Reply to: Private sector EDM

[JohntheBike]

She is correct.

naturally, but she only explained this to me after I'd asked her twice to support the EDM.

[mudskipper]

I received a letter recently from Ms. Christina Rees, who is the shadow Welsh Secretary. She explains that members of the cabinet and their shadows are not allowed to sign EDM's. It's interesting to note the support from Labour MP's for this EDM.

She is correct.

[JohntheBike]

IR35 OFF-PAYROLL TAX EXTENSION TO PRIVATE SECTOR - Early Day Motions

Encourage your MP to support the EDM.

I received a letter recently from Ms. Christina Rees, who is the shadow Welsh Secretary. She explains that members of the cabinet and their shadows are not allowed to sign EDM's. It's interesting to note the support from Labour MP's for this EDM.

[jamesbrown]

I hope you are right.

However we already see contracts where the liability ends with the individual and any push back on them saying "no thanks and might even be illegal" is met with "do you want the gig or not?".

But that’s a completely separate thing. Contracts can say anything, but they cannot override statute. Here, we’re talking about what the revised ch 10 of the ITEPA is going to say, not what a contract says. It is already very common for contracts to try to “shift” liability. Whether those clauses are enforceable is another matter, but that doesn’t change the liability on the fee payer and, potentially, the client to HMG, which they will need to deal with separately from, and in advance of, any contract litigation. We’re also talking about large clients here, not small ones, who will be exempt, initially, so they will be wise to risk and how to mitigate risk.

[webberg]

Not too cynical, but it makes no sense. We’ll see what the liability clauses look like around 11 July, but the suggestion so far is that liability could move to the client (and starts there if they are the fee payer), but not the contractor or ContractorCo. Anyway, given the potential to shift liability to the client in some cases, clients are not going to sit back and passively accept a chain with such shenanigans going on. Indeed, this is why the liability will likely move to clients only, because they are in a position of power w/r to fee payers.

I hope you are right.

However we already see contracts where the liability ends with the individual and any push back on them saying "no thanks and might even be illegal" is met with "do you want the gig or not?".

[jamesbrown]

Is that too cynical?

Not too cynical, but it makes no sense. We’ll see what the liability clauses look like around 11 July, but the suggestion so far is that liability could move to the client (and starts there if they are the fee payer), but not the contractor or ContractorCo. Anyway, given the potential to shift liability to the client in some cases, clients are not going to sit back and passively accept a chain with such shenanigans going on. Indeed, this is why the liability will likely move to clients only, because they are in a position of power w/r to fee payers.

[NeedTheSunshine]

Insurance to employers is not really what is needed - it's insurance to fee payers, i.e. those closest to the contractor. In the event that the decision on IR35 is "wrong" and more tax is due, they are HMRC's first port of call.

True, they will seek to lay off said risk to end clients (not very much) and individuals (almost all of it) but that is where the trail starts.

In effect if an individual is investigated and found to have avoided tax, then the fee payer pays and has to chase the individual. In effect therefore, doing HMRC's debt collection for them.

I would not be at all surprised to see fee payers being set up as £1 companies, sending all their income as a royalty to an offshore base and when HMRC come knocking, it's thank you and good night, leaving individual and end client exposed.

Is that too cynical?

That sounds depressingly likely.

[webberg]

Insurance to employers is not really what is needed - it's insurance to fee payers, i.e. those closest to the contractor. In the event that the decision on IR35 is "wrong" and more tax is due, they are HMRC's first port of call.

True, they will seek to lay off said risk to end clients (not very much) and individuals (almost all of it) but that is where the trail starts.

In effect if an individual is investigated and found to have avoided tax, then the fee payer pays and has to chase the individual. In effect therefore, doing HMRC's debt collection for them.

I would not be at all surprised to see fee payers being set up as £1 companies, sending all their income as a royalty to an offshore base and when HMRC come knocking, it's thank you and good night, leaving individual and end client exposed.

Is that too cynical?

[BrilloPad]

Whatever happened to that trade association mob; you know, the one's that were campaigning for maternity pay and beard oil whilst the Government pissed on our chips?

Do you mean IPSE?

Well they did a great job with Arctic. Maybe, like QDOS, they will starting offering insurance to employers?

[NeedTheSunshine]

Whatever happened to that trade association mob; you know, the one's that were campaigning for maternity pay and beard oil whilst the Government pissed on our chips?

Not sure which trade association you are referring to, but are they the ones that aren't on this https://www.hmrcloancharge.info/wp-c...ing_Sector.pdf ?

[wattaj]

One of the problems is that contractors by nature don't tend to come together as a group - it's one of the attractions of contracting.

Whatever happened to that trade association mob; you know, the one's that were campaigning for maternity pay and beard oil whilst the Government pissed on our chips?

[NeedTheSunshine]

I really don't think there is the will out there to go this far now. When IR35 was first challenged by a JR, the necessary funds were gathered in a very short time. But being cynical, the legal people should have been able to advise that there was no prospect of the JR being successful, which turned out to be the case.

It's a shame really. The only alternative is to accept it and move on. It's not going to go away. Way too much perceived lost money for the Treasury and contractors are low hanging fruit. Public sympathy won't be on the side of contractors either.

One of the problems is that contractors by nature don't tend to come together as a group - it's one of the attractions of contracting.

[NeedTheSunshine]

I am permanent. Why should I care?

I don't care either. I have absolutely zero intention of joining any group doing anything about IR35. Because I got out of that game a while ago and I'm selfish. It's been clear for years that HMRC don't like contractors. It was inevitable that the public sector off payroll rules were going to be rolled out to the private sector. I don't think it could have been any clearer.

However, for those that do care, and anybody still contracting should care, then they were my thoughts.

[JohntheBike]

You need around £1 million to go all the way. You need to allow 6 years for the average JR.

Given the number of contractors affected by this issue, you should be able to count on a minimum of 1000 in the group.

You need to get on with this soon. QC needs to be chosen, arguments picked, etc. This takes time. If you wait too long then the window of opportunity will be gone before you know it.

I really don't think there is the will out there to go this far now. When IR35 was first challenged by a JR, the necessary funds were gathered in a very short time. But being cynical, the legal people should have been able to advise that there was no prospect of the JR being successful, which turned out to be the case.

[BrilloPad]

You need around £1 million to go all the way. You need to allow 6 years for the average JR.

Given the number of contractors affected by this issue, you should be able to count on a minimum of 1000 in the group.

You need to get on with this soon. QC needs to be chosen, arguments picked, etc. This takes time. If you wait too long then the window of opportunity will be gone before you know it.

I am permanent. Why should I care?