November 22nd - The death of contracting as we know it

[eek]

I thought public sector changes were tax deducted at source so you can't pay a company pension anymore.

You can be paid via an umbrella in which case the umbrella will receive the full amount before deductions...

[starstruck]

You can be paid via an umbrella in which case the umbrella will receive the full amount before deductions...

Ah I see, and umbrella will allow company pension payments I assume.

[northernladuk]

Ah I see, and umbrella will allow company pension payments I assume.

Company payments?

[eek]

Ah I see, and umbrella will allow company pension payments I assume.

Some (Contractor Umbrella) will allow any salary above the living wage to be paid directly into a pension scheme (it would need to be the umbrella's scheme) and then transferred out to yours....

[jamesbrown]

Interestingly a couple of umbrella companies think announcement November 22nd for April 2018...

They would say that (sooner the better for them).

I can't see it.

If they do, expect chaos; I mean, chaos upon chaos.

[starstruck]

Some (Contractor Umbrella) will allow any salary above the living wage to be paid directly into a pension scheme (it would need to be the umbrella's scheme) and then transferred out to yours....

So they won't make employer contributions into your SIPP?

[poorautojobber]

CEST tool always assumes MOO can't even believe HMRC would admit this in public.

https://www.accountingweb.co.uk/tax/...isses-key-test

How would this ever standup in front of a judge?

[TheFaQQer]

They would say that (sooner the better for them).

I can't see it.

If they do, expect chaos; I mean, chaos upon chaos.

Would HMRC have time to completely scrap and rewrite CEST so that it references case law (or even just RMC would be a start)?

[jamesbrown]

Would HMRC have time to completely scrap and rewrite CEST so that it references case law (or even just RMC would be a start)?

CEST is a flawed concept, in my view, quite apart from the implementation. I don't think this sort of service is deliverable. Were it to come in front of a judge, it would be completely ridiculed. I think its only value is to document an outside position when it's supportive and the information has been entered correctly (i.e. to use it against them), because HMRC have said they will follow that decision (whether they will, is debatable, but it is useful to have it documented).

Perhaps we'll get to a point where machine learning/AI can operate in the way a qualified expert (and, subsequently, a tribunal judge) would consider working practices "in the round", as required by case law. I think we're a long way from that. The algorithm used by ContractorCalculator appears superficially better, because it produces the expected outcome for many historical cases, but whether it is over-fitting the sample data is another matter (I bet it is).

Bottom line, the only thing I would trust is the advice of an independent expert.

FWIW, I don't think the private sector will pay much attention to CEST, because they'll take legal advice, and that advice will be: don't use CEST. HMRC have leverage with the PS, but not the private sector. What the private sector will do instead will inevitably vary, but I expect things won't change much for companies that genuinely wants freelance services rather than disguised permies. In other cases, I'd expect a lot more FTCs.

[breaktwister]

If HMRC have conveniently ignored elements of the law (MoO) in creating CEST then why has there been no legal challenge issued? Is it because Hector claims it is only an "advisory" tool? They cannot claim it is only advisory but also claim to stand by the output/decision.