Freelance Limited Company (FLC) offering from IPSE

[TheFaQQer]

If the FLC goes ahead, it will be limited liability PAYE, essentially.

I'm not sure it will be at that level - because that would be worse than being inside IR35 in a limited company. Maybe closer to limited liability self-employed rates, but who knows what the rates will be.

But anything that is too punitive will mean that there is low take-up. And anything that is too generous will need to have very strict entry criteria to ensure that it can't be used as a tax avoidance vehicle for everyone - otherwise everyone will use it and then HMRC will apply a harsher regime as soon as they can.

[gables]

It's possible, although I'd be less concerned about this as HMG needs to be careful about legislating in a discriminatory way (e.g. targeting businesses based on size) and they are unlikely to institute the FLC as a tax efficient structure. If HMG are going to buy into the FLC, they'll need to be convinced that it isn't an avoidance vehicle; subject to this, the optics of targeting a structure labelled as a "freelancer" aren't great, especially if the tax advantages are marginal. If it's a half-arsed structure that becomes the de facto standard for working via an agency (which is a possible outcome), and the tax incentives are worthwhile, then I would tend to agree with you, but I don't think the latter is likely, otherwise the entry criteria would need to be impossibly tight and there would be no incentive for anyone involved. If the FLC goes ahead, it will be limited liability PAYE, essentially.

Which you can already do.... and I know I keep saying it, but why not 'limited sole trader' for want of a better term, it'll increase the tax revenue without decimating the net income to the contractor

[Zero Liability]

I'm not sure it will be at that level - because that would be worse than being inside IR35 in a limited company.

Only if it would involve paying ErNI out of your turnover.

[jamesbrown]

I'm not sure it will be at that level - because that would be worse than being inside IR35 in a limited company. Maybe closer to limited liability self-employed rates, but who knows what the rates will be.

But anything that is too punitive will mean that there is low take-up. And anything that is too generous will need to have very strict entry criteria to ensure that it can't be used as a tax avoidance vehicle for everyone - otherwise everyone will use it and then HMRC will apply a harsher regime as soon as they can.

Yes, and we can speculate about the level of the trade-off all day, but I don't think it's even on the table. I think the more fundamental issue is how the structure deals with the problem of disguised employment. Of course, all categories of self-employed worker are subject to legislation on disguised employment, only the implications and liabilities are different for sole traders and bodies corporate. If you can handle the deeming criteria properly, the FLC is redundant anyway.

[mudskipper]

It's still an "if". IPSE have put their proposal forward - that's a long way from having it agreed in principle, negotiated, and introduced.

I'm still not a fan of the idea, but accept that more people are prepared to pay for certainty than I'd appreciated -although I do wonder what the people who wouldn't trade tax efficiency for certainty but do want a new corporate structure think they'll be getting.

[jamesbrown]

I'm still not a fan of the idea, but accept that more people are prepared to pay for certainty than I'd appreciated

That's only because "certainty" hasn't been defined yet. I'll trade you half a certainty for a constructive ambiguity

[MPwannadecentincome]

On this point can we call the FLC an utterly flawed plan, leave it and move back to trying to identify other methods and plans that may work...

I haven't followed this debate at all... seems like I don't need to if that is the summary of it lol

[jamesbrown]

I haven't followed this debate at all... seems like I don't need to if that is the summary of it lol

She'll be coming 'round the mountain when she comes. I assume. It could be an entirely different proposal, of course.

[LisaContractorUmbrella]

It seems to me that going down this road is 1. admitting that there is something wrong with having a single person Ltd Co (and operating tax accordingly) and 2. aligning contractors with sole traders. (I have asked, through an FOI request, how many of the 4.6 million are contractors - was promised an answer the day before yesterday but you know how it is .) I can see that it would be nice to have certainty that you're not going to get a visit from our friends at HMRC but wouldn't this sort of compromise by playing into HMG's hands?

[MrMarkyMark]

It seems to me that going down this road is 1. admitting that there is something wrong with having a single person Ltd Co (and operating tax accordingly) and 2. aligning contractors with sole traders. (I have asked, through an FOI request, how many of the 4.6 million are contractors - was promised an answer the day before yesterday but you know how it is .) I can see that it would be nice to have certainty that you're not going to get a visit from our friends at HMRC but wouldn't this sort of compromise by playing into HMG's hands?

Exactly. A wishy washy, rolling over, type of compromise...

For that reason I'm out .