Agency worker law will catch contractors

[Paddy]

Under new regulations if you work via an agent you will be caught.
Please see the CUK front page and the consultation document:

http://www.contractoruk.com/004634.html

http://www.berr.gov.uk/consultations/page53060.html

Responses to this consultation must be received by

Friday 11 December 2009

email to: [email protected]

[Mich the Tester]

F**king hell, this is one of those EU directives isn't it? This'll hit us on le continent too.

[pzz76077]

The bottom line is that UK gov would prefer all IT workers to be PAYE as it makes collecting taxes that much easier and fool proof.

The real question is how long before they legislate to make that happen.

PZZ

[DimPrawn]

We're all employees of the EU state now.

All hail presidente Blair.

[bandit_legs]

Under new regulations if you work via an agent you will be caught.
Please see the CUK front page and the consultation document:

http://www.contractoruk.com/004634.html

http://www.berr.gov.uk/consultations/page53060.html

Responses to this consultation must be received by

Friday 11 December 2009

email to: [email protected]

Rubbish...!

As currently drafted the Directive appears not to apply to workers who operate through the increasingly popular limited company route. This mechanism is especially common among IT contractors. The worker is “employed” by his own limited company, usually incorporated for this purpose. The limited company contracts with the temp agency to supply the services of the worker via the agency to the end user client.

This arrangement means there is no direct formal contract between the worker himself and the agency or end user. In a case concerning a Hewlett Packard contractor2 the Employment Appeal Tribunal confirmed this view of the series of legal relationships, deciding that there was no employment contractual relationship between the worker and the end user. However, a decision3 by the Court of Appeal in 2004 shows that the courts are increasingly willing to ignore the formality of agency contracts and hold that a de facto employment contract exists between the worker and the end user. In that case a temporary cleaner who worked for four years for Wandsworth Council through a temp agency was in principle found to have a de facto contract with the Council.

1 COM(2002) 701 Final.

2 Hewlett Packard Ltd v O’Murphy [2002] IRLR 4 EAT.

3 Dacas v Brook Street Bureau (UK) Ltd [2004] EWCA Civ 217, [2004] IRLR 358.

[Mich the Tester]

The bottom line is that UK gov would prefer all IT workers to be PAYE as it makes collecting taxes that much easier and fool proof.

The real question is how long before they legislate to make that happen.

PZZ

It's not just the UK gov. Here in Holland, the tax authorities hold the client responsible if a freelancer doesn't pay his taxes; that forces clients to use agents to mitigate risks of freelancers to don't pay their taxes. At the other side of the equation you have these directives that turn freelancers into employees for tax purposes, thereby destroying their ability to compete by providing more flexible and cheaper service (deducting their business costs from tax) than the bloody great dinosaurs like Crap Gemini and so on who feel the need to finance huge flashy offices and top heavy management layers while failing to deliver on most of their big government projects.

There are 1,000,000 freelancers in Holland, spread across all sectors. Their average turnover is more than 100,000 euros. All these EU directives therefore threaten the competitiveness of people who account for about 100 billion euros of economic production; that's almost a quarter of the Dutch economy produced by one tenth of the workforce.

It's madness to think that any of this will benefit public finances; in the longer term it'll ruin public finances by strangling the economy and killing off the competitive ability of Europe.

Oh well, I feel like I´m preaching to the converted.

I bet it wouldn´t have happened under the tories.

[cojak]

I'll have to see what the PCG are doing about this later - I haven't the time at the mo...

[Paddy]

At the other side of the equation you have these directives that turn freelancers into employees for tax purposes, thereby destroying their ability to compete by providing more flexible and cheaper service (deducting their business costs from tax) than the bloody great dinosaurs like Crap Gemini and so on who feel the need to finance huge flashy offices and top heavy management layers while failing to deliver on most of their big government projects.

There are 1,000,000 freelancers in Holland, spread across all sectors. Their average turnover is more than 100,000 euros. .



I bet it wouldn´t have happened under the tories.

I am glad that I’m not alone with my thoughts. Believe me it’s not just the IT sector that suffer through legislation that is designed to favour large companies and discriminate against small businesses.

My hope is that if enough IT consultants come together we can form our own EB/Consultancy service and use the most tax efficient way to pay ourselves.

[pzz76077]

It is easy to see that in the not too distant future the concept of a contractor in the UK will cease to exist as it already has elsewhere.

You will be either employed PAYE or unemployed, other options not permitted.

PZZ

[Mich the Tester]

It is easy to see that in the not too distant future the concept of a contractor in the UK will cease to exist as it already has elsewhere.

You will be either employed PAYE or unemployed, other options not permitted.

PZZ

Unemployed or fake employed, as was the case in the Soviet Union. Look at my figures; Dutch freelancers are about one tenth of the workforce but produce one quarter of the country's GDP. I imagine that ratio is the same al over the place, as freelancers are quite simply more efficient, more competitive and better at their jobs than permies; they have to be otherwise they starve.