Freelance Limited Company (FLC) offering from IPSE

[eek]

If that is the only representation we make, sure. You have to suggest something to replace it. A marginal increase to the dividend tax would be one option.

Its not really an option as the dividend tax is nothing to do with IR35 - that is a tax grab for different reasons.

Yes it reduces the effectiveness of these T&S and IR35 changes but that is irrelevant to this argument. It does mean that arguing to increase it won't work as it would impact other people who receive dividend payments from companies they have invested in...

[Zero Liability]

Could they not simply apply it selectively to contractors engaged via an agency, as this is already reported? Obviously not fair and discriminatory but I think WIB's idea would be a blanket increase in it for contractors anyway, to achieve HMG's aims - leaving aside whether that should be the aim. As it stands, very few contractors would not end up falling under SDC as defined in these documents.

[LisaContractorUmbrella]

Yes, but the problem is, it is too broad. It would be fine for long-term engagements but doesn't make sense for someone starting their own business and offering their services to multiple clients at cheap rates to build a client base. It's a sledgehammer where a scalpel is needed.

My proposal on the low-paid accomplishes most of the same thing but without the absolute prohibition, and absolute prohibitions usually bring unintended consequences and collateral damage.

There would still be the option to operate as a sole trader so plumbers, gardeners etc wouldn't be caught up there just wouldn't be the option to source through an agency

[eek]

Could they not simply apply it selectively to contractors engaged via an agency, as this is already reported? Obviously not fair and discriminatory but I think WIB's idea would be a blanket increase in it for contractors anyway, to achieve HMG's aims - leaving aside whether that should be the aim. As it stands, very few contractors would not end up falling under SDC as defined in these documents.

The big problem there is that the worst offenders are probably not agencies but companies offering it their own "employees"..

[Zero Liability]

I'm guessing you mean Fri-Mon scenarios where the contractor is engaged directly? If so their proposed revisions won't touch that either, as the presumption of SDC would be for those contracting via an agency.

[eek]

I'm guessing you mean Fri-Mon scenarios where the contractor is engaged directly? If so their proposed revisions won't touch that either, as the presumption of SDC would be for those contracting via an agency.

That's just an add on... Its not the core of the proposal....

[Zero Liability]

Right, my understanding of it is that it would put SDC at the centre (sole test) of whether you were inside or out, with the client potentially responsible for making that call, with the prospect of being stuck with the costs if they misrepresent the situation as 'outside' when not. The risks involved in so doing and the difficulty of proving a negative could make them risk averse, particularly when there is a presumption of SDC as with agencies. So is the point then that the deterrent effect would help reduce such 'direct' scenarios driven by the client? Or am I missing something?

[WordIsBond]

Its not really an option as the dividend tax is nothing to do with IR35 - that is a tax grab for different reasons.

Dividend taxation is everything to do with IR35. IR35 is intended to protect the Exchequer and level the taxation playing field between employees and non-employees doing the same work. The only reason that is even something they care about is because dividend taxation is low.

Dividend taxation is just another way to do what IR35 was supposed to do. It's IR35 by the back door, whether they intended it that way or not. The fact that it was a good old-fashioned tax grab doesn't change the fact that it already did a lot to level the taxation playing field, and grabbed half of the money that IR35 was supposed to be grabbing. And if you increase it a little more, you'd finish the job, render IR35 moot and make it feasible to kill Gordon Brown's monstrosity completely, and make everyone's life (ours, HMRC) easier.

[eek]

Dividend taxation is everything to do with IR35. IR35 is intended to protect the Exchequer and level the taxation playing field between employees and non-employees doing the same work. The only reason that is even something they care about is because dividend taxation is low.

Dividend taxation is just another way to do what IR35 was supposed to do. It's IR35 by the back door, whether they intended it that way or not. The fact that it was a good old-fashioned tax grab doesn't change the fact that it already did a lot to level the taxation playing field, and grabbed half of the money that IR35 was supposed to be grabbing. And if you increase it a little more, you'd finish the job, render IR35 moot and make it feasible to kill Gordon Brown's monstrosity completely, and make everyone's life (ours, HMRC) easier.

My gran (who has never done a days paid work since marrying in 1942) is going to be hit by the dividend tax. She has nothing to do with IR35... The dividend tax is an increase in tax, it hits us but has nowt to do with us bar allowing me to attack the figures mentioned in the T&S consultation and the IR35 discussion documents..

[WordIsBond]

There would still be the option to operate as a sole trader so plumbers, gardeners etc wouldn't be caught up there just wouldn't be the option to source through an agency

But builders / roofers / electricians might want to operate through Ltd Co rather than sole trader for liability reasons. Or mechanics. Sure, they aren't likely to be on that low of an hourly rate. But I'm sure there are those on low rates where liability could be a concern, they just aren't coming to mind right now. I like the goal of the blanket prohibition but it seems certain to hit someone you aren't intending to hit.