Reply to: Solving the IR35 and AWR complexities. And a new business model to wit.

[tractor]

...

See the first post.

I did, several times and it really is not clear whether it's a proposal or a troll. If it's the former a little background would be good and if it's official it should be attributed

[vetran]

the simple answer is to follow the Australian system that has a check-list based on actual business structure and behaviour.

do you have employees? > wife as cosec = allow some dividends
Do you have proper businesses premises ? yes = allow some dividends
do you have multiple customers? > 2 =allow some dividends (depending on split)

or provide a single trader ltd structure that allows some limited tax planning, I thought the fixed rate vat would be it.

All this converting to employees is a mess. You get the worst of both worlds.

I would say allow single non employees as contractors but IP & autonomy has to be registered with them. So companies can't force them to be single employer resources. If you want exclusivity then you pay proper tax & maintenance bit like a marriage.

Employers then make a choice, hire as a employee and own them + pay for them or as a contractor and get their expertise only.

[BobTheCrate]

How would it be decided which party is the employer?

Same as it is now I guess. Whoever benefits from the work being performed and whoever is paying for the work; provided there is a recruitment agent in the chain.

[gingerjedi]

See the first post.

Yeah I can see that, is the OP the proposer then?

Who GAS what BobTheCrate has to say?

I must be missing something shirley??

[Old Greg]

How would it be decided which party is the employer?

Rock-paper-scissors. Best of three.

[BobTheCrate]

No they would be a supplier separate from the relationship. the contractors wouldn't be paid via agencies but direct. However via a nod & a wink the contractor would be their responsibility. Just like a rental management agent.

That'd be an interesting scenario in itself Vetran. But ...

A recruitment agency acting as a rental management agent to avoid the temp being classed as an employee; wouldn't stand up to much scrutiny at all.

i) Given the purpose for such a management company is to provide the hirer with temps, it is difficult to believe that requirement would not be present in the contract between hirer and agent. Unless they conspire to lie in the written contract - a rather dangerous and risk full move.

ii) And under that contract the hirer would be paying the agency (sorry .. management rental company) a fee.

And those two easily discovered facts would satisfy the proposal for an employee relationship with the temp.

iii) I can't believe any agency (whatever they called themselves) allowing any temp anywhere near the hirer without a contract between temp and agency.

[Ignis Fatuus]

A proposed solution for temporary worker law for purposes of employment and tax law. And the much desired new business model for genuine self-employed.

'If the worker is paid directly or indirectly by a recruitment agency, then the worker is classed as a temporary employee for both tax and employment law regulations.'

How would it be decided which party is the employer?

[cojak]

Is it? Where?

See the first post.

[gingerjedi]

Fortunately it is just 'proposed'...

Is it? Where?

[vetran]

They can call it what they like - they'd be in the financial chain and so employee condition exists.

No they would be a supplier separate from the relationship. the contractors wouldn't be paid via agencies but direct. However via a nod & a wink the contractor would be their responsibility. Just like a rental management agent.

I've had 30 day payment terms going direct before. Besides, what sort of payment terms do we think other, non-IT self employed get ?

They get whatever they are given, that is why you see plumbers going bankrupt when they try to expand or have a poorly paying client, its not something we should encourage in yet another industry.

Every sphere of industry has its 'aggravation clients'. Ask any architect, marketing consultant etc, etc ... and even recruitment agents.

yes but again two wrongs don't make a right.

I would have thought that also depends upon the type of project the client requires external expertise in. Again, if they prefer to be classed as an employer and prefer to pay recruitment fees - they are free to do so.

Historically the two have been intermingled, bums on seats & consultants. This as a way of separating is appalling.

If its Christmas you want now is the time to vote Gobble,Gobble.

[Old Greg]

Probably not.

But since I'm not a temp I couldn't really say...

Oooh, have you got yourself a proper job now? Your gran will be so proud.

[BobTheCrate]

agencies will just charge a monthly management fee.

They can call it what they like - they'd be in the financial chain and so employee condition exists.

pay terms will become 180 days.

I've had 30 day payment terms going direct before. Besides, what sort of payment terms do we think other, non-IT self employed get ?

customers will abuse contractors even more without the steadying influence of agencies

Every sphere of industry has its 'aggravation clients'. Ask any architect, marketing consultant etc, etc ... and even recruitment agents.

Companies will switch to fixed term contracts.

I would have thought that also depends upon the type of project the client requires external expertise in. Again, if they prefer to be classed as an employer and prefer to pay recruitment fees - they are free to do so.

[bobspud]

If the penalties for IR35 evasion were transfered to the agent or the client. The market would soon change and sharpen up and the contractor would be able to see the true intention of the contract they were signing.

For instance: Certain agencies have been found to use sets of contract terms within the agreements for the contractor, that neither they or the end client ever had any intention of honouring within the end contracts. In those cases the agent is complicit in committing fraud, and one could reasonably state that they deliberately missled the contractor and caused the evasion of taxes in the first place. So in those cases the full costs of the investigation should fall to the agency not the contractor.

However where a contractor and the agency could both show that they meant to behave in a manner leaving the contractor outside IR35, but the end clients negligence in the handling of that contractor had changed the status of the contractor, then the costs should be passed to the client instead.

If both the End Client and the Agent have contracts that state that the provider of service will become a controlled employee and the contractor evades IR35 then its clear who owned the blame...

Pretty soon all the sloppy sham contracts would be pulled and amended to reflect the true working relationship...

The deterrent to stop every one being told they are permitemp bitches is to then assign those in controlled roles full employee benefits from day one...

[northernladuk]

agencies will just charge a monthly management fee.
pay terms will become 180 days.
customers will abuse contractors even more without the steadying influence of agencies (yes they may be wideboy illegitimate spivs but agents regularly modify customers expectations)

Companies will switch to fixed term contracts.

Indeed. TBH I think that the culture of getting a contractor in as it is easier than scouring the internal resource pool has already done too much damage. The rise of so many new agents looking for roles on crap specs etc is evidence of this. Company models are starting to lean towards a flexible workforce via agencys which is very dangerous for true contractors. I don't think any small re-wording of contracts or odd schemes are going to change anything now, the horse has already bolted IMO.

[cojak]

Fortunately it is just 'proposed'...