• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

Treasury response to "Don't extend IR35 reforms to Private sector" petition (no news)

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    Treasury response to "Don't extend IR35 reforms to Private sector" petition (no news)

    The Government has responded to the petition you signed – “Do not extend IR35 legislation to the private sector.”.

    Government responded:

    The government will consult on how to tackle non-compliance with the off-payroll working rules in the private sector, drawing on the experience of recent public sector reform.
    The Government recognises that many individuals choose to work through their own limited company. There are many legitimate, commercial reasons for people to do this and for businesses to engage them in this way. The off-payroll working rules, more commonly known as IR35, have been in place since 2000 to ensure that, where individuals would have been employees if they were providing their services directly, they pay broadly the same tax and National Insurance as other employees. It is fair that two individuals doing the same job in the same way pay broadly the same tax and National Insurance, even if one of them structures their work through a company.

    As highlighted by reports from the Office of Tax Simplification and the House of Lords, it is clear that IR35 is not effective enough. To improve compliance, the Government introduced reforms in the public sector from April 2017. Individuals working through their own company in the public sector are no longer responsible for operating the off-payroll rules. Instead, where an individual’s company is directly engaged by a public sector body, the public sector body is responsible for determining whether or not the rules apply, and deducting any necessary employment taxes on payments to the individual’s company. Where this engagement takes place through an agency, the public sector body is responsible for determining whether or not the rules apply and informing the agency of this decision, in order that any necessary employment taxes can be deducted by the agency.

    This is not a new tax on the self-employed. IR35 only applies to those who work like employees and would have been employed were they not working through a company. Genuinely self-employed individuals continue to be unaffected, as has been the case for over 15 years.

    The Government is monitoring the impact of its reform of IR35 in the public sector. Initial evidence suggests that it has been successful in improving compliance. More people working through their own company are paying the right tax. However, the cost of non-compliance in the private sector is still growing and will cost taxpayers £1.2 billion a year by 2022/23. Therefore, a possible next step would be to extend these reforms to the private sector.

    To take account of the needs of businesses and individuals who would implement any change, the Government will carefully consult on reform in the private sector, drawing on the experience of the public sector reforms, including through external research due to be published in the new year.

    HM Treasury

    #2
    Originally posted by matzie View Post
    the government has responded to the petition you signed – “do not extend ir35 legislation to the private sector.”.

    Government responded:

    Ha! Finally we nailed you. You got away with it for nearly 18 years. Consider yourself very fortunate.
    hm treasury
    Ftfy. Hth. Bidi.
    Public Service Posting by the BBC - Bloggs Bulls**t Corp.
    Officially CUK certified - Thick as f**k.

    Comment


      #3
      Yawn...

      Say IR35 extension takes place in 2 years.

      Is it fair that someone paying the same tax, has no holiday pay, pension, training, redundancy, job security and has to work longer Hours.....?

      Comment


        #4
        Originally posted by Joolsey86 View Post
        Yawn...

        Say IR35 extension takes place in 2 years.

        Is it fair that someone paying the same tax, has no holiday pay, pension, training, redundancy, job security and has to work longer Hours.....?
        Yawn........ When you become a temporary employee, sure, I'm guessing you will get all those things. It'd be illegal not to eh? Though redundancy, I'd doubt since a temporary employee wouldn't usually be there long enough. Would they?
        Last edited by Fred Bloggs; 1 December 2017, 09:02.
        Public Service Posting by the BBC - Bloggs Bulls**t Corp.
        Officially CUK certified - Thick as f**k.

        Comment


          #5
          Another aspect which may have been ignored.

          If this goes ahead, then it will put more pressure on the permanent market, and contractors are generally more driven and in many cases higher qualified, and may start to push out long term permies from the permanent market.

          This could lead to the Contractor market changing from a highly skilled worker confident in themselves, to essentially a TEMP market for those who cannot get a permanent position.

          Comment


            #6
            Originally posted by Joolsey86 View Post
            Another aspect which may have been ignored.

            If this goes ahead, then it will put more pressure on the permanent market, and contractors are generally more driven and in many cases higher qualified, and may start to push out long term permies from the permanent market.

            This could lead to the Contractor market changing from a highly skilled worker confident in themselves, to essentially a TEMP market for those who cannot get a permanent position.
            There was only one aspect considered.

            HMRC do not understand technology and think we are glorified typists. They have told their underlings(parliament) to throw us under a bus.

            Comment


              #7
              No, it's not actually fair for a contractor to pay the same tax as an employee doing the same job.

              It seems to me that this premise by the government is intentionally (or ignorantly) failing to highlight the key differences in employee's favour.

              Job safety for one(debatable but comparably contracting is far less secure), being out of contract hence lack of income, holiday and sick pay, entitlement to benefits - among others. All these differences do equate to a financial amount, and hence applying same rules is actually NOT fair.

              I hope the government and the consultation do take these fundamental differences into account.

              Comment


                #8
                Originally posted by Joolsey86 View Post
                Another aspect which may have been ignored.

                If this goes ahead, then it will put more pressure on the permanent market, and contractors are generally more driven and in many cases higher qualified, and may start to push out long term permies from the permanent market.

                This could lead to the Contractor market changing from a highly skilled worker confident in themselves, to essentially a TEMP market for those who cannot get a permanent position.
                Outside the UK, that is pretty much how it works already. Even in the UK, the highly professional contractor who contributes greatly to the client business very often has to rehearse how to say "no thank you" to the client manager who tries to "reward" the contractor with the offer of employment.
                Public Service Posting by the BBC - Bloggs Bulls**t Corp.
                Officially CUK certified - Thick as f**k.

                Comment


                  #9
                  Originally posted by Fred Bloggs View Post
                  Outside the UK, that is pretty much how it works already. Even in the UK, the highly professional contractor who contributes greatly to the client business very often has to rehearse how to say "no thank you" to the client manager who tries to "reward" the contractor with the offer of employment.
                  Haha, been there, done that. Last time about 3 weeks ago

                  Comment


                    #10
                    Originally posted by amrhady View Post
                    No, it's not actually fair for a contractor to pay the same tax as an employee doing the same job.

                    It seems to me that this premise by the government is intentionally (or ignorantly) failing to highlight the key differences in employee's favour.

                    Job safety for one(debatable but comparably contracting is far less secure), being out of contract hence lack of income, holiday and sick pay, entitlement to benefits - among others. All these differences do equate to a financial amount, and hence applying same rules is actually NOT fair.

                    I hope the government and the consultation do take these fundamental differences into account.
                    And yet I look at the gig economy or Sports Direct and see people on zero hour contracts or worse who are paying tax like employees and yet don't have any more rights than we do.
                    merely at clientco for the entertainment

                    Comment

                    Working...
                    X