Freelance Limited Company (FLC) offering from IPSE

[eek]

Personally speaking, I don't want to operate inside IR35. If divvy tax is increased to make the difference negligible, then, whilst I won't exactly be dancing with joy, so be it - as long as it applies to all businesses. I can still then choose to leave profit in the company, max out pension etc. Those for whom it is relevant can still use spouse's tax allowances as appropriate. If I'm forced inside IR35, I'll simply work a lot less. I don't think the FLC proposal was ever that it would be more favourable than operating outside IR35 - why would HMRC ever go for that?

Divvy tax is increasing that's already been announced.

I don't think we said its more favourable than a limited company and FLC would be different to that and end up paying more.

The problem is the following, were the FLC to exist and be deemed by clients as less risky than a limited company...

Agency advertise contract.

First 3 FLC candidates are put forward, anyone using a limited company instantly rejected (too much additional risk)..

Eventually those people still using a limited company will have to move to an FLC for an agency to put them forward for any role....

IPSE don't seem to comprehend that optional may not actually be optional for long if you want to feed your family...

[yakitoo]

IPSE don't seem to comprehend that optional may not actually be optional for long if you want to feed your family...

There are lots of folks who do understand that point very well. The problem is that some CC/Board members dont seem to want to look at anything other then FLC. Worse they seem resigned to letting the new changes roll over everyone without a fight.

[eek]

There are lots of folks who do understand that point very well. The problem is that some CC/Board members dont seem to want to look at anything other then FLC. Worse they seem resigned to letting the new changes roll over everyone without a fight.

Looks at the FAQs posted on Friday if it wasn't optional they will kill it. Show me how the above makes it optional...

I'm a contractor with a 10 year old Limited Companies, agencies only want to deal with FLC's (as it reduces a perceived risk), I want to eat....

[malvolio]

OK, I'm persuaded. It's all hopeless, nobody, including the Head of Global Taxation at Ernst and Young, has any idea what they're doing or why, and everyone can just carry on as they are for evermore.

Can I come and live on your planet, it sounds nice.

[eek]

OK, I'm persuaded. It's all hopeless, nobody, including the Head of Global Taxation at Ernst and Young, has any idea what they're doing or why, and everyone can just carry on as they are for evermore.

Can I come and live on your planet, it sounds nice.

No I'm just using Andy's comment from Friday's FAQ that if it wasn't optional IPSE will kill the concept.

There is my first argument that it won't be optional. Destroy that argument or bin the FLC (as promised within those FAQs)...

I'm not commenting on who created it (it doesn't matter to me, but I worked with him 25 years ago). The fact is IPSE claim and promise that the FLC will be optional. I don't believe it will be. So as I (and others) show ways in which it will end being compulsory, someone needs to come on here and either

1. destroy the example / argument and show how it would not end up being unavoidable,
2. give up on the idea
3. or backtrack on the promise within Friday's FAQs...

[yakitoo]

I'm not commenting on who created it (it doesn't matter to me, but I worked with him 25 years ago). The fact is IPSE claim and promise that the FLC will be optional. I don't believe it will be. So as I (and others) show ways in which it will end being compulsory, someone needs to come on here and either

1. destroy the example / argument and show how it would not end up being unavoidable,
2. give up on the idea
3. or backtrack on the promise within Friday's FAQs...

1) It would be optional if HMRC say that it will not be required
2) It would still be technically optional even if agencies say they require it. We are not forced to go through agents but..........
IPSE are using the case in 1.

[eek]

1) It would be optional if HMRC say that it will not be required
2) It would still be technically optional even if agencies say they require it. We are not forced to go through agents but..........
IPSE are using the case of 1.

I guessed that but they need to be explicit about it and they haven't been...

Hence all they are doing is making promises to their members that it won't impact them without being explicit in what they actually mean by it being optional. I think that's called false advertising....

Let's go to example 2...

I get a new contract direct with large consultancy inc.
Large consultancy inc are not 100% sure about the SDorC rules so default to inside IR35 unless you use an FLC (I'll ignore the fact that an FLC will probably be subject to potential IR35 reviews so it may not work that way but that's a different argument from here.)

Is that really still optional....

[yakitoo]

Hence all they are doing is making promises to their members that it won't impact them without being explicit in what they actually mean by it being optional. I think that's called false advertising....

Also the certainty of being outside IR35 with a FLC ........ sounds a bit like the early cigarette adverts.

[malvolio]

Also the certainty of being outside IR35 with a FLC ........ sounds a bit like the early cigarette adverts.

Except that is rather the point.

If you qualify to use the option of an FLC, it demonstrates that you are very low risk for IR35 so you are left alone while HMRC focus on the target rich environment. If it can be made to work like that of course, which is the tricky bit, but nobody can force you to use an FLC if you don't qualify for one, which is why it will be optional.

[yakitoo]

Except that is rather the point.

If you qualify to use the option of an FLC, it demonstrates that you are very low risk for IR35 so you are left alone while HMRC focus on the target rich environment.

Can I come and live on your planet, it sounds nice.