon...

[Hobosapien]

6 of those bullet points are available to contractors via their own limited company. The fact you decide to fore go them from your limited co is a personal choice.

You have employment rights with your limited co. Why should the client company give you paid holiday, sick pay, pension scheme, redundancy terms or training?

That's the argument for maintaining enough of a tax gap between permie and contractor so the Ltd can pay those benefits and the contractor doesn't lose out in take home pay.

So to maintain that gap, contractors need to get increased rates to make it worthwhile not going permie from a pay perspective (ignoring the other benefits of not being a permie such as performance reviews and other office bollox), like some/many have been able to do recently from the public sector.

With the divi tax and other restrictions on Ltd based contractors caught by IR35 it then becomes a choice between Ltd covering those benefits or going via brolly that offers those benefits. The bottom line being the client has a regular payment to make for a resource, whether it be direct contractor, contractor via agency, contractor via agency/brolly, or permie. They all cost an amount and sometimes the flexibility of not having permies twiddling their thumbs week in week out between projects is worth the short term increase in costs, which is why contracting has been popular with clients and rewarding for contractors for so long.

The government only do what they are told by those funding their parties or offering them opportunities after their stint as an MP in parliament, so the future of contracting depends on the goals of those with real power over the government, and I'm not talking about those at AIPSE.

[BR14]

But that's the entire point.

A chancellor with intelligence would work out how to screw us without annoying big business, ensuring p*ssed off people like me wouldn't moan to our Tory MPs and then take the chance to sign on at every opportunity.

HEAR! HEAR!

[SueEllen]

It's already close to income tax levels (when corp tax is factored in).

But that's the entire point.

A chancellor with intelligence would work out how to screw us without annoying big business, ensuring p*ssed off people like me wouldn't moan to our Tory MPs and then take the chance to sign on at every opportunity.

[washed up contractor]

Because the contractor :

• Has no employment rights
• Gets no paid holiday
• Gets no sick pay
• Gets no company pension
• Gets no redundancy
• Is a short-term, skilled-employee and therefore commands a premium
• Gets no training
• Expects no career progression

Those are my arguments against.

6 of those bullet points are available to contractors via their own limited company. The fact you decide to fore go them from your limited co is a personal choice.

You have employment rights with your limited co. Why should the client company give you paid holiday, sick pay, pension scheme, redundancy terms or training?