Public sector IR35 consultation launched

[malvolio]

That depends on the definition of business. HMGs new definition doesn't appear to leave much room for a sole director now does it?

As I said, the consultation doc does not see what most of us currently are as businesses .

I think you not answering my Q actually does answer it......there is no Model for the majority of us going forward .

There is, but persuading HMRC and HMG of that s the hard part. That work has been on-going for a while and will continue. It is being pressed very hard right now in the light of this biased and ignorant consultation.

As for us mere observers, 200,000 letters to our MPs might make them take notice, don't you think?

[youngguy]

There is, but persuading HMRC and HMG of that s the hard part. That work has been on-going for a while and will continue. It is being pressed very hard right now in the light of this biased and ignorant consultation.

As for us mere observers, 200,000 letters to our MPs might make them take notice, don't you think?

I appreciate you are in the inner magic circle and so see all this (allegedly), but I can only go on the consultation doc and I see no model for a solo contractor post April for the PS and (in my view) in any sector in a few years.

[youngguy]

Surely it's better to, with scrapping IR35 in mind, establish what they ACTUALLY want to achieve and talk to the likes of IPSE in terms of how it affects limited company contractors.

What are the drivers? Things like too many big clientco's avoiding employer NICs for permietractors (pts), too many pts not behaving like businesses while paying business tax rates rather than inside IR35 rates.

If you want to use limited co route, as said earlier, demonstrate that you're a limited company.
If you want to use an umbrella, then you get forced down the full PAYE route BUT you still get the two year rule on the expenses, but only when staying away/travelling a significant distance - no lunches, daily commute under, say 50, miles, etc.

There's as much a market for pts as there is for genuine contractors and the tax structures should reflect that, rather than any ridiculous tests. It should simply be umbrella for pts and limited co for contractors.

Yes! Just have more models. There should also be another rule for business with a certain turnover (say, £3m). How can it be right that I paid more tax than Fbook last yr!

[malvolio]

I appreciate you are in the inner magic circle and so see all this (allegedly), but I can only go on the consultation doc and I see no model for a solo contractor post April for the PS and (in my view) in any sector in a few years.

I'm not in any inner circle. I just pay attention. I certainly don't base my views on HMRC's publications.

[youngguy]

I'm not in any inner circle. I just pay attention. I certainly don't base my views on HMRC's publications.

What about your 'friends in high places' 'sharp end' 'behind closed doors' IPSE rhetoric??

Given HMRC are enforcing the rules and have confirmed their intention, it's a bit short-sighted to pay no attention to the documentation.

I will gladly thank you if you can point me to the publications I have not been paying attention to which show me a solo contractor model.

[LondonManc]

Yes! Just have more models. There should also be another rule for business with a certain turnover (say, £3m). How can it be right that I paid more tax than Fbook last yr!

I'd just think that models are better than tests.

Pick the appropriate model, prove that it fits how you operate and get on with it.

[teapot418]

I think the best thing we can all do is respond to the consultation with the following arguments

1) The whole premise is flawed - the Alexander report showed that 90% of gov depts were compliant with the requirements to ensure that off payroll workers are paying the correct tax. If there is 90% non-compliance, why are HMRC not winning 90% of IR35 investigations?

2) The reaction will be 'risk adverse' - there will be a blanket 'everybody caught' rule. Evidence for this is already here - the MoD insisting that everyone is caught is a reaction to being one of the departments fined from the Alexander review. HMRC's own research doc confirms that the reaction will either be to put everyone inside, or give the work to consultancies.

3) Given the above, there will be a big impact on the availability of flexible resources. Again, this is expressed in the research. We are already seeing contractors turning down PS contracts because of the uncertainty.

4) This will cost the public sector - they will be paying consultancies a multiple of the rate of a 'PSC' for the same worker. Where's this extra money going to come from?

5) Talking about 'fairness' - how is it fair that someone who pays employee taxes will not get employee benefits?

I'm sure there's more, but it's home time

[youngguy]

I think the best thing we can all do is respond to the consultation with the following arguments

1) The whole premise is flawed - the Alexander report showed that 90% of gov depts were compliant with the requirements to ensure that off payroll workers are paying the correct tax. If there is 90% non-compliance, why are HMRC not winning 90% of IR35 investigations?

2) The reaction will be 'risk adverse' - there will be a blanket 'everybody caught' rule. Evidence for this is already here - the MoD insisting that everyone is caught is a reaction to being one of the departments fined from the Alexander review. HMRC's own research doc confirms that the reaction will either be to put everyone inside, or give the work to consultancies.

3) Given the above, there will be a big impact on the availability of flexible resources. Again, this is expressed in the research. We are already seeing contractors turning down PS contracts because of the uncertainty.

4) This will cost the public sector - they will be paying consultancies a multiple of the rate of a 'PSC' for the same worker. Where's this extra money going to come from?

5) Talking about 'fairness' - how is it fair that someone who pays employee taxes will not get employee benefits?

I'm sure there's more, but it's home time

Just my tuppence:-
1 and 2 lost already .

3,4,5 should be the focus. More figures, more stats. Media like that, the register picked up the contractor calculator £115m extra cost.

Also, in a yr if I work in the public sector as a PSC I get taxed as an employee ....if I do the same in private sector I am taxed as a Ltd. How is that fair and equal?

Nb: I am aware my last point could lead to the creep to the private sector. The HMRC divide and conquer is quite clever. Private contractors don't care about the changes right now. A yr or two down the line PS contractors won't care when the scope increases as they will see it as 'fair' by then given the tax they've been paying.

[malvolio]

What about your 'friends in high places' 'sharp end' 'behind closed doors' IPSE rhetoric??

Given HMRC are enforcing the rules and have confirmed their intention, it's a bit short-sighted to pay no attention to the documentation.

I will gladly thank you if you can point me to the publications I have not been paying attention to which show me a solo contractor model.

I'm not doing your research for you, it would take too long. My rates, however, are quite reasonable...

For the last time I have no privileged access to anything and haven't for a few years now. Gaining that access is very simple, it just takes a little willingness to join in the fight. I've not said anything that isn't in the public domain somewhere (in fact, I never have, if you were paying attention) but one source should be immediately obvious.

And you are still apparently missing the point that HMRC's documentation on this has been written from their perspective that everyone is a disguised employee by people who are stuck in the world of steelworks and coal-fired engineering companies in Birmingham. As we all know, that is not even remotely the case

[youngguy]

I'm not doing your research for you, it would take too long. My rates, however, are quite reasonable...

For the last time I have no privileged access to anything and haven't for a few years now. Gaining that access is very simple, it just takes a little willingness to join in the fight. I've not said anything that isn't in the public domain somewhere (in fact, I never have, if you were paying attention) but one source should be immediately obvious.

And you are still apparently missing the point that HMRC's documentation on this has been written from their perspective that everyone is a disguised employee by people who are stuck in the world of steelworks and coal-fired engineering companies in Birmingham. As we all know, that is not even remotely the case

Oh dear .....you do talk twaddle!

You have made statements and when I ask you cannot back them up. (I won't waste time in the professional forum digging out your quotes about this).

That Sir, speaks volumes.

You are missing the point. HMRCs view is not correct...but that doesn't matter. They have been clear about what they want and their point of view. You seem to think logic and justice will prevail.....