Freelance Limited Company (FLC) offering from IPSE

[eek]

Yeah, one way or another, I think we at least have to hope for that, i.e. that HMG and HMRC are two different things, but that holds only to a point. I think the concern for HMG with any proposal that seeks to find a compromise would be that the compromise itself attracts a lot of people that might otherwise be deemed employed. IMHO, it's completely impractical and unsaleable (and the analysis from EY doesn't really push against this, it simply notes the contingency upon it) to establish two sets of rules, with a consequence that one set is somewhat less demanding than the other set (IR35) and has a somewhat reduced tax burden. They will want to know that those who should be employees are being taxed as employees. There will be one set of rules, I'm certain of that, if nothing else.

In any case, I'd suggest we focus on the deeming criteria, rather than something bigger. That way, whomever is right, we'll still have a reasonable set of criteria (for the FLC, or for some other tax compromise or anything else). If we can find a decent set of deeming criteria that are simpler than IR35, while increasing the tax take for those that really should be employees, and allowing SDC to be applied in a more practical way (because I can't see it being dropped, given the various other pieces of legislation that are likely to reference SDC), I think that's what we're after. It would be great if we could stop arguing about the FLC and start arguing about the deeming criteria more.

probably best to move back to the http://forums.contractoruk.com/accou...nciples-6.html thread and leave this for those who still believe an FLC offers anything...

[LisaContractorUmbrella]

Don't worry about it. IPSE says that that conversation never occurred....

They weren't there That was at a meeting between HMRC and AUCAE. Unless there was a spy in the camp

[malvolio]

They weren't there That was at a meeting between HMRC and AUCAE. Unless there was a spy in the camp

..or people at the meeting contacted IPSE immediately the meeting finished?

[LisaContractorUmbrella]

Here you go

Case study 1:
A legal company hires two lawyers in 2015-16 who do the same job and work on the same cases.
The company pays the lawyers gross payments of £70,000 per year.
Jo works as a direct employee. The company deducts income tax and employee NICs from her salary and pays
employer NICs on top. The total tax and NICs paid on Jo’s salary is £30,612 (£22,071 by Jo and £8,541 by the
company).
Ben works through a PSC and does not operate IR35. He pays himself the most tax advantageous remuneration
strategy combining a low salary and dividends. His total tax and NICs liability is £16,900.

Case study 2:

An NHS trust hires two nurses in 2015-16 and pays a total of £30,000 for each. The NHS trust
does not want any additional costs and so, where the trust is liable to pay employer NICs, they negotiate a lower
salary for the nurse.
Mark works as a direct employee. The NHS trust pays Mark a gross salary of £27,345 to account for the fact that
they have to pay employer NICs. The total tax and NICs paid in relation to Mark is £8,316, and Mark’s take home
pay is £21,684.
Sarah works through a PSC and does not operate IR35. She pays herself using the most tax advantageous
remuneration strategy and the total tax and NICs liability is £4,200 and takes home £25,800.

These two case studies are totally unrealistic but what's not taken into account are the amounts that are taken from the Government by the respective workers. A company can claim back 92% of maternity pay for instance and that's going to be an awful lot higher for the permie that it would be for the contractor (if they have any entitlement at all). The permie would also get tax relief on the auto-enrolment pension contributions that are made. I don't know much about out of work benefits but I am sure that, initially at least, the ex-permie would have more entitlements than a benched contractor. I am sure there must be other examples as well

[LisaContractorUmbrella]

..or people at the meeting contacted IPSE immediately the meeting finished?

Can't think why they would

[teapot418]

“HMRC’s first consultation getting just three responses from contractors has wrongly led tax officials to believe that SDC’s impact on contractors will be minimal," said Smith. "Fill out this form to help put the Revenue right."

Industry body AUCAE has now sprung into action, by asking contractors to fill in a form asking how ‘SDC’ will affect them, so HMRC can see the true impact its proposal will have.

'Contractors, set HMRC straight on SDC's impact' :: Contractor UK

"PSCs" weren't in scope for the original discussion document, were they? So why would they respond? The intention was for this to affect umbrella users. It was pointed out in the responses that this may push umbrella users into incorporating. Hence PSCs brought into scope. It's why I'm a bit concerned about us all throwing our lot in together (no disrespect to Lisa intended). I don't think brolly contractors should be penalised either. But if it's a case of brollies, or brollies and PSCs, then I'd sooner it was just brollies. PSCs need to fight our own corner.

[LisaContractorUmbrella]

"PSCs" weren't in scope for the original discussion document, were they? So why would they respond? The intention was for this to affect umbrella users. It was pointed out in the responses that this may push umbrella users into incorporating. Hence PSCs brought into scope. It's why I'm a bit concerned about us all throwing our lot in together (no disrespect to Lisa intended). I don't think brolly contractors should be penalised either. But if it's a case of brollies, or brollies and PSCs, then I'd sooner it was just brollies. PSCs need to fight our own corner.

If SDC becomes the only determining factor for status and debt transfer liability is attached to the end client we will all be thrown in together whether we like it or not - it's not in my interest to fight for PSC contractors - but it is in my interests to fight for the industry

[eek]

Can't think why they would

Ignore Malvolio. I find its the best way especially when he's trying to distract us from his inability to answer a fair number of very simple questions...

As he won't answer mine perhaps he can answer these questions from WordIsBond...

Does the FLC IPSE has proposed come with a no-IR35 guarantee? That's a yes or no.

Is there any realistic scenario under which agents/clients will work with a Ltd Co rather than FLC if your proposal is accepted? I've not seen you put one forward. Which means it won't be optional. What I suggested is optional.

And don't worry I will happily repeat these questions until someone from IPSE provides answers...

[mudskipper]

And don't worry I will happily repeat these questions until someone from IPSE provides answers...

Mal is no more "from IPSE" than you are. He is a member. You are a member. He has access to exactly the same material, FAQs and documents as you. WIB's questions are addressed in the FAQs. You may not like or agree with the answers given, but that's a separate issue.

[eek]

Mal is no more "from IPSE" than you are. He is a member. You are a member. He has access to exactly the same material, FAQs and documents as you. WIB's questions are addressed in the FAQs. You may not like or agree with the answers given, but that's a separate issue.

Mal wishes to be something he isn't. Given his comments on Saturday I'm going to give him a very hard time online here for a long time to come.... Perhaps he shouldn't have spent 5 years on here happily allowing posters on here to assume and thinki he was providing the PCG / IPSE corporate view until you and TF called in out.

But as I've already said here multiple times the FAQs have a statement in them which means that the FLC needs to be withdrawn, now. We have already shown here that the statement the FLC will be optional is utterly untrue when reality comes calling. No one has disputed that either here or other there because to be blunt no one can - as everyone knows how agents and end clients will work.

Therefore either the FAQ answer needs to be explicitly corrected to state that the IPSE will only withdraw the idea if the Government makes it compulsory or the entire concept should be rapidly dropped with the contempt the idea deserves..