What is everyone going to do assuming HMR&C and Osborne get their way?

[DaveB]

Purchase Order 60 units - expert engineering consultancy

unit = 1 day

cost £500 / unit

Simples

Which is eactly how it should work. Substitute <area of expertise> for "Expert Engineering" and it can be aplied to almost anything. It's how I deal with my direct clients as well.

[jamesbrown]

Which is eactly how it should work. Substitute <area of expertise> for "Expert Engineering" and it can be aplied to almost anything. It's how I deal with my direct clients as well.

People will be looking for loopholes instantly, which is another reason I think they'll go with SDC as the test after a one-month grace period (intended to help big businesses engaged in short-term contracting), thereby scaring any sane client. However, if they go with a draconian approach, it will probably be super draconian with a side order of Dark Ages. It's easy to write this in terms of having done work for one client that spans more than a calendar month period within a 12 month period, for example. They aren't completely stupid. They also have the GAAR.

[Zero Liability]

Do you think if it is a status reporting requirement that 1 month is the lower bound of what they're contemplating? Personally, I wouldn't be surprised if it ended up being 6 months.

[jamesbrown]

Do you think if it is a status reporting requirement that 1 month is the lower bound of what they're contemplating? Personally, I wouldn't be surprised if it ended up being 6 months.

Possibly, but I think there's less incentive to do this when it's viewed as a lower bound versus an upper bound (one month would be totally unworkable as an upper bound). If it's the latter, I think it will probably be 6 or maybe even 12 months in practice. If it's the former, it will be lower (probably one month, as quoted). However, it's worth bearing that 90% figure in mind (FWIW) and the fraction of contractors whose contracts are, say, less than 6 months, which is high. As I say, my best guess is a lower bound for testing, followed by an SDC test (or some other test) that is pretty tight, which has the merit of being vaguely targeted. There are internal inconsistencies wherever you look though, so we're just killing time...

[webberg]

It's worth remembering that for a number of tax tests there is an informal (sometimes legislative) 24 month rule in place.

I think there's no particular magic to that period and no particular reason to apply it here but it would have a certain resonance.

My personal view is that a one month period presents a number of practical challenges for all parties. Quite how that might work with RTI and other PAYE rules in particular could be a problem.

[jamesbrown]

It's worth remembering that for a number of tax tests there is an informal (sometimes legislative) 24 month rule in place.

I think there's no particular magic to that period and no particular reason to apply it here but it would have a certain resonance.

My personal view is that a one month period presents a number of practical challenges for all parties. Quite how that might work with RTI and other PAYE rules in particular could be a problem.

Not really if it's a lower bound after which a test applies. In that case, you'd effectively know upfront whether a contract would pass/fail (and the contract length wouldn't matter, accommodating part-time and fixed price contracts etc.), which is a good thing, in principle. As I say, I can't see a one month rule working as an upper bound to avoid a payroll position or, at least, that anyone would be willing to entertain this in practice. In other words, it wouldn't present a problem at all, because very few people would consider it. Of those left on short-term contracts, you'd have one group on very short-term contracts (no change) and another group on FTCs, which are already used extensively for whatever lengths of time are appropriate. The rest would become regular employees. Likewise, I struggle to see a rule on concurrent contracts working in practice unless withholding is used upfront and over-payments reclaimed later (e.g. offset against CT), because no client would be aware of your wider operation.

[billybiro]

a perm job with lots of benefits and training etc.

Do these even exist any more?

I'm finding more and more permie people's jobs are just as lacking in benefits and training as the average contractor!

i.e. "Training" is expected to be done by the employee, on their own time and at their own expense - this is especially prevalent in my field of software development. So much so that I've known of permie interviews specifically asking what the candidate does to keep their own skills up to date (implying that the company wants candidates with skills that are kept current but that they have no intention of being the ones to provide that).

[Danglekt]

They do for the right role - very nice company car, health ins, funded masters with release days, reasonable pension contributions, decent holiday entitlements.

These are all in the art of negotiation if you are the right candidate for a FT role, if you just scrape in then obviously you have less chance of having that discussion, and instead get the company norm, which can be very variable - but some are still good.

[LisaContractorUmbrella]

I think the one month thing is a bit of a red herring - if we think about the tools that HMRC have now: agency reporting requirements and RTI, they pretty much know who is working for which agency and via which tax vehicle within one month of the contract starting (or thereabouts) so it would be logical for them to ask for a declaration of status within the same period - then they have all the pieces of the jigsaw in one go. Just a thought

[webberg]

In the thread dealing with responses to the discussion document, I shared the fact that we put forward a time based test on the grounds that in many ways it is easy to measure and apply.

A number of commentators pointed out flaws and problems with that approach. Don't have an issue with that but it might be worth reviewing that thread and applying some of the lessons in this debate?