Do you Opt Out?

[tractor]

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[QUOTE=malvolio;1961867]I didn't say anything about substitution. Not everyone is a one man band, there are plenty of people out there in partnerships , with their own staff or using sub-contractors who do not want to be bound to the Agency Regulations which is what would happen if there wasn't an opt out. Would you want to run a business where you would have to pay everyone before you got paid yourself, or have a means to prevent your people decamping to the client and taking over your business? Since the scope of the Regs was so broad, the ability for them not to apply was necessary.

Sorry! My apologies, I mistook subbie for substitution - I shouldn't post until after the second cup of coffee. Note that I apologised, I didn't just duck out of the thread!

Given the claims you make over what is and isn't an IR35 pointer though (and which you still haven't addressed), I would still be interested in whether you are just a member or whether you hold an office in the PCG.

[malvolio]

[QUOTE=tractor;1961868]

I didn't say anything about substitution. Not everyone is a one man band, there are plenty of people out there in partnerships , with their own staff or using sub-contractors who do not want to be bound to the Agency Regulations which is what would happen if there wasn't an opt out. Would you want to run a business where you would have to pay everyone before you got paid yourself, or have a means to prevent your people decamping to the client and taking over your business? Since the scope of the Regs was so broad, the ability for them not to apply was necessary.

Sorry! My apologies, I mistook subbie for substitution - I shouldn't post until after the second cup of coffee. Note that I apologised, I didn't just duck out of the thread!

Given the claims you make over what is and isn't an IR35 pointer though (and which you still haven't addressed), I would still be interested in whether you are just a member or whether you hold an office in the PCG.

I haven't' addressed IR35 in relation to the Agency Regs because there is no connection, as ony fule kno - or at least, ony fule who bothers to learn their business.

And this is Contractor UK. where Malvolio has been expressing often contentious opinions for a long time. What PCG might or might not think about it is their problem, I only ever refer to stuff they have published..

[tractor]

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[QUOTE=malvolio;1961879]

I haven't' addressed IR35 in relation to the Agency Regs because there is no connection, as ony fule kno - or at least, ony fule who bothers to learn their business.

And this is Contractor UK. where Malvolio has been expressing often contentious opinions for a long time. What PCG might or might not think about it is their problem, I only ever refer to stuff they have published..

Fair points.

But given the claims you have made at least recently on behalf of The Treasury, BIS and HMRC, none of which you are prepared to corroborate, you will forgive me for ignoring any future claims.

I know this poll and medium is less than scientific but there is no reason to suppose that those who have replied would do so lightly or dishonestly, the current metric is 7 Never and 9 (for the sake of clarity, two of us have admitted picking the wrong option) Always or Sometimes. That is a far cry from the claims that all commentators make, esp agencies who always claim 100% opt out. From memory, I think that is little different from the results of the last poll that I can no longer find.

So for any reader who is confronted by the agency 100% claim, the ONLY evidence available is less than 50% always opt out!

[malvolio]

Not disputing that at all. All I'm saying that even those who do opt out rarely get it right so their status would be open to challenge if it ever got to court. And, of course, the agency getting you to opt out when signing the final contract is a nonsense since by then you are already known to the client so any such opt out is invalid. And I remain totally unconvinced that the supposed benefits of not opting out mean anything in the real world which is why I simply ignore it as an issue.

But then again, we know what we're doing.

[cojak]

So for any reader who is confronted by the agency 100% claim, the ONLY evidence available is less than 50% always opt out!

And that's no more accurate a claim than Mal's. You started this poll on a Saturday, and it's not yet noon on the Sunday. I advise returning to this on Friday once there has been a more representative sample than the no-lifes reading this at the weekend...

[tractor]

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And that's no more accurate a claim than Mal's. You started this poll on a Saturday, and it's not yet noon on the Sunday. I advise returning to this on Friday once there has been a more representative sample than the no-lifes reading this at the weekend.

That actully was my point hence the . Clearly, you have made the point more eloquently than I ever could.

Sorry, Mal, but people listen to and act upon advice, even anonymous advice they read on forums. That's why I take issue with it when it cannot be corroborated or is clearly wrong. Tomorrow, the world will still turn. I will leave it there.

[Wanderer]

We all know that, but it was (and is) for valid commercial reasons for contractors who use subbies or their own staff.

Nonsense.

Before we start let's get the terminology right. What we colloquially call an "Agency" is actually a company which is acting as an "Employment Business" as defined in the Employment Agencies Act 1973. The Agency Conduct Regulations only regulate the conduct of these type of businesses.

A contractor who employs subbies is NOT acting as an Employment business so the Agency Conduct regulations have no detrimental impact on them.

If a freelancer is successful enough to actually start running their own Employment Business then they are a what we would call an Agency and therefore they should be regulated just like any other Agency. Should there be some exemption for ex-contractors who now run an employment business? No! They are an agency like all the others so they can compete on a level playing field.

And if a freelancer is subcontracting work and accidentally finds that they are now running an Employment Business then they have really made a balls up of their trading structure (and the way they engaged their subbies) and left themselves with a raft of compliance issues that make the agency regs look like a picnic.

Suggesting that the PCG lobbied for the opt out to benefit the 0.01% of freelancers who go on to run an Employment Agency is nonsensical. The agencies have their own very powerful lobby groups.

Is that really the reason why the PCG gave us the opt-out?

The PCG (and other freelancer lobby groups) were afraid that the Agency Conduct Regulations could damage the status of Contractors as being "in business on their own account". As it turned out, it made no difference and it was a massive own goal which has been widely abused by the Agencies to the detriment of contractors and clients alike.

The whole thing backfired and I guess they weren't to know that this could happen. The thing that pisses me off is that the PCG sits back and does NOTHING as if the widespread agency abuse of the opt out isn't a problem. The PCG helped break it so they should help fix it.

If the opt-out exists specifically "for contractors who use subbies or their own staff" then one could presume that the disadvantages of opting out in such circumstances would be discussed there.

It doesn't.

That is just nonsense that some poster on an internet forum wrote - as I pointed out above, the Regulations don't apply to a contractor who uses subbies - they only apply to Agencies.

I didn't say anything about substitution. Not everyone is a one man band, there are plenty of people out there in partnerships , with their own staff or using sub-contractors who do not want to be bound to the Agency Regulations which is what would happen if there wasn't an opt out.

People keep repeating this nonsense with the hope that others will start believing it.

The Agency regulations only apply if you are an Agency. That is why they are called the Agency regulations. They don't apply to freelancers who subcontract.

The PCG exists to lobby for the interests of freelancers, not Agencies. If a freelancer goes on to form an Employment Agency then good luck to them but the Agencies have their own lobby groups and what is good for Agencies is at odds with what the vast majority of freelancers need so it is wrong to suggest that the PCG should lobby on behalf of the minority of their members.

Would you want to run a business where you would have to pay everyone before you got paid yourself, or have a means to prevent your people decamping to the client and taking over your business? Since the scope of the Regs was so broad, the ability for them not to apply was necessary.

That is a risk you have to take if you are running an Agency. We are freelancers, not Agencies so your argument doesn't hold water.

All I'm saying that even those who do opt out rarely get it right so their status would be open to challenge if it ever got to court. And, of course, the agency getting you to opt out when signing the final contract is a nonsense since by then you are already known to the client so any such opt out is invalid.

The legislation is poorly worded and this has never been tested in court. Until it is, we won't know one way or another. Running your business based on a grey area interpretation of the law is not a good thing in my opinion.

And I remain totally unconvinced that the supposed benefits of not opting out mean anything in the real world which is why I simply ignore it as an issue.

That's great. I'm really happy for you and we have the legal right to choose either way. If a contractor wants to opt out then there's no problem with that.

The problem that has been raised here is when they choose (for whatever reason) that they do not want to opt out.

1. Agencies are abusing the opt out mercilessly
2. Umbrellas are being bullied by agencies into getting people to opt out
3. A significant number of contractors choose to NOT opt out (though the PCG are in deep denial about this point)
4. Many more freelancers choose to opt out because they fear the agency will refuse to do business with them (illegal but difficult to prove)
5. PCG are sitting on their hands and doing nothing

[malvolio]

Nonsense.

Nope, but hey...


...snip...

Agencies are abusing the opt out mercilessly

I believe I already said that...

1. Umbrellas are being bullied by agencies into getting people to opt out

Really? Since the contract is between agency and umbrella, why would they do that?

1. A significant number of contractors choose to NOT opt out (though the PCG are in deep denial about this point)

No they aren't, and the issue is under active discussion now

1. Many more freelancers choose to opt out because they fear the agency will refuse to do business with them (illegal but difficult to prove)

Not difficult at all, but it needs more people to understand the rules and to report breaches to BIS

1. PCG are sitting on their hands and doing nothing

No they aren't. Why do you suppose HMG are consulting on the Regs and looking to change them significantly?

[tractor]

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Nope, but hey...


...snip...


I believe I already said that... Really? Since the contract is between agency and umbrella, why would they do that? No they aren't, and the issue is under active discussion now Not difficult at all, but it needs more people to understand the rules and to report breaches to BIS No they aren't. Why do you suppose HMG are consulting on the Regs and looking to change them significantly?

On this last point, I am in discussion with them now and my impression is twofold...

1. PCG think they are negotiating - I suspect that at the eleventh hour, their representations will be ignored just like last time and we will get an even bigger crock.

2. I suspect PCG positioned the original discussion around the premise that if you opt out, you have to be a real business therefore IR35 cannot apply - that was never said iirc but that is my impression. This time around, from the short discussions that I have had, it appears to be the case again. HMRC and the gov will never, ever go for it.

[malvolio]

On this last point, I am in discussion with them now and my impression is twofold...

1. PCG think they are negotiating - I suspect that at the eleventh hour, their representations will be ignored just like last time and we will get an even bigger crock.

2. I suspect PCG positioned the original discussion around the premise that if you opt out, you have to be a real business therefore IR35 cannot apply - that was never said iirc but that is my impression. This time around, from the short discussions that I have had, it appears to be the case again. HMRC and the gov will never, ever go for it.

Well it's good to know their members support them...

It's a different PCG now and a lot more influential than the 2004 version.