Reply to: Waiting for the Autumn statement?

[Fred Bloggs]

The dividend tax already has that sorted, in that there is scope for it to increase.

Exactly, I give IPSE less than five more years before they're irrelevant.

[Zero Liability]

The closer to full PAYE tax rates get for contractors, the less reason there is for IR35. It follows directly that there will be little or no need for IPSE to exist.

The dividend tax already has that sorted, in that there is scope for it to increase.

[TheFaQQer]

The closer to full PAYE tax rates get for contractors, the less reason there is for IR35. It follows directly that there will be little or no need for IPSE to exist.

On the assumption that IPSE is only there for IR35, yes.

On the assumption that IPSE is there for significantly more than IR35, no.

And I'm more with the second assumption than the first.

[AtW]

Not looking forward to it at all as things will only get worse - now Osborne needs to find more tax money to deal with shortfall as he'd have to stagger tax credits cuts, this would no doubt exclude dividend tax credit cut which would still be immediate next year.

I expect them to neuter Entrepreneurs Relief substantially, or do something to Capital Gains Tax altogether - it wasn't touch in last emergency budget, most likely because they want to do some big changes to it, you know, to make it less "archaic", like all those people getting CGT relief on sale of main house

[Fred Bloggs]

The closer to full PAYE tax rates get for contractors, the less reason there is for IR35. It follows directly that there will be little or no need for IPSE to exist.

[jamesbrown]

or transition to one, if that channel is possible

At the risk of polishing a turd, I think that's going to need some serious polishing. For any contractor whose company has a decent net worth, I can't see HMRC allowing capital distribution in moving to an FLC (it would basically fail the TIS), and I can't see a contractor accepting a dividend distribution or moving the cash to the FLC and accepting an even more punitive environment there (e.g. salary/dividend mix).

[MrMarkyMark]

Cheers bud, interesting insight..

[TheFaQQer]

The thing is we just don't yet know for certain..
I thought it would be similar to a contractor getting their contract reviewed now. Operating criteria could differ, from one contract to another, as working practices do now.

Based on the IPSE model, then the operating criteria are unlikely to change from year to year or contract to contract, so there won't be the need to regularly review the way you work.

You must meet the entry criteria to form an FLC (or transition to one, if that channel is possible), and you must maintain the operating criteria to remain working within one. I would expect that if there was an HMRC investigation then you would have to show how you operated and why you were eligible to be an FLC, but that's just how I personally see it working, not based on anything that I've seen or heard.

What, in your view, would be IPSEs role, in contracting, if this went through?

If FLCs go through, I don't see there being much change. Those members that choose to use one will do so, and it may be that if all they were interested in IPSE membership was for IR35 protection then they may well choose to let their membership lapse. If they were IPSE members for more than the IR35 protection, whether that's the lobbying voice that IPSE has, or the business interruption insurance, or the cheap pension plan, or the savings that can be made from IPSE Advantages, or any other reason then I would expect that they would continue to support the only voice in town for contractors.

And for those members that don't choose to use an FLC, IPSE will continue to provide the range of benefits and protection that they have always offered.

[MrMarkyMark]

From the suggested operating criteria in the final version of the proposal submitted to government, I don't see anything that couldn't / wouldn't be done by companies house or HMRC - but there is nothing in the document which says what kind of ongoing review would be required or who would do it.

I doubt that HMG are going to outsource any possible review service to a third party - in the same way that they don't outsource their contract review service to AbbeyTax or B&C or Qdos.

The thing is we just don't yet know for certain..
I thought it would be similar to a contractor getting their contract reviewed now. Operating criteria could differ, from one contract to another, as working practices do now.

What, in your view, would be IPSEs role, in contracting, if this went through?

As I say, I don't profess to know, all the ins and outs, in as much detail as you.

[TheFaQQer]

If it goes through and you have to have the "operating criteria" reviewed, to remain outside IR35, then wouldn't IPSE be offering this as a paid service?

Or have I missed something

From the suggested operating criteria in the final version of the proposal submitted to government, I don't see anything that couldn't / wouldn't be done by companies house or HMRC - but there is nothing in the document which says what kind of ongoing review would be required or who would do it.

I doubt that HMG are going to outsource any possible review service to a third party - in the same way that they don't outsource their contract review service to AbbeyTax or B&C or Qdos.

[MrMarkyMark]

I'm not sure how an FLC option being available helps further the commercial interests - how do you think it can be used to make money?

If it goes through and you have to have the "operating criteria" reviewed, to remain outside IR35, then wouldn't IPSE be offering this as a paid service?

Or have I missed something

[TheFaQQer]

I'm sure they will find a way, don't you think they will be thinking of one?
Otherwise, why suggest the idea, I doubt its from the bottom of their heart?

If there is a voluntary mechanism which protects some members from HMRC, then would that count as being from the bottom of their heart?

I'm not sure how an FLC option being available helps further the commercial interests - how do you think it can be used to make money?

[mudskipper]

I'm sure they will find a way, don't you think they will be thinking of one?
Otherwise, why suggest the idea, I doubt its from the bottom of their heart?

I'm sure they are considering their role in the future landscape, but I'm still not clear what you think they can gain from the proposal other than the kudos of its success, or the fallout of its failure.

They are a not for profit organisation.

[MrMarkyMark]

then I can't see how IPSE benefit.

I'm sure they will find a way, don't you think they will be thinking of one?
Otherwise, why suggest the idea, I doubt its from the bottom of their heart?

[mudskipper]

Stinks of rolling over and trying to preserve IPSEs commercial interests, within the contracting market.

Whilst I'm not a fan of the idea, I can't see how that stands - if one accepts that a lot of members are there for the insurance, and a FLC means that insurance is not required, then I can't see how IPSE benefit.