ICAEW responds to proposed travel & subs changes.

[jamesbrown]

Really good response but I am surprised that they suggested putting the tax liability with the agency, rather than the end client, in the even of non-compliance; surely the only party able to determine whether or not there will be SDC is the person who will be doing the S'ing, D'ing and C'ing?

To which response and paragraph number are you referring? I've only read the IR35 response so far, but I didn't see anything about that, only that it will be inherently difficult for the engager to determine the correct liability, especially with an agency in the chain...

[Zero Liability]

She's referring to the T&S piece and specifically:

20. Having made the agencies responsible for the operation of PAYE, and having done so on the basis that their business is the sourcing of labour, it is inappropriate to make the engager
responsible; it is anomalous – and excessively complicated – to pass this liability by transfer of debt on to the engager. It more naturally sits with the agency, and we suggest that it sits there
rather than with the engager except in cases where there is no agency. That would be complicated but less anomalous and more readily comprehensible.

I suppose a box ticking exercise gives HMRC a place to start

It might but it could end up being as useless as the "PSC" question on the SATR, or abused given how such a complex question is really not amenable to a tick box. I guess they're suggesting it as a substitute to blanket assumption of SDC but is getting the agency or even the end client to tick a box (and what if they don't tick it "correctly?) any better, especially given all the arguments they've put against the idea?

[LisaContractorUmbrella]

To which response and paragraph number are you referring? I've only read the IR35 response so far, but I didn't see anything about that, only that it will be inherently difficult for the engager to determine the correct liability, especially with an agency in the chain...

Point 20:

Having made the agencies responsible for the operation of PAYE, and having done so on the
basis that their business is the sourcing of labour, it is inappropriate to make the engager
responsible; it is anomalous – and excessively complicated – to pass this liability by transfer of
debt on to the engager. It more naturally sits with the agency, and we suggest that it sits there
rather than with the engager except in cases where there is no agency. That would be
complicated but less anomalous and more readily comprehensible.

[Zero Liability]

Twice for emphasis.

[LisaContractorUmbrella]

She's referring to the T&S piece and specifically:






It might but it could end up being as useless as the "PSC" question on the SATR, or abused given how such a complex question is really not amenable to a tick box. I guess they're suggesting it as a substitute to blanket assumption of SDC but is getting the agency or even the end client to tick a box (and what if they don't tick it "correctly?) any better, especially given all the arguments they've put against the idea?

I agree - it would be an utterly pointless exercise unless it was included in the reporting requirements; then, from HMRC's point of view, it would flag any claims of workers being outside SDC which would give them a target for the first test cases. I can't see any benefit to anyone else in doing it.

[LisaContractorUmbrella]

Twice for emphasis.

oops missed that

[Zero Liability]

I agree - it would be an utterly pointless exercise unless it was included in the reporting requirements; then, from HMRC's point of view, it would flag any claims of workers being outside SDC which would give them a target for the first test cases. I can't see any benefit to anyone else in doing it.

Yup, which goes against the grain of the rest of their reply. It's the only part that really stuck out as bizarre.

oops missed that

To be fair, I abuse the edit button.

[jamesbrown]

Point 20:

Having made the agencies responsible for the operation of PAYE, and having done so on the
basis that their business is the sourcing of labour, it is inappropriate to make the engager
responsible; it is anomalous – and excessively complicated – to pass this liability by transfer of
debt on to the engager. It more naturally sits with the agency, and we suggest that it sits there
rather than with the engager except in cases where there is no agency. That would be
complicated but less anomalous and more readily comprehensible.

OK, thanks, that must be in the T&S response. This is not suggested in the IR35 response, AFAIK.

[Danglekt]

i think their IR35 response is very good indeed.