Freelance Limited Company (FLC) offering from IPSE

[eek]

Just dug up the ots report from ir35. It rejected end clients doing anything as it would be too much work and probably have unintended consequences.

Ho hum. I need to go and spend some time reading up on uber and other sharing economies as the iPse is right - that is where the world is moving to and that is going to be where the real problems appear

[LisaContractorUmbrella]

Is about the low-end of the market as shown on the BBC 4 podcast (like M&S outsourcing to DHL that in turn uses agency workers that in turn use umbrellas ou Ltds although M&S retains SDC).
BBC Radio 4 - The New Workplace, Who Do I Really Work For?

My 2p.

We had a meeting with HMRC shortly after the consultation document on T&S was published and they were quite open about the fact that a major issue for Government is that too many workers are now operating through umbrella companies and PSC's are therefore eligible for tax relief on T&S expenses. PSC's have become politically unattractive as they are viewed as tax avoidance vehicles by most of the media, again because they are being used in circumstances where they shouldn't be used and more people than Government intended are getting, what they perceive to be as, a tax advantage.

The BBC programme linked above focused almost solely on low paid workers, referring to only one 'higher paid IT worker' who was on a support desk and earning £25k a year. HMRC appear to be comfortable with contractors (as I understand the word - highly skilled, independent workers) but not with the huge influx of lower paid workers who've entered the market place. We all know that this move has been driven by clients who want to save money and with employment costs as they are who can blame them but this move will not resolve the situation - companies will not magically take workers back onto their books because their net pay through their brolly or PSC has gone down - look what happened to construction workers after the CIS shake up.

The only way to appease HMRC and, more importantly the politicians who will be the driving force behind these changes, is to present them with a solution that will take low paid workers out of the equation and put them back into full time employment - the tax man will be happy, the politicians will be happy and the workers will be in a much more secure position and financially no worse off.

[LisaContractorUmbrella]

It's quite a huge decrease, and that is predicated on figures that are already very flimsy. I'm a little perplexed as to why there is such an utter lack of rigour in estimating these figures, when they are proposing changes that could have huge direct effects on the freelancer market and its engagers. Even assuming that the £230m is true, that's at most £2.3bn over 10 years, without factoring in any wider economic detriment or behavioural changes it might induce. That is a minuscule amount compared to the total tax take. Surely they could nab the remainder by simply calibrating dividend tax rates (not that I'd want that) accordingly, rather than going through all this mess?

I am pretty certain that this has absolutely squat to do with the money

[LisaContractorUmbrella]

This article in today's FT demonstrates the problem for the Government pretty well I think http://www.ft.com/cms/s/0/e6231ad6-4...#axzz3jF1ebrIM

[teapot418]

This article in today's FT demonstrates the problem for the Government pretty well I think http://www.ft.com/cms/s/0/e6231ad6-4...#axzz3jF1ebrIM

It's behind a paywall if anyone can give a summary please?

[eek]

It's behind a paywall if anyone can give a summary please?

press release https://www.citizensadvice.org.uk/ab...nd-government/

Its supposedly covered in the telegraph as well

[TheCoconutDog]

It's behind a paywall if anyone can give a summary please?

Worked ok for me - but I have registered on the site. Haven't paid them a bean.

[eek]

Worked ok for me - but I have registered on the site. Haven't paid them a bean.

Depends how many articles you read a month

[dynamicsaxcontractor]

The only way to appease HMRC and, more importantly the politicians who will be the driving force behind these changes, is to present them with a solution that will take low paid workers out of the equation and put them back into full time employment - the tax man will be happy, the politicians will be happy and the workers will be in a much more secure position and financially no worse off.

Shouldn't this be fairly easy for them to sort if they really wanted to? If you make the start up cost high and overheads on smaller turnover higher then these people would never form a LTD to operate through.

1) Make a rule that you need £X in capital when setting up a LTD, say £10K.
2) Add an operating a LTD company tax of £5K a year - this will be deductible from the corporation tax so anyone normally paying more than £5K in CT will not be affected.

This should screen out most of the ones they would be after.

[LisaContractorUmbrella]

Shouldn't this be fairly easy for them to sort if they really wanted to? If you make the start up cost high and overheads on smaller turnover higher then these people would never form a LTD to operate through.

1) Make a rule that you need £X in capital when setting up a LTD, say £10K.
2) Add an operating a LTD company tax of £5K a year - this will be deductible from the corporation tax so anyone normally paying more than £5K in CT will not be affected.

This should screen out most of the ones they would be after.

Yes but the Government won't like that as it is a disincentive to entrepreneurs and Mr Cameron (apparently) is right behind small businesses David Cameron's message to small business leaders - BBC News