Will contracting go out with a bang or a whimper?

[BolshieBastard]

Osbourne announce HMRC's intended screwing down of limited co expenses and dividend tax etc.

HMRC issues 'discussion document' to obtain views and opinions. HMRC receives views and opinions then totally ignores them.

Limited expenses for limited companies legislation enters the statute book circa April 2017. Mission accomplished.

Sorry to be blunt!

[ShandyDrinker]

Osbourne announce HMRC's intended screwing down of limited co expenses and dividend tax etc.

HMRC issues 'discussion document' to obtain views and opinions. HMRC receives views and opinions then totally ignores them.

Limited expenses for limited companies legislation enters the statute book circa April 2017. Mission accomplished.

Sorry to be blunt!

I really hope I'm wrong but unfortunately I think BB is right...

[cojak]

And so we return to the first post.

...or are things rarely as good or as bad as they first appear?

I'm just wondering about the consequences of the April tax changes going though virtually as-is. Let's face it - all of this consultation is so much window-dressing fluff. Lobbying by non-party-donating stakeholders in the recent past has been completely ignored.

What will happen to contractors, accountants, legitimate umbrellas, agencies and clients? And will those consequences happen over night or will it take a year or 2 to have an effect?

Or will things generally stay as they are?

I think that many contractors will go back to permiedom. Those in contracting will restrict themselves to contracts within commuting distance, or the day rate will be such that they'll take the hit but with a much depleted day rate.

[jamesbrown]

Osbourne announce HMRC's intended screwing down of limited co expenses and dividend tax etc.

HMRC issues 'discussion document' to obtain views and opinions. HMRC receives views and opinions then totally ignores them.

Limited expenses for limited companies legislation enters the statute book circa April 2017. Mission accomplished.

Sorry to be blunt!

Yes, except the T&S will be in the next Finance Bill, ready for April 2016, not April 2017 (anything on IR35 would likely be in the FB for April 2017).

[SunnyInHades]

I did a week last year that looked like this:

Mon - Thur (Client 1, Central London)
Fri - Mon (Client 2, Outer London)
Tue - Wed (Client 3, Hull)
Thur - Fri (Client 4, Northampton)

I stayed in three hotels and travelled most of the country - you're telling me that it's somehow unreasonable to claim tax relief on that travel?

I believe that type of arrangement will still allow claimable tax relief.
As I see it post 2016 doomsday, if Osborne won't budge..
Yipee, tax relief on travel/accommodation claimable: Client-Ltd, Client-SoleTrader
Boohoo, no tax relief on travel/accommodation claimable: Client-Agency-Ltd, Client-Agency-Umbrella-Employee, Client-Umbrella-Employee

[BoredBloke]

For those writing to their MP's, rather than simply pointing out the unfairness of removing T&S for contractors involved in working away from home, it might be an idea asking them to explain how their situation differs from ours....we both have jobs that take us away from home for long periods of time but MP's are allowed to claim T&S expenses but ours are being removed.

[BolshieBastard]

For those writing to their MP's, rather than simply pointing out the unfairness of removing T&S for contractors involved in working away from home, it might be an idea asking them to explain how their situation differs from ours....we both have jobs that take us away from home for long periods of time but MP's are allowed to claim T&S expenses but ours are being removed.

That wont get very far, trust me.

Hate to be the prophet of doom but I think this is virtually a slam dunk for the Government.

When you consider how many contractors act ignorant of IR35, stopping expenses will be something well off their radar.

On all the jobs Ive worked on, Ive been in the minority having to a, travel more than 30 minutes to work and b, stay away from home 4 nights a week.

at my current place, Id say a good 90% of contractor live within 30 minutes travel so the loss of travel expenses wont hit them (and that's not taking into consideration those who've been on site for more than 2 years so cannot claim anyway!).

[mudskipper]

For those writing to their MP's, rather than simply pointing out the unfairness of removing T&S for contractors involved in working away from home, it might be an idea asking them to explain how their situation differs from ours....we both have jobs that take us away from home for long periods of time but MP's are allowed to claim T&S expenses but ours are being removed.

Lisa posted points for a letter that included this
http://forums.contractoruk.com/futur...ml#post2138252

[Pherlopolus]

I believe that type of arrangement will still allow claimable tax relief.
As I see it post 2016 doomsday, if Osborne won't budge..
Yipee, tax relief on travel/accommodation claimable: Client-Ltd, Client-SoleTrader
Boohoo, no tax relief on travel/accommodation claimable: Client-Agency-Ltd, Client-Agency-Umbrella-Employee, Client-Umbrella-Employee

So, Another scenario...

I work

Client - Agency - Ltd

All my travel is ad-hoc in nature (and under my control) and is between 0 and 3 nights a week to cover the support of workshops at my clients clients offices (I have visited my clients site on 4 occasions over the last 9 months, generally for the collection of a laptop, or other administrative function. On average I am away from my own office (home) for less than 40% of the time so the 24 month rules wouldn't apply.)

I don't have a desk in either the client or clients client site (all work done in meeting rooms to support requirements gathering workshops), the majority of the actual work is undertaken at my own site (which happens to be my home office)

I work on a specified programme only, and is not BAU.
I have a badge which Identifies me as a third party supplier
I have client email which identifies me very clearly as being supplied by a third party supplier
I am not allowed to have office functions VIA BYOD (inc email on phone etc) due to security restrictions, although there are elements of the work I can (and have) done via cloud services with MyCo's laptop.
I am not expected to perform "employee" type functions (training etc) although I do have to fill in a time sheet for project tracking purposes.
and I don't think I am under any S,D or C (no line manager although we have a Team Leader who also a contractor, mainly as a SPOC) the majority of the team are contractors, and the clients client reviews and signs off the requirements.

In your example..

If I worked Direct - T+S
If I worked through Agency - No T+S


Whereas a BAU contractor who just happened to find a client and went direct would be able to claim T+S

Can of worms doesn't even begin to cover what they have opened :s

I have to wonder if Agencies are going to move to a more "Introduction" basis than "Margin", and a rise in smaller consultancy numbers, who could potentially field a small team of people capable of covering smaller projects (1 x PM, 2 x BA 1 x SA, outsource development/implement team -maybe another small Dev based consultancy) for a fixed fee/timescale

[d000hg]

For those writing to their MP's, rather than simply pointing out the unfairness of removing T&S for contractors involved in working away from home, it might be an idea asking them to explain how their situation differs from ours....we both have jobs that take us away from home for long periods of time but MP's are allowed to claim T&S expenses but ours are being removed.

I'm not sure this is even a comparable situation. For two reasons:

1)MPs are in full-time employment, and their employment contract allows claiming certain things back as expenses; every employer has slightly different policies so MPs for example don't get 1st-class train travel. By contrast we are operating as limited companies, or as freelancers, for multiple clients.

2)Travelling is a mandatory part of an MP's job. They cannot (I think) choose not to do it. By contrast, contractors choose where they work and live and do not have to take work which requires them to work away.

Not saying I agree with the T&S changes (I don't) just that "you get it, why can't we" is not a strong argument outside of Facebook meme graphics.