Reply to: HMRC want to hear from us

[WordIsBond]

I think the suggestion to align employment and tax status could be a positive - a client will have to think about whether they want an employee or a B2B relationship, and structure the contract and working practices accordingly. At the moment it could be argued that we get the worst of both worlds if IR35 caught. But as always, the devil will be in the detail - the flip side is that it could result in a big rise in FTCs.

I agree. Finally read the report, and to me if this is implemented it is hugely significant.

It is not only important for client behaviour. The ramifications if you lose an IR35 case would be very, very different. Losing an IR35 case now means your tax status is employed and your employment status is self-employed. It's horrible.

If these are aligned, then you would get employment rights, and the client should be liable for the employers NI, if you lose an IR35 case. That means not only will clients be motivated to adopt IR35 proof contracts and practices, they will also be motivated to fight IR35 cases, rather than saying whatever might come to mind when Hector comes calling. And if you lose, it costs a lot less because the client is sharing the burden.

[jamesbrown]

@Jamesbrown the report actually said in it the self-employed are a varied group from farmers to taxi drivers plus freelancers and contractors.

Even in IT there are contractors and freelancers. It depends what specific service you need as a larger business who you hire.

Yes, the report acknowledges this, but doesn't engage with it in any meaningful way. Some level of generalisation is always required, but I think it needs to be taken down a level to engage with categories of self-employed worker (because the conclusions will be profoundly different), while also covering taxation at a high level.

[mudskipper]

Even in IT there are contractors and freelancers.

One of the problems is terminology - I'll happily describe myself as a contractor or a freelancer. Others see freelancers as 'creative' and contractors as BoS. The terms themselves mean different things to different people. Many non IT folk associate contractor with building trades - which probably explains all the CUK visitors asking about their loft extension.

[SueEllen]

@Jamesbrown the report actually said in it the self-employed are a varied group from farmers to taxi drivers plus freelancers and contractors.

Even in IT there are contractors and freelancers. It depends what specific service you need as a larger business who you hire.

[mudskipper]

Thanks. There are a few interesting points, but I can't see much that hasn't been said before. To my mind, it was neither sufficiently broad nor sufficiently detailed, which may sound like an unrealistic criticism, but the scoping was wrong. It needed to include taxation, for example, and it needed to drill down in a sector-specific way, at least to some degree, as the picture changes dramatically depending on the sector and motivations behind self-employment. For this reason, generalisations about levelling the playing field on employee-type benefits are completely flawed in my view and, I dare say, focused on those individuals that feel much more precarious in their self-employment.

Perhaps one thing we can unite on is for gov't to stop ******* around with legislation every five minutes, but these reviews and consultations contribute to the problem as much as the solution. As with the NHS, everyone has ideas, but what's needed is a period of no ideas. For example, calls for simplicity w/r to tax and employment law provide a cover for raising revenue as much providing certainty. Not sure about the rest of you, but I can live with uncertainty (isn't that the point for many of us?), providing the game isn't changed every ******* minute.

I agree that the scope is broad and there isn't a one size fits all answer. The most encouraging thing for me was the reinforcement that we're working independently because we want to be - this is a message that needs to come across loud and clear; most are not vulnerable workers that need protection.

[jamesbrown]

The report is out.

Thanks. There are a few interesting points, but I can't see much that hasn't been said before. To my mind, it was neither sufficiently broad nor sufficiently detailed, which may sound like an unrealistic criticism, but the scoping was wrong. It needed to include taxation, for example, and it needed to drill down in a sector-specific way, at least to some degree, as the picture changes dramatically depending on the sector and motivations behind self-employment. For this reason, generalisations about levelling the playing field on employee-type benefits are completely flawed in my view and, I dare say, focused on those individuals that feel much more precarious in their self-employment.

Perhaps one thing we can unite on is for gov't to stop ******* around with legislation every five minutes, but these reviews and consultations contribute to the problem as much as the solution. As with the NHS, everyone has ideas, but what's needed is a period of no ideas. For example, calls for simplicity w/r to tax and employment law provide a cover for raising revenue as much providing certainty. Not sure about the rest of you, but I can live with uncertainty (isn't that the point for many of us?), providing the game isn't changed every ******* minute.

[mudskipper]

So is the direction of travel we lose some tax breaks but gain in other areas such as maternity/paternity?

I don't see it like that. Maternity pay is an issue for the self employed, less so for contractors as our entitlement is the same as any other employee - in practice if we're taking a low salary, we ain't gonna get much, but that's how we choose to operate.

I think the suggestion to align employment and tax status could be a positive - a client will have to think about whether they want an employee or a B2B relationship, and structure the contract and working practices accordingly. At the moment it could be argued that we get the worst of both worlds if IR35 caught. But as always, the devil will be in the detail - the flip side is that it could result in a big rise in FTCs.

[SussexSeagull]

Nope.

They need to define who is self-employed first.

Possibly best not too hold our breaths then.

[SueEllen]

So is the direction of travel we lose some tax breaks but gain in other areas such as maternity/paternity?

Nope.

They need to define who is self-employed first.

[SussexSeagull]

So is the direction of travel we lose some tax breaks but gain in other areas such as maternity/paternity?

[mudskipper]

The report is out.

Summary here

Cambridge Satchel Company boss warns David Cameron self-employed feel like 'second-class citizens'

Original here

https://www.gov.uk/government/public...loyment-review


Some interesting points -

"Clarity on the description of 'self-employed' to take into account the wide variety of individuals and sectors that it applies to with a single definition for tax and employment law"

"Currently an Impact Assessment is carried out to calculate the impact that new policies will have on different sectors. Self-employment is not one of these sectors and it should be."

It also emphasises that most work for themselves because they want to, and do so for independence, flexibility and control of their own future, and not because they can't find a "proper" job.

[BoredBloke]

Is there a way of getting this link made more visible on ContractorUK? Could it go on the front page?

[Pondlife]

I feel better now I've had a bit of a rant.

[Yorkie62]

That is pretty much my response to every question phrased appropriately according to the actual question. If we want to be heard on this issue then we need to complete these surverys rather than just moan about it on forums like this. There is one specific question in the survey that deals with disguised employment and a nice big free text box for you to say exactly what you think.

[javadude]

I got this a few weeks ago. My answers could be summarised as "you can help us by stop trying to wipe us from the face of the earth".