Freelance Limited Company (FLC) offering from IPSE

[pr1]

We are not talking about us. Lisa is talking about people who earn £12 an hour or less, my figure being higher is talking about those earning £15 an hour or less... Very few skilled contractors of any trade earn that little (please, please show me an exception)...

so someone on £14.90 per hour is different to someone on £15.10 per hour? you can't just draw an arbitrary line. Why should being "skilled" make you more eligible for a tax break than someone less skilled

Thanks to Eek for the clarification of my earlier points

No more ludicrous than basing the criteria for determining whether or not tax relief is due on expenses on a single element of employment law which effectively involves the tax payer (or engager or agency) proving a negative.

maybe not more ludicrous but easily equal

This is about achieving HMRC's aim without decimating the contractor market - the current proposals are less sledgehammer and nut and more nuclear device and amoeba

silly over exaggeration - most contractors gross (at least) twice what they would get as perm, which means even on equal tax-footing they only *need* to work about 7 months of the year to come out with the same. The fact that most of us push to try and work 9/10/11 months per year and have a better lifestyle (than our equivalent permie-selves) with the extra cash has made us overly greedy

[Contreras]

One other thought on this: I don't think we should be complacent about the problem and solution being focused elsewhere. We (professional contractors) are squarely in view as more than simply collateral. Would removing low-paid workers from incorporation address the argument for clients as gatekeepers on SDC? Afterall, this is the central problem. We either need to find a workable iteration whereby clients are encouraged/required to undertake a professional review rather than defaulting to SDC or we push back with a sufficiently convincing argument that it's unworkable and hope for the best (I have my doubts either way, but it surely must be one of these two things).

The only way clients as gatekeepers would not default to SDC would be concern over employment rights. The real reason clients want contractors is that they can easily be binned. Tax liability is usually incidental (except ironically perhaps in cases of the very low paid).

If we are not all to be automatically under SDC then those with the clout to do so should be rattling the cages of clients over the "risks" of SDC. IR35 is predicated on FUD and I see no reason why the FUD should be so one sided. The idea has been touted a few times over the years as an IR35 counter-tactic but has fallen on deaf ears. Unfortunately some people find the notion of employment rights at all really quite obnoxious.

[TheFaQQer]

I am a single consultant in a company that cannot expand beyond that point. Why do I need a business plan?

I missed that utter fail. but will happily add it to the list..

I raise that exact point at the most recent consultation day - my business plan is to bill as much as I can and make as much profit as I can. There isn't much else to do, and nor can I really add much to it.

The suggestion was made that that was fine as a business plan as long as it was reviewed and kept up to date - although the penalty for not meeting that plan is a separate matter. So whenever you're out of contract, update the plan so that it says that you plan to be out of work for a bit, and you're OK.

[TheFaQQer]

I do hope that we'll be able to bring some pressure to bear on this and avoid it being adopted as an official position.

Make your voice known on the IPSE forums. Take the survey and make your opinion clear - there is a question at the end to add comments, so please do. Make it explicitly clear whether you would consider using one, and explain why. Explain why it's the wrong approach to the wrong problem.

I cannot stress this enough - PLEASE respond to the survey and make your opinion clear. That is the only way to bring pressure to bear on this.

[LondonManc]

silly over exaggeration - most contractors gross (at least) twice what they would get as perm, which means even on equal tax-footing they only *need* to work about 7 months of the year to come out with the same. The fact that most of us push to try and work 9/10/11 months per year and have a better lifestyle (than our equivalent permie-selves) with the extra cash has made us overly greedy

Even? So we get redundancy, sickness, holiday, free pension now do we?

Change the record or log off.

[TheFaQQer]

I do have a plan. It features using substitution to build up a business to the point that it employs multiple people. I can't do that if the company I'm using is restricted to a single employee and shareholder...

The FLC proposal doesn't restrict to a single employee.

[cojak]

Perhaps if you read the document, you'll be in a position to slag it off with some authority.

You know I do believe eek has.

[jamesbrown]

Make your voice known on the IPSE forums. Take the survey and make your opinion clear - there is a question at the end to add comments, so please do. Make it explicitly clear whether you would consider using one, and explain why. Explain why it's the wrong approach to the wrong problem.

I cannot stress this enough - PLEASE respond to the survey and make your opinion clear. That is the only way to bring pressure to bear on this.

I'll certainly do the latter. Frankly, it's a huge PITA to have the same conversation in two places, and CUK is far more active. I probably won't be posting over there, but I do read the forum. Someone from IPSE needs to keep abreast of the conversations happening here and loop them back into their decision processes (i.e. in a more official capacity; I know there are a few IPSE CC members that post unofficially).

[eek]

so someone on £14.90 per hour is different to someone on £15.10 per hour? you can't just draw an arbitrary line. Why should being "skilled" make you more eligible for a tax break than someone less skilled



maybe not more ludicrous but easily equal



silly over exaggeration - most contractors gross (at least) twice what they would get as perm, which means even on equal tax-footing they only *need* to work about 7 months of the year to come out with the same. The fact that most of us push to try and work 9/10/11 months per year and have a better lifestyle (than our equivalent permie-selves) with the extra cash has made us overly greedy

Yes it is an arbitrary line as it makes it something easy to implement. Using a percentage of the national living wage means it get written once into the law and then never changes. And as Lisa says its no more arbitrary than use an agency = SD&C = no expenses.

It also solves the problem of companies using fake self employment to reduce costs.. Yes they can still do that but they will need to pay people significantly more than they currently do to work around it.

You need to look at the problem HMRC are trying to solve and come up with an HMRC friendly solution to this. Remember I'm not saying I like this approach, I just cannot see anything else that may work.

[pr1]

Even? So we get redundancy, sickness, holiday, free pension now do we?

Change the record or log off.

hence if you work 7 months and have 5 months sick/holiday you come out with the same as permie - most clientco's (in my engineering experience) don't pay full pay sick for more than 3 months anyway

you can claim JSA if you're out of contract (if you're that way morally inclined), same as a permie

you can decide whether you want to put more in your pension or more in your pocket out of the 2x gross you're making

if the rules came in, as planned, tomorrow - as much as everyone's kicking and screaming now i doubt many "high paid" contractors would stop contracting (I suppose time may tell)