Freelance Limited Company (FLC) offering from IPSE

[TheFaQQer]

I guess you used the same survey makers as the Heathrow campaign and my local council....

I didn't use anyone

However, the FAQ on the IPSE forums talks about the survey a bit as well.

[DaveB]

Perhaps understand the reasoning before you decide it's all wrong? Just a thought...

For one thing, and something I haven't seen much of in this thread, we have to understand that the way we currently get paid and claim expenses through OurCo or through brollies stops in 2016. Left to its own devices HMRC will be taxing all workers at the same level by 2017 on the assumption they are either employees or should be employees. I won't be working by then so I don't care, but those that are still in the game need to wake up. Your only defence is to prove that you are running a business and aren't an Office Angels temp.

Good luck with that...

Expenses change have not been confirmed yet, it is still in the consultation stages and there are several representations being made to HMRC about this, using real world numbers collected from this affected. Until it actually appears in a Finance Bill it's still up for debate.

Anyway, how exactly does being an FLC solve the problem?

HMRC's issue is that they believe too many people are incorporating soley for tax purposes or as a result of being made to do so by employers who would otherwise take them on as employees. All that will happen is that those same employers will then only take on people who operate as an FLC, leading to the same situation. Large numbers of low paid workers getting tax relief on T&S when they should treated as employees and losing any employment rights they should have had, and employers avoiding NI contributions that they would otherwise have been paying.

What we should be doing is looking for ways to help HMRC ensure that low paid workers who are currently losing out by having to work in this way are protected while leaving those of us who are genuinely independent by choice to do our thing.

The FLC solves none of these issues, nor does it provide any indication of how you would determine who is in business on their own account and who is simply using and FLC to avoid tax or because they are being forced to.

Frankly it's a shambles.

[eek]

Perhaps understand the reasoning before you decide it's all wrong? Just a thought...

For one thing, and something I haven't seen much of in this thread, we have to understand that the way we currently get paid and claim expenses through OurCo or through brollies stops in 2016. Left to its own devices HMRC will be taxing all workers at the same level by 2017 on the assumption they are either employees or should be employees. I won't be working by then so I don't care, but those that are still in the game need to wake up. Your only defence is to prove that you are running a business and aren't an Office Angels temp.

Good luck with that...

If all else fails post fake scare stories to force the people to accept it..

I take it that viewpoint is based on the second hand conversation that was reported by Andy on the 7th. I like the fact my second hand anecdote (hardly its from Lisa) is dismissed out of hand while that one is taken as gospel.. Don't worry I will happily repeat that for ever more as it emphasis IPSE's totally double standards and I'm better than you Jack attitude...

Shall we just say I have reason to believe that that may not be the full story of what was either said or what is being thought about...

But if you really think that is the case....

[eek]

I didn't use anyone

However, the FAQ on the IPSE forums talks about the survey a bit as well.

I don't remember it accepting that the questions are biased towards a its a good, reasonable, just about acceptable, oh well I better accept it solution.

[eek]

I don't mind, but I do think you'd be better posting on the IPSE forums where the board and SMT read every post and do take on board what is being said.

Whilst it has been stressed that there are some good points being made outside the IPSE forums, the only place you are guaranteed that your voice on this is heard is over there.

Been there done that can't be bothered with the we can't be bothered to listen viewpoint.

And to be honest I really don't care if IPSE propose it or not. The other responses will stop it getting anywhere if they knew that new legal entities were being created. They would merely point out that regardless of how carefully the law is written employers rapidly find a way to (ab)use them...

[SueEllen]

I didn't use anyone

However, the FAQ on the IPSE forums talks about the survey a bit as well.

Well you should have got someone to review your questions and responses for clarity, as the university students who randomly post on here with their project surveys would have done a better job.

As long as a vast majority of responders don't answer strongly disagree/strongly dislike you can sum up the results how you like e.g. putting the view forward no one is against FLC.

[mudskipper]

I'd also like to point out that the people arguing on the IPSE forums are members with individual viewpoints. A member stating something as fact does not necessarily mean it is an IPSE viewpoint.

[eek]

I'd also like to point out that the people arguing on the IPSE forums are members with individual viewpoints. A member stating something as fact does not necessarily mean it is an IPSE viewpoint.

meh... The we're all right jack attitude is one that you can't disagree with...

The inability to comprehend that people will try and abuse it is entertaining.

Personally I'm split between wanting IPSE to kill it before they reveal it or wanting it to go ahead and watch it instantly attacked and destroyed in the IR35 consultation phase by every union, low paid campaign group, individual member of the public...

My concern with that latter is that doing that will result in Malvolio's nightmare. The we are special / better than everyone attitude will result in any sensible limitation being ignored and a blanket we are doing x approach adopted instead.

[jamesbrown]

Perhaps understand the reasoning before you decide it's all wrong? Just a thought...

For one thing, and something I haven't seen much of in this thread, we have to understand that the way we currently get paid and claim expenses through OurCo or through brollies stops in 2016. Left to its own devices HMRC will be taxing all workers at the same level by 2017 on the assumption they are either employees or should be employees. I won't be working by then so I don't care, but those that are still in the game need to wake up. Your only defence is to prove that you are running a business and aren't an Office Angels temp.

Good luck with that...

Er, I think everyone understands the reality of the situation, perhaps more here than on the IPSE forum. There needs to be a compelling reason on both sides to adopt a new corporate structure and for making that structure optional (IPSE's stated prerequisite), and I don't see a compelling reason on either side. Even if you believe that some middle ground is attainable (i.e. where increased tax is traded for more security), a corporate structure is an unnecessary complication; it's the rules that distinguish between employment and self-employment that matter, as they constitute the entry and ongoing requirements for an FLC, as well as the deeming criteria for IR35. Clearly, the FLC isn't a solution to IR35 or to T&S, and yet they are precisely the questions being posed. It beggars belief that two separate sets of rules would be entertained by HMRC. That things are going to change is a given, but the FLC does not offer a solution to that changed environment.

I dare say that IPSE will sell the concept to a fraction of its members (i.e. trading increased security for more tax), but they are likely to be disappointed by the reality, where HMG listen to some of the deeming criteria, but drop the corporate facade. From what I can tell, a majority of its most active members - perhaps those that are best informed and most clearly outside IR35 - appear to believe that they wouldn't or couldn't use such a structure. I believe you've stated that yourself. Surely you can see the problem there

[SueEllen]

Perhaps understand the reasoning before you decide it's all wrong? Just a thought...

The reasoning is illogical.

The PCG people who proposed FLCs have been flogging the idea for a few years even before these tax changes where proposed.

They seem to think campaigning for a special structure is the answer when there are already enough legal entities people can work through.

I've also have worked in a couple of other European countries and have discussed small business formats and laws with people from different countries. The tax rates in other Northern European countries treat small companies and freelancers less favourably than the UK. It does help their tax laws are simpler and their tax regulations are smaller. (We know in some Southern European countries people don't like paying taxes.)

The UK isn't the only country where employers try and force people into false self-employment.

If there is no tax advantage for the employee and there can be punitive fines for the employer, then there is no incentive for people to go down that route to try and avoid employment laws.