Freelance Limited Company (FLC) offering from IPSE

[eek]

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.

No that doesn't work because there are legitimate reasons for very small companies to exist. Many buildings / estates are managed by limited companies which only exist to do small amounts of maintenance and save up for major repair works...

My plan c has a company which turns over exactly 0 at the moment.... It made a loss of £8k last year and will probably continue to do so until the market is right....

Now you could create a new corporate entity type and change things in such a way that agencies can only work with that agency type but not even the IPSE went that far (although in reality you don't need to force agencies to do it, they would automatically insist upon it as it is the case of least resistance)...

[teapot418]

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

"The one in ten people potentially bogusly self-employed figure was derived by looking at Indicators including whether they choose the hours that they work, provide their own equipment and if their employer deducts tax from their payslip. Respondents were classed as potentially bogus self-employed where they hit three or more markers."

A google gold star for anyone who can find out the whole list.

[MicrosoftBob]

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

Shame as weneed the nuclear option, if end clients had to give employments rights and pay PAYE and NI then they would fight tooth and nail to make people outside IR35

[eek]

Shame as weneed the nuclear option, if end clients had to give employments rights and pay PAYE and NI then they would fight tooth and nail to make people outside IR35

I said the OTS rejected it, it is however back on the table...

My problem is that the planned logic is:-

Client is jointly liable for all tax payments due, client will need confirmation that everything is paid, client will need confirmation its been paid by a trusted 3rd party...

[jamesbrown]

I said the OTS rejected it, it is however back on the table...

Yes, I also read this again recently. For those interested, the summary is presented in Table C.5 on page 63 of the report.

Although it was rejected at the time, I think some of the criticisms are addressed by the changes being proposed. For example:

"The main problem with this approach is that the engager will only see one contract; yet the worker’s position as IR35 or not, although technically on a contract by contract basis, needs to be assessed on an overall basis that the end-user will not see."

This isn't the case with a refocus on SDC.

"The policy would not address the key issue of clarification of the boundary for IR35"

Again, this is partly addressed by refocusing the criteria to SDC.

"The policy would be onerous for engagers and also for HMRC in ensuring compliance."

True, but that's a given in entertaining the proposal, and compliance for HMRC is probably eased through the new intermediary reporting requirements (possibly with some tweaks).

[TheFaQQer]

Back to IPSE however, I know the paper is out for consultation but I'm yet to see anyone who supports their views and I can't understand how they reached the views they have. I hope this is a true consultation and they listen to feedback. If not then I will be getting my insurance elsewhere. Bring back the PC I say!

Just to re-emphasize my earlier posts - PLEASE make sure you respond to the FLC survey, whether positive or negative. And make use of the free text boxes to provide as much reasoning as you can - could you operate in the same way under an FLC as you do at the moment? If you could use an FLC, would you? Why would / wouldn't you?

As a members organisation, the board are bound to listen to the membership, so the more people express their opinion, the more representative the survey can be.

[LisaContractorUmbrella]

Yes, I also read this again recently. For those interested, the summary is presented in Table C.5 on page 63 of the report.

Although it was rejected at the time, I think some of the criticisms are addressed by the changes being proposed. For example:



This isn't the case with a refocus on SDC.



Again, this is partly addressed by refocusing the criteria to SDC.



True, but that's a given in entertaining the proposal, and compliance for HMRC is probably eased through the new intermediary reporting requirements (possibly with some tweaks).

What this approach doesn't deal with is the lack of interest on the part of the engager. If it's not in a business' own interests to undertake a risk assessment they're not going to bother and if there's a possibility of debt transfer they will follow the path of least resistance i.e. everyone inside IR35. The type of review that would be necessary and the burden on the legal departments of big companies with something as ill defined as SDC would just not be worth it for them

[eek]

What this approach doesn't deal with is the lack of interest on the part of the engager. If it's not in a business' own interests to undertake a risk assessment they're not going to bother and if there's a possibility of debt transfer they will follow the path of least resistance i.e. everyone inside IR35. The type of review that would be necessary and the burden on the legal departments of big companies with something as ill defined as SDC would just not be worth it for them

+1. Although it won't be everyone inside IR35 it will be everyone is inside IR35 and you will use this 3rd party umbrella (that we trust) for payments and no one else...

The idea that a end clientco is going to accept responsibility for paying the tax of a legal entity it doesn't control and could disappear is an absolutely hilarious concept..

[The Spartan]

Just to re-emphasize my earlier posts - PLEASE make sure you respond to the FLC survey, whether positive or negative. And make use of the free text boxes to provide as much reasoning as you can - could you operate in the same way under an FLC as you do at the moment? If you could use an FLC, would you? Why would / wouldn't you?

As a members organisation, the board are bound to listen to the membership, so the more people express their opinion, the more representative the survey can be.

Done

I wrote about 4 paragraphs (definitely a lot for me), about how it was a poor proposition and defeatist position.

[jamesbrown]

What this approach doesn't deal with is the lack of interest on the part of the engager. If it's not in a business' own interests to undertake a risk assessment they're not going to bother and if there's a possibility of debt transfer they will follow the path of least resistance i.e. everyone inside IR35. The type of review that would be necessary and the burden on the legal departments of big companies with something as ill defined as SDC would just not be worth it for them

Yes, I think that's understood. Two observations though. First, I think it's probably going to happen; despite the appearance of being a discussion (i.e. IR35), it sounds as though they want to push it through, and I think they'll be willing to take some heat from engagers (it will be interesting to hear whether this comes up at the T&S roundtable - next week?). Of course, I hope I'm wrong, and that they're willing to back down on that with forceful opposition (conversely, I think SDC is almost certainly a done deal). Second, your point about whether it's in the interests of an engager to do anything other than assume SDC is precisely the issue we need to consider. I'm trying (hard) not to be pessimistic, and to consider whether anything could mitigate that near-inevitability.