Reply to: Additional Reporting Requirements - HMRC Consultation

[TheFaQQer]

Yes, here is the draft Statutory Instrument.

Although early on, HMRC specifically said independents (limiteds) would be excluded, they are expressly included.

Issued this week.

Hands up anyone who didn't see this coming.

Anyone? Anyone?

[tractor]

...

Has anything come of it yet, or are they still in discussions?

Yes, here is the draft Statutory Instrument.

Although early on, HMRC specifically said independents (limiteds) would be excluded, they are expressly included.

Issued this week.

[Zero Liability]

Yep, they will. Makes the idea of an FLC rather pale into insignificance, doesn't it.

The IR35 Forum (which includes, REC, ASPCo, ICAEW and IPSE among others) are strongly opposing this whole idea.

Has anything come of it yet, or are they still in discussions?

[jamesbrown]

If it gets reported, then we will become a target. Unless there is some kind of handy alternative way to operate - a limited company for freelancers, if you will - that is exempt from the reporting regulations. It would, of course, have it's own tax regime, remove the ability to shift income to your spouse, and result in a higher tax bill for the contractor involved...

The only thing that needs is an acronym and a trade body to pimp the idea.

[eek]

I know your hands are somewhat tied Eek, but are you able to say when this work started?

A long time ago. However that edit was all to do with my inbuilt HMRC sarcasm than any knowledge from elsewhere .

HMRC will always want as much information as possible to feed into their big data systems. I some how doubt agencies do.......

[TheFaQQer]

It is just reporting requirements, it hasn't changed the law, i.e. if you are outside IR35 whether this is reported or not doesn't make any difference. Whether an agency involved in IT contracting is covered by these regulations is another matter. That is probably the point that needs to be clarified. But it does appear being a Ltd isn't something that is excluded.

However if it does get reported it might become a way of identifying targets.

If it gets reported, then we will become a target. Unless there is some kind of handy alternative way to operate - a limited company for freelancers, if you will - that is exempt from the reporting regulations. It would, of course, have it's own tax regime, remove the ability to shift income to your spouse, and result in a higher tax bill for the contractor involved...

[tractor]

...

ftfy

I know your hands are somewhat tied Eek, but are you able to say when this work started?

[eek]

On Page 3, (iv)



It is just reporting requirements, it hasn't changed the law, i.e. if you are outside IR35 whether this is reported or not doesn't make any difference. Whether an agency involved in IT contracting is covered by these regulations is another matter. That is probably the point that needs to be clarified. But it does appear being a Ltd isn't something that is excluded.

However if it does get reported it would be a way of identifying targets.

ftfy

[BlasterBates]

Is a limited company being engaged by an agency to provide services to the client caught by the regulations or not??? I suspect that if we aren't careful, we absolutely will be.

On Page 3, (iv)

where the reason is the payments are made to a Limited company the registration number of that company

It is just reporting requirements, it hasn't changed the law, i.e. if you are outside IR35 whether this is reported or not doesn't make any difference. Whether an agency involved in IT contracting is covered by these regulations is another matter. That is probably the point that needs to be clarified. But it does appear being a Ltd isn't something that is excluded.

However if it does get reported it might become a way of identifying targets.

[SueEllen]

One of the reasons I can see why HMRC want to do this is not only forcing us in to PAYE it's because some agencies are too damn lazy to do proper checks on contractors.

There is a thread on here which mentions 2 contractors working through dissolved companies. The multiple agencies involved have done nothing to confirm these individuals are working through companies legitimately and so have been happy to let them invoice for VAT. This means the HMRC are losing out on VAT and Corp tax.

[tractor]

...

Yep, they will. Makes the idea of an FLC rather pale into insignificance, doesn't it.

The IR35 Forum (which includes, REC, ASPCo, ICAEW and IPSE among others) are strongly opposing this whole idea.

No.

They are but two tactics in the strategy to force people into PAYE.

I have said many times here and at IPSE that HMRC has given up on IRR35 wrt entrenched contractors who know their way around. A long time ago, they went upstream to the agents and soon it will be clients. If they make it onerous on the agents to deal with us as ltds AND offer a way out with FLCs, we will be forced into the latter and to accept a 'fair salary/dividend split' where tax and NHI are already merged.

Just because you are incapable of accepting that as a risk does not make it less of one.

[DaveB]

https://www.gov.uk/government/public...gulations-2015

Consultation closes tomorrow about HMRC introducing additional reporting requirements to agencies / employment businesses about disguised employment.

As I read it, it's not particularly clear whether this would / could be used by HMRC to force agencies to provide all details relating to limited companies:



Is a limited company being engaged by an agency to provide services to the client caught by the regulations or not??? I suspect that if we aren't careful, we absolutely will be.

Based on the reading of the guidance, on the face of it I would say not. Everything is directed towards supply of services by and payments to an individual not to a company, PSC or otherwise.

Is it also worth asking how this proposed legislation is intended to work (or not) with IR35?

[malvolio]

Well if PCG, oops, sorry, IPSE get their sticky snouts near it everyone will be dekcuf. I mean, they sold every contractor out before.

It was IPSe brought this to everyone else's attention AIUI. HMRC were only consulting with the agencies up to about five days ago.

But hey, if you want HMRC setting tax policy then that's your decision.

[BolshieBastard]

https://www.gov.uk/government/public...gulations-2015

Consultation closes tomorrow about HMRC introducing additional reporting requirements to agencies / employment businesses about disguised employment.

As I read it, it's not particularly clear whether this would / could be used by HMRC to force agencies to provide all details relating to limited companies:



Is a limited company being engaged by an agency to provide services to the client caught by the regulations or not??? I suspect that if we aren't careful, we absolutely will be.

Well if PCG, oops, sorry, IPSE get their sticky snouts near it everyone will be dekcuf. I mean, they sold every contractor out before.

[TheFaQQer]

Yep, they will. Makes the idea of an FLC rather pale into insignificance, doesn't it.

Not necessarily. You make FLCs exempt from the new reporting requirements, and agencies are going to force contractors to use them.

But I've been saying that since early September, so if it hasn't occurred to people that this is possible / probable / likely by now, then I really don't know how else I can say it.