Reply to: SDC proposals leaked?

[MarkT]

that makes is all so much better....!

[LisaContractorUmbrella]

If we kept T&S and were able to shift salaries (as there are no dividends) then it probably wouldn't kill me. My wife doesn't work as we have three kids, 2 of which have autism, so the killer will be not using her tax rate anymore, well on top of everything else of course.

I am dreading the 24th, hopefully any changes beyond T&S won't take place until tax year 17/18 though....?

The 25th

[MarkT]

If we kept T&S and were able to shift salaries (as there are no dividends) then it probably wouldn't kill me. My wife doesn't work as we have three kids, 2 of which have autism, so the killer will be not using her tax rate anymore, well on top of everything else of course.

I am dreading the 24th, hopefully any changes beyond T&S won't take place until tax year 17/18 though....?

[LisaContractorUmbrella]

So this scenario wouldn't necessarily mean the end for contracting, it'd mean we are all caught by IR35. But would we still then keep out T&S? It'd make a huge difference if we were.

Of course things like income shifting etc would end. There'd be no way around shifting dividends, or salaries.

No, I genuinely don't think this is the end for contracting because there is a demand for contractors and that demand is growing. I can't read politicians minds (something I shall be eternally grateful for ) but it may be that the vast majority inside IR35 would be a reasonable trade off for keeping T&S. I think it's more likely that the test of supervision, direction and control will be applied across the sector as a whole and we'll go from there - so T&S and IR35 will both depend on SDC

[MarkT]

Then I shall carry my 'chick' title with pride for a while anyway.......

I think the intention will be to pass responsibility for determination to the end client - if SDC is used in the future for IR35, they would really be the only ones to make the call - how can an agency or umbrella company decide whether or not the end client will be retaining the right of SDC? Doesn't make sense and HMRC obviously want the determination moved from the contractor so that would IMHO be logical. I assume that the end client would sign a statement one way or another by putting a tick in an agency form and then a line would be added to the agency reporting requirements which would notify HMRC of the contractor's status; then liability would lie with the end client if they falsified the statement or with the agency if they didn't take the statement or ignored it and with the contractor if they ignored it

So this scenario wouldn't necessarily mean the end for contracting, it'd mean we are all caught by IR35. But would we still then keep out T&S? It'd make a huge difference if we were.

Of course things like income shifting etc would end. There'd be no way around shifting dividends, or salaries.

[WordIsBond]

I am fairly sure that you cannot indemnify or insure against a tax debt so, if the contractor declares no SDC and offers clientco some sort of indemnity but the liability for status determination and therefore the potential tax debt lies with the client, it won't be worth anything.

Somebody tell QDOS you can't insure against a tax debt. TLC35, I think they call it.

I don't know how it works, but presumably the contractor is the beneficiary and it pays out to him if he gets hit with an IR35 tax bill. I don't see any reason that the engager couldn't be made the beneficiary instead, if legislation put the engager on the hook.

No engager would accept indemnification from the contractor (too easy for contractor Ltd to fold), but I could see them accepting an insurance policy to cover their liability.

Cost of the insurance could become a point of negotiation between contractor and client.

[LisaContractorUmbrella]

Anyone under 50 is a chick in my book.

I think you were correct in one of your earlier posts. The most likely outcome I can see is something contractual between agent and contractor stating that the contractor will pay themselves paye. The agent would then report to hmrc.That would be the least disruptive whilst raising most tax.

Can't see contractors on client books for a whole host of reasons. And most likely not on agency books either. Anything like that would result in lots of ftc and employed consultant roles springing up. Clients would soon get peed off with the outcome.

Then I shall carry my 'chick' title with pride for a while anyway.......

I think the intention will be to pass responsibility for determination to the end client - if SDC is used in the future for IR35, they would really be the only ones to make the call - how can an agency or umbrella company decide whether or not the end client will be retaining the right of SDC? Doesn't make sense and HMRC obviously want the determination moved from the contractor so that would IMHO be logical. I assume that the end client would sign a statement one way or another by putting a tick in an agency form and then a line would be added to the agency reporting requirements which would notify HMRC of the contractor's status; then liability would lie with the end client if they falsified the statement or with the agency if they didn't take the statement or ignored it and with the contractor if they ignored it

[GB9]

Poor Salma Hayek. Loses her chickness in 9 months

I can make exceptions as necessary

[northernladuk]

Anyone under 50 is a chick in my book.
.

Poor Salma Hayek. Loses her chickness in 9 months

[GB9]

That makes me feel quite young - I don't know why

Anyone under 50 is a chick in my book.

I think you were correct in one of your earlier posts. The most likely outcome I can see is something contractual between agent and contractor stating that the contractor will pay themselves paye. The agent would then report to hmrc.That would be the least disruptive whilst raising most tax.

Can't see contractors on client books for a whole host of reasons. And most likely not on agency books either. Anything like that would result in lots of ftc and employed consultant roles springing up. Clients would soon get peed off with the outcome.

[pjt]

Looks like it really is the end of the world as we know it....

APSCo blasts

Am I missing something? I don't see anything new here.

[LisaContractorUmbrella]

Me neither....

Harsh

[northernladuk]

That makes me feel quite young - I don't know why

Me neither....

[LisaContractorUmbrella]

Okay - so what's to stop us signing a waiver to say we will bear responsibility for any tax incurred and will declare as outside of SDC? How would the test be proven? Surely large companies will defend any decision they take and everyone is happy?
We get our reward for our risk
They get a happy flexible, off the books workforce
HMRC get CT @20% and PAYE on the rest.

Any time limit seems slightly arbitrary though.....

And I say again - what's a PSC? Define please?

If this all does go ahead and it's a big if - it will all depend where the decision sits to determine SDC and where the liability sits if the wrong decision is made. I am fairly sure that you cannot indemnify or insure against a tax debt so, if the contractor declares no SDC and offers clientco some sort of indemnity but the liability for status determination and therefore the potential tax debt lies with the client, it won't be worth anything.

[LisaContractorUmbrella]

Chick?? Lol I can't wait for her to see this. Now where is my popcorn. Are we all sitting comfortably..

I feel like one of the gang now