Will Hector come after Public Sector Contractors

[sal]

I'm just saying that IR35 is meant to catch disguised employees - if you're over a certain day rate then you're a specialist brought on for a project (in theory). The only problem is that this may affect the market in other ways.

Wasn't IR35 brought in part to combat the sprawl highly paid execs, producers etc. in the Music/TV/Video industry working as contractors to safe on their tax bill?

[gables]

I'm just saying that IR35 is meant to catch disguised employees - if you're over a certain day rate then you're a specialist brought on for a project (in theory). The only problem is that this may affect the market in other ways.

Ah I see what you mean but I have a more fundamental issue with IR35 anyway. No matter whether you're 'specialist, 'bau' or whatever in between (we could do without the snide bickering that sometimes goes on on here), we're not engaged under the same terms and conditions as employees and are therefore not employees 'disguised' or otherwise. IF we're to be taxed like employees then we should get the same rights; holidays, sickness, no need to pay employer's NI etc.

[LondonManc]

Wasn't IR35 brought in part to combat the sprawl highly paid execs, producers etc. in the Music/TV/Video industry working as contractors to safe on their tax bill?

Ah I see what you mean but I have a more fundamental issue with IR35 anyway. No matter whether you're 'specialist, 'bau' or whatever in between (we could do without the snide bickering that sometimes goes on on here), we're not engaged under the same terms and conditions as employees and are therefore not employees 'disguised' or otherwise. IF we're to be taxed like employees then we should get the same rights; holidays, sickness, no need to pay employer's NI etc.

Both good points and accepted.

So, what IR35 set out to do was to stop "permies" taking the mickey on taxation, yes?

gables, totally agree with you - I've suggested in the past on here that there should be a rights ticklist that indicates if you're inside or not - paid sick, paid leave, training, inclusive pension, redundancy, MoO, etc., where you cannot have more than 20% of those rights not considered to come with standard full time employment. I was simply throwing something else out there as an option.

I prefer the rights-based list because it means that your tax position is such that it reflects that you have to manage the risk of covering those rights yourself. I also book my own accommodation and have the choice of throwing £50 or £200 a night at a hotel as I see fit (also factoring in Mrs LM's reaction to the latter!).

So, to sal's point, how should the government tackle that?

[malvolio]

...

So, to sal's point, how should the government tackle that?

Recognise that being a freelance is a valid career choice.

And now work out how HMG will stop unscrupulous employers forcing people to be freelance to save on the costs of those rights and incidentals like guaranteed work and employers NICs... Not that easy, is it.

[BrilloPad]

Retrospection has been proven to work.

So yes they will.

[gables]

Recognise that being a freelance is a valid career choice.

And now work out how HMG will stop unscrupulous employers forcing people to be freelance to save on the costs of those rights and incidentals like guaranteed work and employers NICs... Not that easy, is it.

But I wouldn't have thought IR35 help the people being used as you suggest, it just penalises them no?

[LondonManc]

But I wouldn't have thought IR35 help the people being used as you suggest, it just penalises them no?

Quite probably, which is why malvolio is suggesting it isn't easy to put in one set of changes without them inadvertently having an unintended consequence elsewhere.

[eek]

Recognise that being a freelance is a valid career choice.

And now work out how HMG will stop unscrupulous employers forcing people to be freelance to save on the costs of those rights and incidentals like guaranteed work and employers NICs... Not that easy, is it.

It's very easy when the public sector changes are rolled into the private sector.

HMRC are you really sure about that decision? Really? Here's a potential tax investigation with £100,000 in additional tax due.
Clientco thinks for 2 seconds.

So that person is inside IR35 - thought as much

[MrMarkyMark]

It's very easy when the private sector changes re rolled into the private sector.

HMRC are you really sure about that decision? Really? Here's a potential tax investigation with £100,000 in additional tax due.
Clientco thinks for 2 seconds.

So that person is inside IR35 - thought as much

The thing is in certain industries they could lose out on the total tax take, finance and Insurance to take 2 examples.
They get and trouser the 20% VAT of every contractors invoice.

[eek]

The thing is in certain industries they could lose out on the total tax take, finance and Insurance to take 2 examples.
They get and trouser the 20% VAT of every contractors invoice.

Different section of the revenue. IR35 relates to income tax and national insurance.

VAT is Customs and Excise and while HMRC love the powers they grabbed when the too were merged together the two sections are still very separate.

The fact they make 14.5% neat profit on contractors in the banking sector will be well beyond the intellectual level of those who created this IR35 policy.