Reply to: Labour Commit to scrapping April 2020 roll out of IR35 reforms to the private sector

[JohntheBike]

That won't necessarily work, though. Please excuse the random tangent, but...

There is a fantasy book series I read called the Wheel of Time. In it, there are "magic" wielders called Aes Sedai. In order to make themselves more trusted in the world they take magically-binding oaths, one of which is to "speak no word which is untrue".

All that happened was that they became very good at phrasing things such that it appeared they were saying something, when they were not. This led to the phrase "the truth an Aes Sedai tells is not always the truth you thought you heard".

Back to the point: This is all such a law would do. Politicians are already difficult to pin down on things. They would just learn to phrase things in such a way that they were not lying, but they were also not telling the truth, and this would make everyone's life even more difficult.

They would just learn to phrase things in such a way that they were not lying, but they were also not telling the truth,

they already do! so nothing to learn!

[drmouse]

make it a criminal offence for them to lie to the public

That won't necessarily work, though. Please excuse the random tangent, but...

There is a fantasy book series I read called the Wheel of Time. In it, there are "magic" wielders called Aes Sedai. In order to make themselves more trusted in the world they take magically-binding oaths, one of which is to "speak no word which is untrue".

All that happened was that they became very good at phrasing things such that it appeared they were saying something, when they were not. This led to the phrase "the truth an Aes Sedai tells is not always the truth you thought you heard".

Back to the point: This is all such a law would do. Politicians are already difficult to pin down on things. They would just learn to phrase things in such a way that they were not lying, but they were also not telling the truth, and this would make everyone's life even more difficult.

[sal]

If you go by the transcript, it's just weasel words and no actual commitment

Rachel Burden (Radio 5 Live): “So, just for absolutely clarity, under a Labour Government, this would not apply in the private sector from April 2020.”

Rebecca Long-Bailey (Labour): “Well, certainly we don't think it will, no, but we need to have a system in place that is fair.”

They don't think it will apply on April 2020. Didn't say that it will not apply

I liked what Adam Price had to say in last weeks BBCQT about lying politicians. He wants to make it a criminal offence for them to lie to the public. Of course these turkeys will never vote for x-mas, but one could hope.

[WordIsBond]

All change!

Dave Chaplin on LinkedIn: OFF-PAYROLL - LABOUR POLICY LEAK: They appear to now support the Off-Payroll

What a shocking surprise.

Perhaps they'll be moderated slightly if they need the Lib Dems. The SNP is pretty much as Marxist as Labour. They already have higher taxes than the rest of the UK, they only reason it hasn't gone higher still is because they are afraid that all their biggest taxpayers will move south across the border. If Corbyn comes in and hikes taxes then they can do the same, and will.

They aren't bothered about the antisemitism in Labour because they've been tolerating it behind the scenes in the SNP, too. Both parties have catered to the hard left and the hard left is rife with it.

[BolshieBastard]

What!? Some people think a couple of old commies, will repeal some legislation enacted by what they call 'tories with red ties' designed to maximise the tax take from so called dodgers?

Really? No wonder corbyn and his acolytes are turning the polls with their freebie this, freebie that, freebie the other while soaking the top 5% wealth creators!

[Nazaire99]

It's not just about tax percentages though...

I've already seen a large increase in FTC's being advertised at pretty bog standard permie rates which it's not financially viable for me to do. Then there's the contracts that are deemed inside IR35 where by I can't put these through my accounts for my accountant to work his magic on, I'm still incurring all of the costs of being a contractor but would have to show a loss in my accounts every year, eventually leading to bankruptcy.

The legislation is not even in force yet and I already see that the job market is now split 3 ways Inside/Outside/FTC... I can only see the current setup of reforms leading to Outside being heavily squeezed.

Looks like Comrade Corbyn is not scrapping it now anyways... so I can revert to "Getting Brexit Done"

Contract/FTC rates are low because the market is bad. I've taken an FTC for the time being - perhaps the market in six months will be better? Anyway, why would working permie or on an FTC force you into bankruptcy? The vast majority of the population manage.

I think that even if Corbyn abolished IR35 there would be so many knock on impacts of his policies elsewhere that you would be worse off. Not to mention him being an unreformed Marxist, anti-semite and proven terrorist supporter. Perhaps some things are worth more than the (very doubtful) prospect of a few extra quid in your pocket?

[iainb]

It's not just about tax percentages though...

I've already seen a large increase in FTC's being advertised at pretty bog standard permie rates which it's not financially viable for me to do. Then there's the contracts that are deemed inside IR35 where by I can't put these through my accounts for my accountant to work his magic on, I'm still incurring all of the costs of being a contractor but would have to show a loss in my accounts every year, eventually leading to bankruptcy.

The legislation is not even in force yet and I already see that the job market is now split 3 ways Inside/Outside/FTC... I can only see the current setup of reforms leading to Outside being heavily squeezed.

Looks like Comrade Corbyn is not scrapping it now anyways... so I can revert to "Getting Brexit Done"

[SimonMac]

All change!

Dave Chaplin on LinkedIn: OFF-PAYROLL - LABOUR POLICY LEAK: They appear to now support the Off-Payroll

[Nazaire99]

This still cracks me up. Have you actually listened to Corbyn on anti-Semitism or the NHS, or Sturgeon on governing the country (ours, not hers) or Swinson on just about anything?

And in any likely non-Tory coalition SNP and the moderates will not control Momentum-led Labour in any meaningful way, the former because she wants Labour to giver her stuff in return and the rest because they're just too weak.

The idea that McCorbyn and their gang of extremists can be reigned in with a coalition is ludicrous. The SNP would be more than happy with a Labour government causing chaos because it would make their own mismanagement look competent and independence a sane option.

I can't think of many reasons to vote for a Jew hating, terrorist loving Marxist but (back on subject) favourable tax treatment isn't even on the list. Their IR35 policy is for a review not retraction. Their effective dividend tax rates are extremely high (see calculations above). Plus capital gains will align with income. So if you are winding your company up you will be charged at your effective marginal rate (so 50% if you have retained few years earnings).

So if people are naive to fall for Labour based on tax savings they will get a rude awakening. If they vote for that cesspit of extremism then they will really get what they deserve.

[Nazaire99]

This still cracks me up. Have you actually listened to Corbyn on anti-Semitism or the NHS, or Sturgeon on governing the country (ours, not hers) or Swinson on just about anything?

And in any likely non-Tory coalition SNP and the moderates will not control Momentum-led Labour in any meaningful way, the former because she wants Labour to giver her stuff in return and the rest because they're just too weak.

The idea that McCorbyn and their gang of extremists can be reigned in with a coalition is ludicrous. The SNP would be more than happy with a Labour government causing chaos because it would make their own mismanagement look competent and independence a sane option.

I can't think of many reasons to vote for a Jew hating, terrorist loving Marxist but (back on subject) favourable tax treatment isn't even on the list. Their IR35 policy is for a review not retraction. Their effective dividend tax rates are extremely high (see calculations above). Plus capital gains will align with income. So if you are winding your company up you will be charged at your effective marginal rate (so 50% if you have retained few years earnings).

If you are naive to fall for Labour based on tax, you will get a rude awakening. But if you vote for that cesspit of extremism you will really get what you deserve.

[malvolio]

Another thing which I keep having to point out to people: Labour are highly unlikely to gain a majority themselves. If they were to form a government, they'd need the support of more moderate parties, and would most likely have to abandon or moderate their more extreme proposals.

There is not one manifesto you can take as read: the Tories because they're led by a proven liar who will change his mind whenever he feels like it, and the others because they will not get a majority.

This still cracks me up. Have you actually listened to Corbyn on anti-Semitism or the NHS, or Sturgeon on governing the country (ours, not hers) or Swinson on just about anything?

And in any likely non-Tory coalition SNP and the moderates will not control Momentum-led Labour in any meaningful way, the former because she wants Labour to giver her stuff in return and the rest because they're just too weak.

[drmouse]

Another thing which I keep having to point out to people: Labour are highly unlikely to gain a majority themselves. If they were to form a government, they'd need the support of more moderate parties, and would most likely have to abandon or moderate their more extreme proposals.

There is not one manifesto you can take as read: the Tories because they're led by a proven liar who will change his mind whenever he feels like it, and the others because they will not get a majority.

[malvolio]

Changing the tax on dividends will have two major consequences: a lot of very rich people will simply bugger off to another country, and a lot of retired people will see their income slashed significantly. Divis are not just a way of taking money out of YourCo, they are a fundamental element of how big business works - including all those pension funds that some people here seem to think are isolated from any taxation changes. Don't forget the reason most pension funds are already struggling and final salary schemes have vanished is because Brown removed tax relief on dividends for pension funds.

Mind you, signs are that Labour aren't going to be in Government and Grandpa Corbyn will be gone before the year is out and replaced with someone a little less user friendly.

[Nazaire99]

Don't be so gullible (unless your post is intentionally sarcastic, in which case I apologise).

Read up on what Labour are actually planning. It will soon become clear that IR35 will become irrelevant due to the tax changes they will force onto companies. The headline of this thread is misleading.

Absolutely agree. Even if Labour abolished IR35 changes to dividend taxation would apart from certain limited circumstances almost completely negate its benefit. I've worked out effective rates of tax, PAYE vs dividends for small companies below. It is important to note that under Labour's plan dividends are taxed twice, once as profit at 21% (that is the small company rate, the large company rate will be 26%) then under self assessment as income.

The effective rates of PAYE under Labours proposals are as follows:
1) Basic Rate (12.5-50k) @ 20%: 40.25% (being for each £100 extra salary, £20 tax, £12 employees NI (EeNI) and £13.80 Employers NI (ErNI), so £68 is taken home out of £113.80).
2) Higher rate (50-80K) @ 40%: 49.03%
3) Additional rate (80-100K) @ 45% : 53.43%
3) "Hidden rate" (100-125k) @ 67.5% : 73.20%
4) Top rate (125K+) @ 50% : 57.82%

EeNI is 12% for basic rate and 2% thereafter. ErNI is 13.8% on all bands

The effective rates of dividend taxation under Labours proposal (taking 100 of profit which is taxed at Corporation Tax rate of 21% then the remainder subject to income tax) are as follows:
1) Basic Rate (12.5-50k) @ 20%: 36.8% (being 100 taxed at 21%, remainder 79 which is taxed at 20%, leaving 63.2, a rate of 36.8%)
2) Higher rate (50-80K) @ 40%: 52.60%
3) Additional rate (80-100K) @ 45% : 56.55%
3) "Hidden rate" (100-125k) @ 67.5% :74.33%
4) Top rate (125K+) @ 50% : 60.5%

There is still a small saving splitting dividends if you have a non working spouse and stick to the basic rate but apart from that the increases in dividend tax are swinging. And dont forget that under Labour a whole raft of other taxes from fuel to council tax will soar.

[ChimpMaster]

Although this is the Brexit election, if you're a Tory, or the NHS election, if you're a communist ... The one issue that directly effects me personally is the new IR35 legislation. So I was very surprised to hear on the radio the other morning that it was actually being discussed as an issue. As far as I understand things Labour are going to scrap it and everybody else is going to review it.

I'm in a bit of a dilemma now as I was going to vote Tory to, rightly or wrongly, "Get Brexit Done", but now I hear that Comrade Corbyn Neutral is going to scrap IR35 which as a single issue is a massive and possibly overriding vote winner for me.

I'm all of a dither

Don't be so gullible (unless your post is intentionally sarcastic, in which case I apologise).

Read up on what Labour are actually planning. It will soon become clear that IR35 will become irrelevant due to the tax changes they will force onto companies. The headline of this thread is misleading.