Reply to: MPs slam ‘flawed’ IR35 and call for clamp down on ‘wild west’

[SimonMac]

but the flexible economy is going nowhere

The problem is the gig economy covers a wide range of players, at one end there is us who are happy to have less rights but with more flexibility in how we bill, and the other end of the scale the likes of deliveroo drivers who want the rights that are being denied them (these are generalisation as i know there are many who sit somewhere between these two extremes)

[Whorty]

I think you are way past that from your posts, maybe a rubber room?

Only for my S&M nights

[vetran]

Must be time for my medication

I think you are way past that from your posts, maybe a rubber room?

[OwlHoot]

So, if there was an appetite to resolve the unlimited liability of a sole trader, and remove the risk of the agency being liable for the sole trader not paying the correct tax, then many contractors could go this route and bypass the umbrella - thus removing the totally unnecessary and pointless umbrella and it's non-value add costs?

The snag is umbrella companies very much do have value-added - for HMR&C, if no one else!

Remember, HMR&C and related civil servants hate contractors and the self-employed with a passion. As far as they are concerned, we are loose cannons and, very likely, tax dodgers to boot!

[Whorty]

Are you ok? Do you need an intervention?

Must be time for my medication

[ladymuck]

Absolutely ... and much easier to keep throwing sticking plasters at the problem ... but the flexible economy is going nowhere, and there is always some dodgy shyster looking to rip the unsuspecting off ... just needs a competent UK government to fix this issue.

Wow, what am I thinking ..... UK ... competent government ... fix problems .... I must have nodded off for a moment there

Are you ok? Do you need an intervention?

[Whorty]

There is also something around the agent being responsible of the sole trader doesn't pay their taxes properly which is covered under the debt transfer bit but isn't clear.

Yes (but that's a lot of stuff and there are vested interests in not doing it).

Absolutely ... and much easier to keep throwing sticking plasters at the problem ... but the flexible economy is going nowhere, and there is always some dodgy shyster looking to rip the unsuspecting off ... just needs a competent UK government to fix this issue.

Wow, what am I thinking ..... UK ... competent government ... fix problems .... I must have nodded off for a moment there

[jamesbrown]

So, if there was an appetite to resolve the unlimited liability of a sole trader, and remove the risk of the agency being liable for the sole trader not paying the correct tax, then many contractors could go this route and bypass the umbrella - thus removing the totally unnecessary and pointless umbrella and it's non-value add costs?

Yes (but that's a lot of stuff and there are vested interests in not doing it).

[vetran]

So, if there was an appetite to resolve the unlimited liability of a sole trader, and remove the risk of the agency being liable for the sole trader not paying the correct tax, then many contractors could go this route and bypass the umbrella - thus removing the totally unnecessary and pointless umbrella and it's non-value add costs?

Well with a likely growth in the gig economy and people freelancing the Government need to fix the liability and taxation issues.


The disguised employment idea isn't going to last long now UBER has broken its duck.

[Whorty]

There is also something around the agent being responsible of the sole trader doesn't pay their taxes properly which is covered under the debt transfer bit but isn't clear.

The problem arises because the ITEPA and related legislation puts an agency or end-client on the hook if a self-employed person fails to pay the appropriate taxes. You may find a willing client with whom you can work directly. But the main reason to not work in this way is unlimited personal liability.

So, if there was an appetite to resolve the unlimited liability of a sole trader, and remove the risk of the agency being liable for the sole trader not paying the correct tax, then many contractors could go this route and bypass the umbrella - thus removing the totally unnecessary and pointless umbrella and it's non-value add costs?

[jamesbrown]

The problem arises because the ITEPA and related legislation puts an agency or end-client on the hook if a self-employed person fails to pay the appropriate taxes. You may find a willing client with whom you can work directly. But the main reason to not work in this way is unlimited personal liability.

[northernladuk]

I'm relatively new to contracting, only started in 2007, but can someone explain why we can't be 'self employed' and not have to go through a LTD or umbrella? What was the reason for forcing all contractors through a LTD rather than invoicing direct (assuming you cover yourself with insurance etc)?

As for umbrellas, if I go back contracting this year or next, I'll go this route again for ease and I'm not planning to work that many years to warrant a LTD, but umbrellas are an extra layer that should just not be needed. To me, it's another solution to fix a problem caused by the government (of whichever flavour).

The whole flexible working economy needs to be looked at from scratch.

So, why can’t contractors be sole traders? Well, clients and agencies won’t do business with sole traders for many reasons. These include the fear clients have that a sole trader might be seen in law as an employee with all the employment rights that go with that; whilst for agencies, they are wary of debt transfer and employment agency legislation that requires workers to be paid under PAYE schemes.

In addition to all of this, contracting as a sole trader, even if it could be done, would have downsides for contractors themselves. For example, sole traders face virtually unlimited liability, which means that as sole traders their homes and other personal assets would be at risk of litigious clients.

There is also something around the agent being responsible of the sole trader doesn't pay their taxes properly which is covered under the debt transfer bit but isn't clear.

[Whorty]

I'm relatively new to contracting, only started in 2007, but can someone explain why we can't be 'self employed' and not have to go through a LTD or umbrella? What was the reason for forcing all contractors through a LTD rather than invoicing direct (assuming you cover yourself with insurance etc)?

As for umbrellas, if I go back contracting this year or next, I'll go this route again for ease and I'm not planning to work that many years to warrant a LTD, but umbrellas are an extra layer that should just not be needed. To me, it's another solution to fix a problem caused by the government (of whichever flavour).

The whole flexible working economy needs to be looked at from scratch.

[LondonManc]

Rishi will do f**k all to jeopardise his wife's inheritance, don't worry about that.

No conflict/confluence of interests though.

[eek]

You are aware that by transparency the request is:-

1) Make sure contractors know what they are being paid
2) Make sure end clients can confirm that pay parity (after 12 weeks) occurs when it's legally required between people doing equivalent work (i.e. drivers)
3) the removal (or at least the clear signposting) of excess umbrella fees being charged with money ending up back at the agency
4) using the opt out (campaigned for originally as a quid pro quo for people outside IR35) isn't abused by agencies who can't use it for agency workers but can use it if said workers go via an umbrella

I'm at a loss as to why people see a problem with any of those items.

BTW - I suspect there will be delivery issues next week due to a lack of HGV drivers - a lot of whom are going to get a very nasty surprise when they see their first umbrella pay packet tomorrow.

As I've pointed out before we are rarely the target of these government campaigns, merely the people impacted by them.