Hammond plans tax crackdown on 'synthetic self-employed'

[swamp]

And this is where the delinquency of HMRC shines through.

This is being driven by Treasury and Cabinet Office, not HMRC.

Someone claimed it would generate £400m extra tax in the public sector. And now after 18 months they are now claiming it has raised £410m. So the chance of an extra billion will be too hard to resist for Hammond. But the private sector will be a lot more savvy: they won't simply roll over and accept blanket assessments like the NHS.

[Big Blue Plymouth]

And they'll start scrutinizing everyone they hire, and ensure their hires are following IR35 to the letter of the law.

In that case they won't be able to find people to do the job.

My current PS client has bent over backwards to ensure we're out of the scope of IR35. Struggling to get good people even then...
Edit: myself excepted, of course ;-)

[AtW]

Permanent job: £50k gives HMRC £13k tax/NI + £5.7k Employers NI, so a total of £19,700 tax

Contractor: £100k (with minimal salary and expenses) gives rise to 16.7k Corp Tax + 13k tax on dividends on full profit distribution. So a total of £29,700 tax

And this is where the delinquency of HMRC shines through.

Their gamble is that same contractor will have to accept £100k permie job or maybe even get higher rate, in either of those cases taxes would go up.

£100k permie job (based on PAYE calculator that I googled) will be £28k income tax, £5.6k employee NICs + £12.6k employer NICs = ~47k - good 50% more tax than in the example above (which could have included wife as 50% shareholder, so tax take would drop much further).

Anybody who thinks that HMRC will let that tax go is delusional.

Anybody who thinks that Employers will take on the risk of being liable for that extra tax is also delusional.

Massive increase in rates to compensate will be only available to a few very skilled and very lucky ones.

With Brexit coming there will be nowhere to go (without getting work permit first, which will be limited in most countries that pay top dollar for IT jobs).

[swamp]

Anybody who thinks that Employers will take on the risk of being liable for that extra tax is also delusional.

In most cases it will be the agency that is liable for IR35, not the client. But in many cases they will take the risk, just as they are taking that risk today in the public sector.

[sira]

I spoke with my agency on Friday. They reckon, most likely scenario is an increase in rates to offset the tax. Only one agencies view though, so take it with a pinch of salt.

D-day tomorrow. Brace yourselves.

Oh Hammond..

[AtW]

In most cases it will be the agency that is liable for IR35, not the client. But in many cases they will take the risk, just as they are taking that risk today in the public sector.

You should check contracts carefully - tax warranties section

[sira]

IR35 in 2020.

Anyone know what " for large and medium sized businesses" means? i.e only large/medium firms need to implement IR35?

[northernladuk]

IR35 in 2020.

Anyone know what " for large and medium sized businesses" means? i.e only large/medium firms need to implement IR35?

You could try asking the question in any of the other IR35 in 2020 threads that have started to discuss exactly this maybe?

[sira]

You could try asking the question in any of the other IR35 in 2020 threads that have started to discuss exactly this maybe?

Sorry master.

[Yorkie62]

IR35 in 2020.

Anyone know what " for large and medium sized businesses" means? i.e only large/medium firms need to implement IR35?

medium 100-999 employees

large over 250 employees and has grown beyond the limits of a medium-sized business. This definition of a large-sized enterprise is the one adopted by the United Kingdom's Department for Business Enterprise and Regulatory Reform for statistical purposes.