Reply to: Worth one last final try?

[JohntheBike]

No. The law gives clients strong incentives to implement it in exactly the way that they have.

Declare people outside? Potential tax liability.

Declare people inside? Potential employment tribunal liability.

Stop hiring PSCs? No potential liability. Just harder, at least for a while, to get projects done, until contractors get hungry and are willing to go umbrella or FTC.

In almost every case, the third option will be more appealing to clients.

Declare people outside? Potential tax liability.

agreed.

Declare people inside? Potential employment tribunal liability.

agreed

Stop hiring PSCs? No potential liability.

agreed, and even I didn't see that coming!

it will be interesting though how HMRC will defend their assertion that genuinely self employed contractors will not be affected by the change in regulations. Clearly, clients have already demonstrated that this is not the case. However, HMRC are so intransigent, that they will stick their heads in the sand and ignore all contrary evidence or lie about the situation. How interested MP's are taking what Jesse dishes out without seriously challenging him, beggars belief.

I really can't see that option 3 will change much, unless there are severe repercussions in the market place, or there is some clever challenge to that position.

[JohntheBike]

In that case, you haven't been paying attention. I said it here, and you commented right after that.

I'm of the view it violates the ECHR 6.1. Perhaps someone like IPSE could challenge it on that basis, if they aren't too busy pointlessly lobbying someone or other.

In that case, you haven't been paying attention.

sorry, I am getting a little forgetful. It comes with old age.

if they aren't too busy pointlessly lobbying someone or other

isn't that what they've been doing all along?

[WordIsBond]

To be fair, the law doesn't need to change, just the clients' implementation of such.

No. The law gives clients strong incentives to implement it in exactly the way that they have.

Declare people outside? Potential tax liability.

Declare people inside? Potential employment tribunal liability.

Stop hiring PSCs? No potential liability. Just harder, at least for a while, to get projects done, until contractors get hungry and are willing to go umbrella or FTC.

In almost every case, the third option will be more appealing to clients.

[WordIsBond]

and I thought I was the only one who believed that. Remember the FTT used to be called the "Commissioners for Taxes", or similar, and were always biased in my opinion.

In that case, you haven't been paying attention. I said it here, and you commented right after that.

I'm of the view it violates the ECHR 6.1. Perhaps someone like IPSE could challenge it on that basis, if they aren't too busy pointlessly lobbying someone or other.

[DevUK]

It is much more than just a shift in liability. It means that a biased party is determining your tax burden. It means that they make that determination not based merely on the justice of the matter but on their own concerns. The person/company that determines your tax liability is threatened by the power of the state if they decide on a lower rather than higher number.

In short, it's a violation of due process, placing contractors before a biased tax tribunal.

That's fair enough, you make a good point.

[Lockhouse]

I'll be there on Wednesday. If you can go, why on Earth wouldn't you?

[unixman]

Had a call last week from an old friend who works for a certain Chinese tech company. He isn't a contractor but was looking for IR35 advice. Basically, they are faced with making a tax determination on contractors, and they don't know what to do. Discussions are being held now. I put the contractors' case. He considered that and said changing the tax status of contractors would reduce their income, so the Company would have to pay more, to which I could only agree.

Generally, the new rules might or might not increase the tax take. Companies will be faced with paying more to get the contractors they need, or messing around making individual determinations, or risking tax investigation. The interim chaos and fear will damage and retard projects, just at the time Britain needs to take them forward (cf. Brexit).

Personally, I don't mind going back to Umbrella. I don't see it as a big financial hit anyway, what with the expense of running a Ltd. Ultimately, somebody has to provide temporary expertise for things like HS2, 5G and the rest of it, and the temporary experts are not going to take a risk if there is no reward to go with it.

[JohntheBike]

To be fair, the law doesn't need to change, just the clients' implementation of such.

If in time it can be seen that contractors and clients alike can go to court against the HMRC, and win, then the HMRC in this case will be seen to be utterly inept in their implementation of this law. And it will be a case study of over 20 years, bless 'em.

can go to court against the HMRC,

the trick will be to go to court when HMRC have no say in the issue.

[JohntheBike]

It is much more than just a shift in liability. It means that a biased party is determining your tax burden. It means that they make that determination not based merely on the justice of the matter but on their own concerns. The person/company that determines your tax liability is threatened by the power of the state if they decide on a lower rather than higher number.

In short, it's a violation of due process, placing contractors before a biased tax tribunal.

placing contractors before a biased tax tribunal

and I thought I was the only one who believed that. Remember the FTT used to be called the "Commissioners for Taxes", or similar, and were always biased in my opinion.

[messymess]

It isn't law yet, it's in draft. It's implementation can be delayed, repealed or modified substantially prior to April.

Governments rarely throw things out but they often water them down to the extent that they have a much lower impact. I can think of a lot of companies that would turn on a dime to get contractors back in on projects if this were to happen.

Brexit + Coronavirus + IR35 is going to smack the economy quite hard in one quarter.

this!

[TwoWolves]

It isn't law yet, it's in draft. It's implementation can be delayed, repealed or modified substantially prior to April.

Governments rarely throw things out but they often water them down to the extent that they have a much lower impact. I can think of a lot of companies that would turn on a dime to get contractors back in on projects if this were to happen.

Brexit + Coronavirus + IR35 is going to smack the economy quite hard in one quarter.

[simes]

Clients are not going to change their minds unless the law is changed.

To be fair, the law doesn't need to change, just the clients' implementation of such.

If in time it can be seen that contractors and clients alike can go to court against the HMRC, and win, then the HMRC in this case will be seen to be utterly inept in their implementation of this law. And it will be a case study of over 20 years, bless 'em.

[northernladuk]

I'll be there and I think its worth every penny if the message goes across before new budget comes out.

What will make the message go out now when it hasn't before?

[messymess]

You can't change the clients. You can only influence the politicians to change the law. I do agree that it's probably too late now. Action should have been taken a while back.

I don't blame the clients for minimising risk. That is exactly what the IR35 liability shift change was meant to do. Basically shaft contractors.

I'll be there and I think its worth every penny if the message goes across before new budget comes out.

[WordIsBond]

By the way, I'm open to being told I'm wrong here if I'm missing some detail of the reform that makes it much more than just a shift in liability. My point is that the clients are the problem, beyond the obvious issues with IR35 that's been around for ages.

It is much more than just a shift in liability. It means that a biased party is determining your tax burden. It means that they make that determination not based merely on the justice of the matter but on their own concerns. The person/company that determines your tax liability is threatened by the power of the state if they decide on a lower rather than higher number.

In short, it's a violation of due process, placing contractors before a biased tax tribunal.