Freelance Limited Company (FLC) offering from IPSE

[mudskipper]

I doubt that TCD is trying to persuade you of anything in regards of accepting the idea. His point is that the consultation is genuine, and IPSE want our views. A forum member arguing with you is not the same as IPSE not listening.

[SueEllen]

ignoring the bad example bit. Why couldn't Ben use an FLC... How does the FLC stop him (ab)using an FLC. Say you replaced lawyer with HR manager....

He could but if he got lower PI, his expenses deducted before tax and less accountancy e.g. he does his accounts himself due to being a sole trader why would he use an FLC? In short be doesn't need the new structure.

The HR manager may get caught by the office holders regulations.

Other "managers" jobs I can think of such as marketing managers and campaign managers can also work as sole traders as they tend to get work direct. Some will use an umbrella company if they get work through a recruitment agency but their work lasts days, weeks or months not years.

Case study 2 - those I've met who work for the NHS with patients who find that the bodies want them employed on fixed term contracts so they can guarantee they have someone for x period of time. In other words they can simply refuse to hire people if they don't like the structure they are using.

Unless you are dealing with recruitment agencies, whose agents don't understand the law anyway, direct companies either give you more leeway in the way you work or impose an existing structure on you that you have to work with.

In our cases regardless of if we employed people, if we got work through recruitment agencies we would be forced to use an FLC. Alternatively some would decide even if you had more than one director and an employee who is not an office holder, that you were an FLC anyway.

[eek]

I doubt that TCD is trying to persuade you of anything in regards of accepting the idea. His point is that the consultation is genuine, and IPSE want our views. A forum member(s) arguing with you is not the same as IPSE not listening.

Note the additional bit above.

Personally, IPSE are perfectly able to come across here and argue against our viewpoints. This is after all the place HMRC will find on Google and use as the reason to utterly ignore the idea. You may suggest they speak to DR, Santa Claus, BP and others as to how happy HMRC were to use comments posted here to counter the argument BN66 were using..

So unless IPSE are willing to counter the arguments on here they may well have lost before the idea even begins...

[eek]

He could but if he got lower PI, his expenses deducted before tax and less accountancy e.g. he does his accounts himself due to being a sole trader why would he use an FLC? In short be doesn't need the new structure.

The HR manager may get caught by the office holders regulations.

Other "managers" jobs I can think of such as marketing managers and campaign managers can also work as sole traders as they tend to get work direct.

1 reason for using an FLC might be that post 2017 limited company automatically in IR35 or payment has to be direct via PAYE, FLC = outside IR35 for a bit.

The rules HMRC want is to have case studies 1 and 2 being paid via PAYE (yes thats not written explicitly but the case studies somewhat imply it)...

Personally I don't think any solution that doesn't have those 2 examples well and truly caught within the new IR35 regulations has a chance of being accepted....

[SueEllen]

1 reason for using an FLC might be that post 2017 limited company automatically in IR35 or payment has to be direct via PAYE, FLC = outside IR35 for a bit.

The rules HMRC want is to have case studies 1 and 2 being paid via PAYE (yes thats not written explicitly but the case studies somewhat imply it)...

Personally I don't think any solution that doesn't have those 2 examples well and truly caught within the new IR35 regulations has a chance of being accepted....

The lawyer would simply unincorporate.

The nurse would accept the fixed term contract they were offered and make use of the sick pay and holiday pay. Unlike us and agencies, public bodies tend to offer these perks.

[malvolio]

Note the additional bit above.

Personally, IPSE are perfectly able to come across here and argue against our viewpoints. This is after all the place HMRC will find on Google and use as the reason to utterly ignore the idea. You may suggest they speak to DR, Santa Claus, BP and others as to how happy HMRC were to use comments posted here to counter the argument BN66 were using..

So unless IPSE are willing to counter the arguments on here they may well have lost before the idea even begins...

You've got a couple of hundred survey respondents. IPSE have a few thousand and counting. So who's the more important?

[eek]

You've got a couple of hundred survey respondents. IPSE have a few thousand and counting. So who's the more important?

And how is that relevant to this thread or professional. If that's the best retort you can come up with you've already totally and utterly lost.

All I said was that I will be arguing against the FLC here and nowhere else. And to point our that this is a public forum that HMRC will find on google and read..

So unless someone counteracts the arguments on here its going to be a very one sided thread showing that the concept is utterly unfit for purpose and designed without means to stop the people in case study 1 and 2 from abusing it...

[cojak]

I don't really feel that helps anyone's cause, and as for the childish who's more important/got the biggest willy, well, words fail me.

This isn't the place to shout people down who have an opposing view to yours. IPSE is not the sole debating chamber for this discussion.

I expect better, people...

[WordIsBond]

I don't have a dog in this fight, just to say. I won't be FLC, and neither the current IR35 nor where we think it is going are likely to hit me, in general. I'm just not subject to SDC, I work from home, and most of clients are outside the UK.

But something strange happened to me, and I thought I'd ramble on about it here. I'm not sure why I chose this thread to talk about it, but maybe it will come to me later.

I told all my friends and neighbours that I was going to go talk to our local council and make a proposal that would affect them all and might cost them some money if the council adopted it.

When they wanted to know what it was, I told them I was only going to discuss it with those of them that paid dues to join a club I started.

And then I told them that I was also only going to discuss it at my house, to make sure only club members could even hear the discussion.

A bunch of them were talking about the same thing, and some even talked about my proposals, over at the community hall. They invited me to come, said there were a whole bunch of them talking about it, but I wouldn't come, even though hardly anyone came to my house to talk about it.

Why doesn't anyone on my street like me anymore?

The thing that makes me sick is that I joined IPSE and now they'll claim, "We represent XX,000 independent members" when they propose this thing, and they don't represent my views at all. But they'll include me in that XX,000.

[WordIsBond]

Why not Limited Liability Partnership (LLP) ?

The LLP format was introduced in 2001 by the LLP Act 2000 to meet the needs of certain professions that usually form traditional partnerships, such as solicitors, doctors, accountants, architects, etc. LLPs provide the same benefits as traditional partnerships with the added benefit of reduced financial responsibility for their members. An LLP structure is a good choice for businesses with minimal employees (if any) and only a few partners, each of whom makes similar contributions to the business, enjoys equal rights and responsibilities, and takes a similar share of business profits.(Source: rapidformations, a link was deleted)

20% on income between £0 – £31,785 (you will start paying this rate on income above the £10,600 Personal Allowance threshold)
40% on income between £31,786 – £150,000 (you will start paying this rate on income over £42,385)
45% on income over £150,000

So with income about £84K(excl. VAT) in summary for two partners (for example a contractor and his helpful wife) it might be roughly 24% in tax (according to some LLP tax calc) if every partner not exceeding £42,385 threshold.

Why not to propose LLP for one person (aka LLC, LL Contractor) instead of FLC?
I am not an expert in that, but LLP option deserves some analysis. It might be not good as well as agents would require everyone use LLC or FLC for their sake.

P.S. As a variant, a few contractors might form LLC. Limited liability for temporary employees.

P.P.S. But the best thing is to make fair tax for "inside IR35" contracts considering real world when we might mix "outside" and "inside IR35" contracts as it depends on a client/project.

LLP is still subject to IR35, so if inside IR35 you would still pay tax on the deemed payment just like a Ltd Co contractor would. It gains you nothing if inside.

HMRC would undoubtedly be all over you if you gave your helpful wife an equal share in the profits of an LLP. You'd have to be able to justify that any income you sent her way was fully justified by her contribution to the company.

It's less tax efficient than a Ltd Co.

Other than those things, you've suggested a great idea.

Most of the objections here in the past have been problems with joining existing LLPs, some of which may have been scams/schemes. Those wouldn't be a problem if you made your own LLP. But the other things would be an issue.