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[Zero Liability]

I am pretty certain that this has absolutely squat to do with the money

Well what does it center around then? For clarity's sake I'm referring to the upcoming review of IR35, not the T&S consultation.

[eek]

Well what does it center around then? For clarity's sake I'm referring to the upcoming review of IR35, not the T&S consultation.

My guess is too many people being self-employed.. you only have to look at the examples in the discussion document to see that people think employers (and some employees) are just taking the mickey...

Of course this ignores the fact that that is the way the world is moving and HMRC should be trying to simplify and standardise rules but that's in the too hard to fix pile....

[Zero Liability]

Well the discussion document does suggest they're concerned about protecting the Treasury IIRC, and therefore are eager to rake in more. I'm just eager to see whether they will be able to produce more accurate figures concerning how many 'PSCs' there are with the agency reporting requirements in place, which should give them a clearer idea of this excl those who contract directly, and then reconcile this with the impact of the dividend tax changes.

If it's not about the rather paltry sums involved then it does indeed seem reflective of an outmoded view of how work is and will be done. Surely if the self-employment is driven by the worker's choice, the 'pro business' government should welcome it.

[eek]

Well the discussion document does suggest they're concerned about protecting the Treasury IIRC, and therefore are eager to rake in more. I'm just eager to see whether they will be able to produce more accurate figures concerning how many 'PSCs' there are with the agency reporting requirements in place, which should give them a clearer idea of this excl those who contract directly, and then reconcile this with the impact of the dividend tax changes.

If it's not about the rather paltry sums involved then it does indeed seem reflective of an outmoded view of how work is and will be done. Surely if the self-employment is driven by the worker's choice, the 'pro business' government should welcome it.

I think the problem is that there are loud vocal unions on the side saying that self-employment is often not a choice...

[WordIsBond]

There's quite a lot to respond to there, but my basic problem (and, more importantly, I think this would also hold for HMG/HMRC) is that you will find many contractors that are subject to quite a high degree of SDC that fit into the first category.

Well, JB, I'd say all HMG cares about is getting more money in a way that doesn't make them look bad.

And I think that first category of people is an opportunity to make them look bad. Their focus on SDC without recognising real businesses is throwing the burden of employers NI onto the workers. That's a formula for giving them some really bad press.

It may be your opinion that contractors who operate a sequence of short-term contracts are very different from employees, but it isn't an opinion that's borne out by case law.

I think a focus on case law is not at all helpful here. If case law were going to drive this, we wouldn't have to worry too much, because IR35 is largely ineffective operating under case law. We're probably going to be dealing with statutory law within a year or two, and we'd be best off making proposals / suggestions that the statute should protect those who have real businesses.

I appreciate the clamour for simple rules, but there are no simple rules that are good rules

I don't actually think this is true. If the rules are based on reality, it should be easy to construct some simple rules that put most cases either clearly inside or clearly outside, and significantly reduces the number of murky cases. Right now, tens of thousands of contracts, probably hundreds of thousands, are open to interpretation and a case could be argued either way, so a costly inspection is always a threat. I simply don't believe that the situation can't be made a whole lot clearer.

I think any workable strategy for HMG is going to focus on SDC, and it will be applied without fear or favour.

Something that is so drastically open to interpretation cannot be applied without fear or favour. Nor is it equitable. IR35 already skews the B2B relationship heavily in favour of the engager. If they go solely with SDC, that will make it worse.

It's also just plain stupid. If I engage a full-time gardener to maintain my country estate (LOL), he's an employee. If I engage one to come for three days and sort out the mess in my front garden, he's not. And he's still not even if I tell him exactly what I want planted, and where, and what kind of compost I want him to use when planting the tree. He's got his own business, and he shouldn't have to pay more tax (or have to pay tax on his expenses) just because I'm weird about my garden.

I suppose it's possible that they may further elaborate on cases that are squarely subject to SDC and hence inside IR35 (i.e. all agency contractors in the worst case scenario), but they are not in the business of identifying scenarios that are squarely outside.

Really? Statutory law is full of specifications of cases that aren't in the scope of the legislation.

I also wouldn't completely dismiss the T&S elements (although I agree it isn't the worst of what we face) because: 1) this will make all the difference to a significant minority; and 2) the rules are heading in a common direction, so the absence of SDC should, in principle, support T&S and an outside IR35 position. In other words, it's not a concession that has any real purpose or value once it becomes aligned with IR35. Of course, you can ignore all of this if agency contracts become de facto SDC.

I agree with some of the things you are saying elsewhere. In terms if indemnification, I think that would need to operate on the client side. In my view, one of the primary reasons that HMRC will be aiming for joint and several liability is that clients are easier to pursue and are less likely to fold leaving debts (including to HMRC), whereas any insurance policy will die with a PSC (leaving the unrealistic prospect of pursuing a director if possible).

I also wouldn't completely dismiss the T&S elements (although I agree it isn't the worst of what we face) because: 1) this will make all the difference to a significant minority; and 2) the rules are heading in a common direction, so the absence of SDC should, in principle, support T&S and an outside IR35 position. In other words, it's not a concession that has any real purpose or value once it becomes aligned with IR35. Of course, you can ignore all of this if agency contracts become de facto SDC.

As to dismissing the T&S stuff, I'm saying they should completely withdraw their proposals. Contractors aren't employees, and even if they are subject to SDC their T&S expenses shouldn't be taxable. Tweak the current rules if they think it is necessary, but the proposed changes are horrible and unjust.

Doesn't affect me much because I mostly WFH. But the proposals are terrible.

I agree with some of the things you are saying elsewhere. In terms if indemnification, I think that would need to operate on the client side. In my view, one of the primary reasons that HMRC will be aiming for joint and several liability is that clients are easier to pursue and are less likely to fold leaving debts (including to HMRC), whereas any insurance policy will die with a PSC (leaving the unrealistic prospect of pursuing a director if possible).

An insurance policy would name the engager as the beneficiary for the employers NI portion. So it wouldn't die with a PSC. So indemnification via insurance can work. The insurers will be offering products like that if the engager becomes liable.

[Zero Liability]

I think the problem is that there are loud vocal unions on the side saying that self-employment is often not a choice...

They're in a prime position, however, to fact-check that, and certainly should before introducing any reforms. I suspect you are probably right about the motivation as the dividend tax will already put more cash in their coffers.

[LisaContractorUmbrella]

Well what does it center around then? For clarity's sake I'm referring to the upcoming review of IR35, not the T&S consultation.

As Eek says, I think it has a lot to do with the number of workers being pushed towards brollies or PSC's by companies that previously had them on their books. I also think it's to do with Public appeasement - the media has labelled PSC's and brollies tax avoidance vehicles and it will earn HMG brownie points with the voters if they're seen to be stamping on it.

From HMRC's point of view I would guess that HMG have been nagging them about 'off payroll' for years and about how ineffective their attempts to deal with it have been up until now i.e. IR35 If these proposals go ahead the problem will go away and it will be one less thing for HMRC to worry about

[LisaContractorUmbrella]

They're in a prime position, however, to fact-check that, and certainly should before introducing any reforms. I suspect you are probably right about the motivation as the dividend tax will already put more cash in their coffers.

The Unions knew all about the changes to CIS as they were part of the consultation process along with a number of the large construction firms - didn't stop them moaning about the outcome though

[eek]

"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.

Or you could just go and ask CAB for the full report

I won't get a chance to read or post anything until tonight though...

[Zero Liability]

As Eek says, I think it has a lot to do with the number of workers being pushed towards brollies or PSC's by companies that previously had them on their books. I also think it's to do with Public appeasement - the media has labelled PSC's and brollies tax avoidance vehicles and it will earn HMG brownie points with the voters if they're seen to be stamping on it.

From HMRC's point of view I would guess that HMG have been nagging them about 'off payroll' for years and about how ineffective their attempts to deal with it have been up until now i.e. IR35 If these proposals go ahead the problem will go away and it will be one less thing for HMRC to worry about

Yes, I think I need to take off my economist hat and put on the politician hat, as I've been looking at the IR35 bit from a yield perspective, rather than political appearances, which probably explains the deficit of hard facts in pushing through this reform.