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TheMrs
14th October 2015, 10:15
I've been reading up on the Agency Legislation and have made sure that my contracts always opt out of it. It strikes me that if the Govt reiew of IR35 follows suit then it would be a simple case of adding an opt out clause?

We are highly skilled oil and gas contractors running a 50 50 split Ltd (husband and wife and never get any guidance from client other than the scope of project, desired outcomes etc. Certainly nobody ever tells me how to actually 'do' my job or where or when (regularly work from home to fit around child care).

I just can't see where all the doom and gloom comes in. There is no way the Govt can automatically include every personal service Co in IR35 just by saying 'make it so'. There are myriad tests and therfore would need to be myriad ways of passing them. I wonder if a lot of the scare mongering is coming from IR35 insurers etc?

northernladuk
14th October 2015, 10:35
Simple case of adding an Opt out to IR35?? Really?

And yes the Gov can... and are attempting to do so to a large majority of us. I think you making light of a situation that could potentially be very bad. Instead of reading up on the opt in/out rules should you be reading the IR35 consultations instead? Makes for some fairly grim reading and I don't see any of the IR35 insurers making waves good or bad TBH.

LisaContractorUmbrella
14th October 2015, 10:36
You won't be able to opt-out any more than you can opt-out of IR35 as it stands now and there won't be a myriad of tests - there will be one - can you prove that no-one at client co has no right to supervise or direct or control you

jamesbrown
14th October 2015, 10:53
I've been reading up on the Agency Legislation and have made sure that my contracts always opt out of it. It strikes me that if the Govt reiew of IR35 follows suit then it would be a simple case of adding an opt out clause?

We are highly skilled oil and gas contractors running a 50 50 split Ltd (husband and wife and never get any guidance from client other than the scope of project, desired outcomes etc. Certainly nobody ever tells me how to actually 'do' my job or where or when (regularly work from home to fit around child care).

I just can't see where all the doom and gloom comes in. There is no way the Govt can automatically include every personal service Co in IR35 just by saying 'make it so'. There are myriad tests and therfore would need to be myriad ways of passing them. I wonder if a lot of the scare mongering is coming from IR35 insurers etc?

You're confused about the scope of the agency legislation versus the scope of IR35. The agency legislation doesn't apply to payments on which PAYE is operated or on dividends, which are not income from employment, and there are several other exclusions (such as work in the entertainment industry and work which is performed wholly at a location that is not under the control of the client). The IR35 legislation is far-reaching and is specifically designed to prevent any tax advantage through dividend payments when the relationship looks like one of employment. There is no "opting out" of IR35, and I'm quite stunned that you would even entertain this as being possible.

This isn't the same situation as 1999 when a lot of the exaggerations were more easily dismissed (often linked to those with vested interests), although I do think some of that applies to the arguments about SDC specifically. The difference here is that the main proposal is to have engagers determine status, and that is much less likely to end well (for anyone in the contracting industry).

Danglekt
14th October 2015, 11:31
You won't be able to opt-out any more than you can opt-out of IR35 as it stands now and there won't be a myriad of tests - there will be one - can you prove that no-one at client co has no right to supervise or direct or control you


Too many no's in that description I think it should read:


"can you prove that no-one at client co has the right to supervise or direct or control you"

DonkeyRhubarb
14th October 2015, 11:41
Is the OP confusing different agency regs?

There are the agency regs that you can opt out of (EU stuff?) but these are totally separate to the Agency Legislation which applies to false self-employment.

TheMrs
14th October 2015, 12:58
I'm not making light of anything. I just can't see how clients can be forced to agree that they exercise S D or C if they don't and never have.

My clients have always, without exception, retained MyCo on the basis of a contract which expressly states they will not SD or C how I work, I have full sub rights no moo, no notice period etc etc. All of which fully backed up by my working practices. We are an independent contracting business which happens to supply people instead of widgets. Surely you can't just suddenly become a disguised employee because the Revenue would like more money....

I agree clients want a quiet life but they also want a flexible highly skilled contracting pool to call on when required. Not yet another expensive employee they are stuck with through good times and bad.

fidot
14th October 2015, 13:51
I'm not making light of anything. I just can't see how clients can be forced to agree that they exercise S D or C if they don't and never have..

You've missed the bit where the end client is liable for penalties if they get the determination wrong. Do you really believe your clients are prepared to risk that?

LisaContractorUmbrella
15th October 2015, 06:41
Too many no's in that description I think it should read:


"can you prove that no-one at client co has the right to supervise or direct or control you"

You're right it should

gables
15th October 2015, 09:22
You've missed the bit where the end client is liable for penalties if they get the determination wrong. Do you really believe your clients are prepared to risk that?

But who actual determines the final result? If HMRC ask ClientCo is a contractor under SDC, and they say no, isn't that it determined? I mean, HMRC can't then say, well we determine it differently. And if they can what is that based on?

LisaContractorUmbrella
15th October 2015, 09:56
But who actual determines the final result? If HMRC ask ClientCo is a contractor under SDC, and they say no, isn't that it determined? I mean, HMRC can't then say, well we determine it differently. And if they can what is that based on?

Not if it says in the contract that Clientco retain a right to SDC or if they ask for work schedules and find that the contractor was being told what to do and when

gables
15th October 2015, 11:47
Not if it says in the contract that Clientco retain a right to SDC or if they ask for work schedules and find that the contractor was being told what to do and when

If it's in the contract I get, and 'the right of' is, as I've said, sneaky. But, like I said I don't know how\what HMRC ask for, assumed it was a questionnaire :emb and that would be it.

LisaContractorUmbrella
15th October 2015, 12:39
If it's in the contract I get, and 'the right of' is, as I've said, sneaky. But, like I said I don't know how\what HMRC ask for, assumed it was a questionnaire :emb and that would be it.

No, HMRC tend to be much more thorough than that if they suspect the right amount of tax hasn't been paid :frown

gables
15th October 2015, 15:46
No, HMRC tend to be much more thorough than that if they suspect the right amount of tax hasn't been paid :frown

.. and I suppose that's hassle for the Clientco and it's easier just to say yup, we had SDC

TykeMerc
15th October 2015, 16:00
.. and I suppose that's hassle for the Clientco and it's easier just to say yup, we had SDC

Clients will default to saying yes they have S, D OR C, they simply won't risk being dragged into IR35 cases. Client management staff will not be comfortable declaring they're not in charge of the expensive resource either.

GB9
19th October 2015, 06:35
I reiterate that you would be surprised how many clients don't want contractors on their books.

For basic support roles where resources needs to be moved from one area to another on a daily basis, then yes. But for the specialist roles, I can't see why they would.

I've mentioned before one client that was sued by a contractor when they ended his contract after 15 years. After that they went out of their way to ensure contractors were seen as non employees. It would take a significant policy change to reverse that approach.

BoredBloke
19th October 2015, 09:14
Contractors get used to fill project roles where specialist skills are needed. The client doesn't want those skills in house simply because they don't have a day to day need for them. I think if you asked any contractor they would be quite happy to be seen as non-employees.

LisaContractorUmbrella
19th October 2015, 09:31
Contractors get used to fill project roles where specialist skills are needed. The client doesn't want those skills in house simply because they don't have a day to day need for them. I think if you asked any contractor they would be quite happy to be seen as non-employees.

I think you're absolutely right and this is what we can't seem to get through to the powers that be - the politicians seem to think that it's in everyone's interests for contractors to become employees but that's simply not the case. What they do need to address is the number of workers who were employees who have been forced into working through PSC's or umbrella who really shouldn't be. The problem we have is making the distinction between the two in a way that the politicians will understand. :frown

GB9
19th October 2015, 09:37
Or do they understand but have another motive.

Having just read that there are 4 new ways to bring non EU IT workers into the country, it seems more like a wage restraint exercise than anything else.

TykeMerc
19th October 2015, 09:44
The problem we have is making the distinction between the two in a way that the politicians will understand. :frown

As I know you're aware that's the really tricky bit. Not only does that require pushing a thicker than pig excrement single braincelled politician into comprehension, but it requires overcoming their own political interest, namely raising taxes on the quiet and "tackling avoidance" in public.
Avoidance is great press and throw in knobbling employers exploiting the low paid it's even better.
Contractors to them are the HP. IBM, ATOS, CapGemini, Crapita, WiPro, Fujitsu's of the world, the fact that those companies tend to staff their projects with people that will be shafted by the proposals isn't even on their radars.

jamesbrown
19th October 2015, 10:09
I think you're absolutely right and this is what we can't seem to get through to the powers that be - the politicians seem to think that it's in everyone's interests for contractors to become employees but that's simply not the case. What they do need to address is the number of workers who were employees who have been forced into working through PSC's or umbrella who really shouldn't be. The problem we have is making the distinction between the two in a way that the politicians will understand. :frown

Politicians like boxing things and they probably see two boxes w/r to tax-motivated incorporation, one being low paid workers that are being wrongly classified as self-employed at the behest of their employers and another concerning off-payroll arrangements by well-paid executives. They see these two boxes because they're both a visible risk in the mainstream media. To a variable degree, I think they also understand that there's something in the middle, but they want to eliminate both of these things and squeezing the middle is also expedient for tax/deficit reasons (an angle being pushed by civil servants in HMRC as a tax gap). Unfortunately, this is a powerful combination of things to fight against, and I think there's very little chance that we can reverse this in any meaningful way. In any case, we'll essentially have the final word on this at the Autumn Statement in around a month (25 Nov IIRC).

LisaContractorUmbrella
19th October 2015, 10:48
As I know you're aware that's the really tricky bit. Not only does that require pushing a thicker than pig excrement single braincelled politician into comprehension, but it requires overcoming their own political interest, namely raising taxes on the quiet and "tackling avoidance" in public.
Avoidance is great press and throw in knobbling employers exploiting the low paid it's even better.
Contractors to them are the HP. IBM, ATOS, CapGemini, Crapita, WiPro, Fujitsu's of the world, the fact that those companies tend to staff their projects with people that will be shafted by the proposals isn't even on their radars.

You're right, I know you're right but I am going to hope that one of those single brain cells will be a receptor for some common sense sometime before 25th November [sorry I can't find a suitable smiley for that sentiment]

LisaContractorUmbrella
19th October 2015, 10:52
Politicians like boxing things and they probably see two boxes w/r to tax-motivated incorporation, one being low paid workers that are being wrongly classified as self-employed at the behest of their employers and another concerning off-payroll arrangements by well-paid executives. They see these two boxes because they're both a visible risk in the mainstream media. To a variable degree, I think they also understand that there's something in the middle, but they want to eliminate both of these things and squeezing the middle is also expedient for tax/deficit reasons (an angle being pushed by civil servants in HMRC as a tax gap). Unfortunately, this is a powerful combination of things to fight against, and I think there's very little chance that we can reverse this in any meaningful way. In any case, we'll essentially have the final word on this at the Autumn Statement in around a month (25 Nov IIRC).

I don't think that £265 million is going to fill the tax gap somehow but I do think you're right about the 2 boxes - I wonder how much of all this has been driven by the Unions following the CIS debacle??

jamesbrown
19th October 2015, 11:25
I don't think that £265 million is going to fill the tax gap somehow but I do think you're right about the 2 boxes - I wonder how much of all this has been driven by the Unions following the CIS debacle??

Yes, I'm not saying this is how a reasonable person would view things, but how I believe HMG are minded to view things in pursuit of reducing the deficit and to be seen to be reducing the deficit. I don't think they see £265 million in isolation, but as part of a collection of small/moderate savings; it's extremely short-sighted because HMRC have a long history of overestimating recoverable amounts and underestimating costs. A sensible person would legislate away the two specific boxes I mentioned, deal with any tax breaks for the self-employed more transparently and directly (e.g. through dividend taxation) and simultaneously abolish IR35.

TykeMerc
19th October 2015, 12:09
£265 million may be a drop in the bucket, but it's damn good press to people that don't vaguely understand the economy (i.e. the UK population), it's also a complete fabrication like all HMRC numbers.

They are after a simple panacea, they will then deal with any fallout in the long run, not like a politician is even capable of considering a period past the next election anyway.
Odds are they've been advised that even if 30% (and I think that's an absurdly high guess) of existing contractors stop contracting due to the changes there will still be loads available to fill the roles, any shortfall can be obtained cheaply from the sub-continent with visa's.