OTS Small Company Taxation Review

[jamesbrown]

I didnt realise anyone watched this. Fair play.

More often than I'd care to admit...

[jamesbrown]

Interesting (worth watching), and it is a real problem both for the workers affected, and for the rest of us when any "solution" catches people it was never meant to target. He makes their case well. One of the things the new CRSE will be looking at is the characteristics of a vulnerable (self employed) worker, to assist with that distinction.

Yep, it's easy to forget that from our privileged position. Relatively speaking, you'd think this problem would be easy to tackle, although I haven't thought about it carefully. For example, it should be possible to restrict self-employment (impose employment) when the contracted rate falls below a certain threshold and that income originates (largely) from a single employer. Another option would be to focus on certain industries/jobs where this is common. This is less about restricting legitimate freedoms and more about addressing unscrupulous employers. It should be possible to design something that minimizes the former (without getting into the more complex arguments of what distinguishes employment from self-employment).

[mudskipper]

Watching Parliament TV and caught this Ten minute rule motion from 2 March. Illustrates the continued pressure from the opposite end of the spectrum (i.e. low-paid workers being stiffed by their "employers"). Not a great cocktail.

Interesting (worth watching), and it is a real problem both for the workers affected, and for the rest of us when any "solution" catches people it was never meant to target. He makes their case well. One of the things the new CRSE will be looking at is the characteristics of a vulnerable (self employed) worker, to assist with that distinction.

[SueEllen]

I didnt realise anyone watched this. Fair play.

It's great if you have difficultly sleeping.

[saptastic]

Watching Parliament TV

I didnt realise anyone watched this. Fair play.

[mudskipper]

Write up here

OTS tables sole trader-style reforms for one-person limited companies :: Contractor UK

[jamesbrown]

Watching Parliament TV and caught this Ten minute rule motion from 2 March. Illustrates the continued pressure from the opposite end of the spectrum (i.e. low-paid workers being stiffed by their "employers"). Not a great cocktail.

[mudskipper]

Yes, we can't add complexity through choice. We're too busy adding complexity by compulsion.

I think we have to remember the objective - tax simplification. Introducing something new, without removing anything, might be simpler for those who use it, but is adding complexity to the system as a whole.

[WordIsBond]

though that raises concerns with the OTS about adding complexity through choice

Yes, we can't add complexity through choice. We're too busy adding complexity by compulsion.

[mudskipper]

"1.43 Of all the topics we covered during this review, none were more divisive than look-through.
Respondents were generally either strongly against or strongly in favour; with accountants and
tax advisers generally against, small company owners generally in favour and representative
groups and bodies split between the two camps. One area where virtually all respondents were
in agreement was that if any look-through scheme was introduced, it should not be compulsory,
though that raises concerns with the OTS about adding complexity through choice (and of
course the implication that it could become a ‘lower tax’ choice)."

[flamel]

Tax objectives are continuously being packaged as something far more principled.

so agree with that one that I can't be bothered to read the whole document....yawn. I particularly like that apparently people have Ltd companies for loads of reasons other than tax efficiency - so therefore let's tax the f**k out of them and they won't mind

[jamesbrown]

The Americans have look-through as an option. You can have a chapter C or a chapter S corporation, the latter is look-through.

It is a reasonable approach as an option, definitely helpful in many cases, a bad thing if enforced / required.

Reasonable, in principle, but it won't be optional, in practice, for at least two reasons: 1) it would be introduced, in part, to counter avoidance; and 2) it couldn't represent a simplification unless it was replacing something. Ultimately, if the aim is to replace IR35 or render it moot, this is just an alternative (preferred) implementation of strict deeming criteria (concerning which businesses are in scope, vs. which contracts of those businesses).

TBH, I'm rapidly losing interest in the entire, phoney, discussion. Tax objectives are continuously being packaged as something far more principled.

[WordIsBond]

The Americans have look-through as an option. You can have a chapter C or a chapter S corporation, the latter is look-through.

It is a reasonable approach as an option, definitely helpful in many cases, a bad thing if enforced / required.

[jamesbrown]

Here. Yep, not really surprising, and it isn't a new idea. Indeed, apportionment is a very old idea and something that HMT were supposedly exploring again.

[GB9]

First area of further investigation is recommended as 'look through'.

There's a surprise.