Discussion document on IR35 published

[SimonMac]

I know with every budget we are up in arms saying it's the biggest thread to Contractors ever, but I get a feeling with this one it might actually be the case.

If HMRC are trying to push the responsibility onto the Client, we all know what is going to happen, these are the same Clients that have pushed the responsibility of recruiting onto agents so there is a risk that agencies will start popping up offering the entire solution to Clients which will end up screwing us.

[DaveB]

From the FT - Freelance employees face new scrutiny on tax

My bold.




So HMRC think that 90% of contractors should be caught by the current IR35 but are not because of problems with enforcement.





So they are going to "Fix" the problem by making it someone else's problem. Putting the onus onto the agents and clients to decide whether the contract is IR35 compliant or not.

So many issues with that article, it's basically a regugitation of an HMRC press release.

It misrepresents the purpose of IR35, it convieniantly overlooks the corporation tax component of the tax being paid and grossly oversimplifies the example used.

If even the FT is just brainlessly repeating the HMRC line then we really are stuffed.

[tractor]

.....

awwwe don't close my thread. It's the first one I've created in 10 years.

10 years and you haven't learned that tulip goes in general and anything serious does not?

I would also argue with the premise you made in the OP...

So HMRC think that 90% of contractors should be caught by the current IR35 but are not because of problems with enforcement.

The article says "It estimates that nine out of ten of those who should comply, do not."

The two are not the same thing at all.

Everyone knows that 100% of IR35 doesn't work because they cannot define a real business!

[SimonMac]

awwwe don't close my thread. It's the first one I've created in 10 years.

Be grateful you are now in the professional forums so we can't beat you with your own spleen for not using the search function

[suityou01]

I think if a by product of this is that ClientCos start to differentiate us from temps because this brings the contracting model under the microscope then I'm all for it.

Case in point. A bank I started working at last year tulipcanned me after 4 months for refusing to fill out an annual leave request. The debacle blew up after one of the other contractors rightly kicked up a fuss. He folded and stayed there filling out holiday requests.

Again this was all Human Remains throwing their weight around, and their central argument was that all contractors were under direction and control, and should be bound under the terms of the AWR. This utter cretinism does not stop there, as when I pointed out that AWR workers are entitled to paid annual leave, statutory sickness etc and in fact they were only enforcing the aspects of AWR that suited them.

Now if this legislation meant that the bank had to back date holiday payments for their 100 or so contractors, a healthy percentage of which had been there for over 15 years happily filling in annual leave requests and providing doctors notes etc. if this meant they got walloped for backdated NI payments, and the contractors that so wantonly flouted the rules got brought to book I for one would laugh my not so skinny ass off.

But I'm not bitter

[SueEllen]

Everyone knows that 100% of IR35 doesn't work because they cannot define a real business!

They tried to with the BETs. Though what they defined as a business came out of the 1960s and ignored technological innovations such as the internet.

I've had clients' who don't have "proper" offices in the UK. Everyone works from home unless they have to work on a client site, all workers meet up when required in coffee shops/hotels/bars for face-to-face interaction, and they book meeting rooms as needed for clients, interviews etc.

[Acme Thunderer]

VAT is cost neutral to HMRC

A number of people on this thread (and in other places) keep on counting VAT in how much Tax they contribute. To HMRC it is VAT neutral, if fact we probably cost the HMRC VAT revenue.

If I charge my agent VAT, the agent then just uses that as input into their VAT calculations and reduces their VAT bill accordingly. So HMRC doesn't get anything extra in VAT because of us. For those of use in the FRS we cost the HMRC because I bet a lot of us don't have VAT inputs that are 5.5% of our turnover.

So don't be surprised if the VAT FRS gets canned as well.

[eek]

A number of people on this thread (and in other places) keep on counting VAT in how much Tax they contribute. To HMRC it is VAT neutral, if fact we probably cost the HMRC VAT revenue.

If I charge my agent VAT, the agent then just uses that as input into their VAT calculations and reduces their VAT bill accordingly. So HMRC doesn't get anything extra in VAT because of us. For those of use in the FRS we cost the HMRC because I bet a lot of us don't have VAT inputs that are 5.5% of our turnover.

So don't be surprised if the VAT FRS gets canned as well.

+1. This has always been a pet hate when people quote the high level of tax they pay..

[WordIsBond]

Yeah, VAT doesn't come into it unless you are providing services to the consumer. You aren't generating any revenue for the government with VAT, you are just shifting where it comes from, and maybe skimming a little with FRS.

Look for one man bands to not be able to use FRS before long.

[BolshieBastard]

I know with every budget we are up in arms saying it's the biggest thread to Contractors ever, but I get a feeling with this one it might actually be the case.

If HMRC are trying to push the responsibility onto the Client, we all know what is going to happen, these are the same Clients that have pushed the responsibility of recruiting onto agents so there is a risk that agencies will start popping up offering the entire solution to Clients which will end up screwing us.

KPMG are the latest big co to offer an 'all in one consultancy' service ie from dev to testing.

The writing is on the wall. Its not if but when.