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

[eek]

See today's Sunday Times - https://www.thetimes.co.uk/edition/b...cers-9bm6lsjs6

No mention of IPSE instead its Julia Kermode of of the Freelancer and Contractor Services Association the BMA and someone at EY stating its a bad idea...

But unless they remove the escape route the public sector will continue to have a recruitment problem so sharing the pain is the way its going to go...

[cojak]

It’s behind a paywall but I can imagine the article.

[ShandyDrinker]

Sadly I think this is the way that it will go. Perhaps I'm wrong but having watched this and other forums over the last 12 months or so since the announcement of and public sector rollout I get the feeling that many have lost the will to fight on this issue.

I know that I'll be writing to my MP yet again but accept it will have little impact as the usual response from the relevant ministers is not encouraging.

I really do hope that if Hammond and co are stupid enough to go through with it that the UK will lose the flexible workforce it seems to have come to rely on. Just look at many of the financial services companies in the City, for example.

While the short term tax gain may be good for the Treasury, I can't help but feel the long term repercussions will be potentially worse.

[jamesbrown]

This isn’t remotely surprising, and it’s inevitable in the long-term, but it should be viewed as a trial balloon at this point in the cycle. Depending on the pushback from backbenchers (who will be lobbied, heavily) they may not do it. The Chancellor is in a weak position anyway. But it’s the clearest signal yet that they want to do it. All those commenting in the article reflect on the implementation in the PS as being a disaster.

[jamesbrown]

I assume it’s OK to quote in full when referenced. Source:

https://www.thetimes.co.uk/edition/b...cers-9bm6lsjs6

The chancellor is considering a £1bn raid on freelance workers in a new blitz against “disguised employment” in the private sector.

The mooted crackdown could force businesses to add tens of thousands of self-employed staff to their payroll, driving up their tax bills.

The move — which could be unveiled by Philip Hammond in next month’s budget — is aimed at levelling the playing field between salaried staff and freelancers, who enjoy significant tax advantages if they work as independent contractors.

But it would also hand a cash boost to Hammond, who is scrambling to fund public sector pay rises and to increase spending on the NHS and social care. The stagnant economy leaves little scope for giveaways. Earlier this month, the Office for Budget Responsibility warned that weak productivity levels would hit future tax receipts.

The Treasury is targeting IT contractors, consultants and other freelancers who are paid through “personal service companies”. Currently, it is up to the workers to pay the correct personal tax and national insurance contributions. HM Revenue & Customs believes that most of them do not comply in full.

About 450,000 people earn most of their income through personal service companies, figures from the Office for National Statistics suggest. It is unclear how many the change would affect.

A clampdown would shift the onus to employers, to ensure workers do not avoid tax. Those deemed not to be genuine freelancers would have to be put on the payroll. That would drive up revenues for HMRC, which typically collects more from a salaried employee than a contractor in an equivalent role. Freelancers risk losing a chunk of their take-home pay.

In April, similar reforms were introduced for public-sector workers. HMRC expects to reap an extra £265m in the current tax year as a result. Last week, the Treasury said that public bodies added 90,000 people to their payroll in the three months from April to June. Most had been working as contractors.

The British Medical Association has branded the switch an “administrative disaster” for the health service. Chris Sanger, head of tax policy at EY, said ministers should “fix the problems faced by those operating the new rules” before extending them to the private sector.

Julia Kermode, head of the Freelancer and Contractor Services Association, said: “It has been shambolic. We’ve seen skills shortages in public bodies because they have lost such huge numbers of contract workers.”

The Treasury declined to comment.

[jamesbrown]

More detailed article in the FT with various figures quoted, including 90,000 that have apparently stopped using PSCs in the PS (presumably including those that now use schemes).

https://www.ft.com/content/fc02936c-...b-4a9c83ffa852

What’s more interesting about this article is that it directly quotes Mel Stride, Financial Secretary to the Treasury on “fairness”.

The article moots 22 November for a consultation () and April 2020 for implementation.

I enjoyed this quote...

Minutes from a July meeting involving HMRC and industry experts said there had been “no evidence of significant impact on attrition rates of contractors working in the public sector”.

The way they operate would be hilarious if it weren’t serious.

[eek]

More detailed article in the FT with various figures quoted, including 90,000 that have apparently stopped using PSCs in the PS (presumably including those that now use schemes).

https://www.ft.com/content/fc02936c-...b-4a9c83ffa852

What’s more interesting about this article is that it directly quotes Mel Stride, Financial Secretary to the Treasury on “fairness”.

The article moots 22 November for a consultation () and April 2020 for implementation.

I enjoyed this quote...


The way they operate would be hilarious if it weren’t serious.

Equally from the FT article so you can see where the examples will come from to justify this....

It would also affect many people with relatively low-paid jobs who sell their work through companies, including receptionists, credit controllers, telephonists and chambermaids.

Once again an interest choice of people quoted and not quoted...

also I don't think this is a trial balloon - I suspect (as I have for a while) that this is a done deal.

[jamesbrown]

Once again an interest choice of people quoted and not quoted...

Yep, they will spin this to within an inch of its life.

It just depends whether Lurch can get it through. There's a good chance he can't, given his personal credibility on the backbenches. Obviously, the big four won't mind, but many big businesses (CBI, BCC, IoD etc.) will lobby hard against this, as they did in 1999, especially with Brexit on the agenda for 2018/19.

[eek]

Yep, they will spin this to within an inch of its life.

It just depends whether Lurch can get it through. There's a good chance he can't, given his personal credibility on the backbenches. Obviously, the big four won't mind, but many big businesses (CBI, BCC, IoD etc.) will lobby hard against this, as they did in 1999, especially with Brexit on the agenda for 2018/19.

By pushing this through as part of the Taylor report changes - it will sail through with Labour support, which is why it's now and not next year...

[cojak]

I thought this from the beginning of this sub-forum.

I made my decision July 2015.