Employment status overview

[mudskipper]

I can't see a thread on this

Treasury ready to overhaul employment status :: Contractor UK

Includes letter from Gauke detailing which OTS recommendations are accepted and being considerd

https://www.gov.uk/government/upload...n_Measures.pdf

[jamesbrown]

The most noteworthy part is their concurrence in rejecting the "third way", at least for now (no. 27), which is essentially the FLC (noting that the OTS recommendations have been available for several months). Otherwise, I don't think it adds much clarity, beyond a few points of interest. In particular, the "rejection" of no. 16 (synergies between IR35 and OTS) leaves things completely open w/r to the approach taken for IR35 versus employment status more generally, including the possibility that any updates to the ESI may not be intended for IR35 status checks (as is currently the case). I doubt much will emerge until December 9, and even then...

ps. I think the absence of any reference to SDC or a de minimis rule for time (as opposed to money) is neither here nor there, esp. given the point on no. 16.

[mudskipper]

Agree - we knew back when the report was published that the OTS was not recommending a "third way" at this time.

[MarkT]

The most noteworthy part is their concurrence in rejecting the "third way", at least for now (no. 27), which is essentially the FLC (noting that the OTS recommendations have been available for several months). Otherwise, I don't think it adds much clarity, beyond a few points of interest. In particular, the "rejection" of no. 16 (synergies between IR35 and OTS) leaves things completely open w/r to the approach taken for IR35 versus employment status more generally, including the possibility that any updates to the ESI may not be intended for IR35 status checks (as is currently the case). I doubt much will emerge until December 9, and even then...

ps. I think the absence of any reference to SDC or a de minimis rule for time (as opposed to money) is neither here nor there, esp. given the point on no. 16.

Don't you think it could mean they do actually do something for 16/17 rather than 17/18? I'm wondering if they just say - all dividends via PSCs are now banned. The Only way to work is payroll (yours or someone else's) The get out being that you have more than one customer (client) in a 1 month period.

So 9th December it is! Never stops does it. Still, whatever, I'm more confident they'll not do something insane like above, but that ESI scares me.

[jamesbrown]

Don't you think it could mean they do actually do something for 16/17 rather than 17/18?

No, the reasons for a delay would be for other businesses to adapt, as much as PSCs.

I'm wondering if they just say - all dividends via PSCs are now banned.

There's no definition of a PSC, and none will be forthcoming, so they won't do anything that relies on a definition of a PSC. There's a definition of a close company, but that includes a much broader group, so it's effectively useless. Anyway, they've agreed that PSCs are perfectly legitimate, in principle.

Still, whatever, I'm more confident they'll not do something insane like above, but that ESI scares me.

Call me a cynic, but they'll probably do whatever they've been planning to do; they just weren't ready yet, for whatever reason. We're essentially no wiser than when the IR35 discussion and T&S consultation were released, but we've expended a lot of words on CUK All these letters to MPs and efforts in lobbying make feck all difference, as should be evident from the way many others (with a louder voice than ours) were hit in the AS. Incidentally, as well as the T&S changes, umbrellas (and hence their workers) are likely to be hit by the 0.5% apprenticeship levy.

[MarkT]

There's no definition of a PSC, and none will be forthcoming

Yeah - sorry I meant intermediary. Anyway I think you are probably right, even though it doesn't make a huge amount of sense when aligned to the new div tax. They probably will do whatever they were thinking of.

I do find it confusing about whether the OTS report is looking at IR35 or not though, it says they seemed to want to, proposed that they would, then the govt said no, so they are anyway. Effectively anyway....it's been a long week, so maybe I've got that half arsed....

[jamesbrown]

Yeah - sorry I meant intermediary. Anyway I think you are probably right, even though it doesn't make a huge amount of sense when aligned to the new div tax. They probably will do whatever they were thinking of.

I do find it confusing about whether the OTS report is looking at IR35 or not though, it says they seemed to want to, proposed that they would, then the govt said no, so they are anyway. Effectively anyway....it's been a long week, so maybe I've got that half arsed....

An intermediary is a generic entity that falls in between a worker and an engager; it could be an individual, partnership or company. People often don't realise that the Intermediaries Legislation is defined quite broadly, certainly beyond PSCs.

The OTS review never intended to include IR35 and it doesn't. The IR35 Forum considered this. However, everyone understands that the two are unavoidably linked and, more generally, that employment and tax status need to be better aligned. However, there will be a lot of tinkering before anything substantial and permanent is implemented (such as the better alignment of employment and self-employment taxes and consistent application of employment and tax status). Without tinkering, politicians and civil servants would have feck all to do.

[MarkT]

No, the reasons for a delay would be for other businesses to adapt, as much as PSCs.



There's no definition of a PSC, and none will be forthcoming, so they won't do anything that relies on a definition of a PSC. There's a definition of a close company, but that includes a much broader group, so it's effectively useless. Anyway, they've agreed that PSCs are perfectly legitimate, in principle.



Call me a cynic, but they'll probably do whatever they've been planning to do; they just weren't ready yet, for whatever reason. We're essentially no wiser than when the IR35 discussion and T&S consultation were released, but we've expended a lot of words on CUK All these letters to MPs and efforts in lobbying make feck all difference, as should be evident from the way many others (with a louder voice than ours) were hit in the AS. Incidentally, as well as the T&S changes, umbrellas (and hence their workers) are likely to be hit by the 0.5% apprenticeship levy.

An intermediary is a generic entity that falls in between a worker and an engager; it could be an individual, partnership or company. People often don't realise that the Intermediaries Legislation is defined quite broadly, certainly beyond PSCs.

The OTS review never intended to include IR35 and it doesn't. The IR35 Forum considered this. However, everyone understands that the two are unavoidably linked and, more generally, that employment and tax status need to be better aligned. However, there will be a lot of tinkering before anything substantial and permanent is implemented (such as the better alignment of employment and self-employment taxes and consistent application of employment and tax status). Without tinkering, politicians and civil servants would have feck all to do.

Well, I've a plan to pay everything I owe off by Sept 2018, if I get that long at this, with these rules, I'll be happy (!)

[ShandyDrinker]

Call me a cynic, but they'll probably do whatever they've been planning to do; they just weren't ready yet, for whatever reason. We're essentially no wiser than when the IR35 discussion and T&S consultation were released, but we've expended a lot of words on CUK All these letters to MPs and efforts in lobbying make feck all difference, as should be evident from the way many others (with a louder voice than ours) were hit in the AS. Incidentally, as well as the T&S changes, umbrellas (and hence their workers) are likely to be hit by the 0.5% apprenticeship levy.

Not sure I agree with you. It's better that some of us did something like respond to the consultations, write to or visit MPs and so on. There are far too many apathetic contractors out there who will take no action and then whine when the changes impact them. Even if the end result is nothing, I'm glad I did something rather than just be a passenger.

I've little doubt this isn't over yet and as many others have said we'll have to wait and see what further announcements are made in the coming weeks/months.

[LisaContractorUmbrella]

No, the reasons for a delay would be for other businesses to adapt, as much as PSCs.



There's no definition of a PSC, and none will be forthcoming, so they won't do anything that relies on a definition of a PSC. There's a definition of a close company, but that includes a much broader group, so it's effectively useless. Anyway, they've agreed that PSCs are perfectly legitimate, in principle.



Call me a cynic, but they'll probably do whatever they've been planning to do; they just weren't ready yet, for whatever reason. We're essentially no wiser than when the IR35 discussion and T&S consultation were released, but we've expended a lot of words on CUK All these letters to MPs and efforts in lobbying make feck all difference, as should be evident from the way many others (with a louder voice than ours) were hit in the AS. Incidentally, as well as the T&S changes, umbrellas (and hence their workers) are likely to be hit by the 0.5% apprenticeship levy.

I have to say that I think your cynicism is well placed but it does read that their 'intention' is to give contractors a greater degree of certainty - whether they achieve it remains to be seen of course