Private sector EDM

[webberg]

Insurance to employers is not really what is needed - it's insurance to fee payers, i.e. those closest to the contractor. In the event that the decision on IR35 is "wrong" and more tax is due, they are HMRC's first port of call.

True, they will seek to lay off said risk to end clients (not very much) and individuals (almost all of it) but that is where the trail starts.

In effect if an individual is investigated and found to have avoided tax, then the fee payer pays and has to chase the individual. In effect therefore, doing HMRC's debt collection for them.

I would not be at all surprised to see fee payers being set up as £1 companies, sending all their income as a royalty to an offshore base and when HMRC come knocking, it's thank you and good night, leaving individual and end client exposed.

Is that too cynical?

[NeedTheSunshine]

Insurance to employers is not really what is needed - it's insurance to fee payers, i.e. those closest to the contractor. In the event that the decision on IR35 is "wrong" and more tax is due, they are HMRC's first port of call.

True, they will seek to lay off said risk to end clients (not very much) and individuals (almost all of it) but that is where the trail starts.

In effect if an individual is investigated and found to have avoided tax, then the fee payer pays and has to chase the individual. In effect therefore, doing HMRC's debt collection for them.

I would not be at all surprised to see fee payers being set up as £1 companies, sending all their income as a royalty to an offshore base and when HMRC come knocking, it's thank you and good night, leaving individual and end client exposed.

Is that too cynical?

That sounds depressingly likely.

[jamesbrown]

Is that too cynical?

Not too cynical, but it makes no sense. We’ll see what the liability clauses look like around 11 July, but the suggestion so far is that liability could move to the client (and starts there if they are the fee payer), but not the contractor or ContractorCo. Anyway, given the potential to shift liability to the client in some cases, clients are not going to sit back and passively accept a chain with such shenanigans going on. Indeed, this is why the liability will likely move to clients only, because they are in a position of power w/r to fee payers.

[webberg]

Not too cynical, but it makes no sense. We’ll see what the liability clauses look like around 11 July, but the suggestion so far is that liability could move to the client (and starts there if they are the fee payer), but not the contractor or ContractorCo. Anyway, given the potential to shift liability to the client in some cases, clients are not going to sit back and passively accept a chain with such shenanigans going on. Indeed, this is why the liability will likely move to clients only, because they are in a position of power w/r to fee payers.

I hope you are right.

However we already see contracts where the liability ends with the individual and any push back on them saying "no thanks and might even be illegal" is met with "do you want the gig or not?".

[jamesbrown]

I hope you are right.

However we already see contracts where the liability ends with the individual and any push back on them saying "no thanks and might even be illegal" is met with "do you want the gig or not?".

But that’s a completely separate thing. Contracts can say anything, but they cannot override statute. Here, we’re talking about what the revised ch 10 of the ITEPA is going to say, not what a contract says. It is already very common for contracts to try to “shift” liability. Whether those clauses are enforceable is another matter, but that doesn’t change the liability on the fee payer and, potentially, the client to HMG, which they will need to deal with separately from, and in advance of, any contract litigation. We’re also talking about large clients here, not small ones, who will be exempt, initially, so they will be wise to risk and how to mitigate risk.

[JohntheBike]

IR35 OFF-PAYROLL TAX EXTENSION TO PRIVATE SECTOR - Early Day Motions

Encourage your MP to support the EDM.

I received a letter recently from Ms. Christina Rees, who is the shadow Welsh Secretary. She explains that members of the cabinet and their shadows are not allowed to sign EDM's. It's interesting to note the support from Labour MP's for this EDM.

[mudskipper]

I received a letter recently from Ms. Christina Rees, who is the shadow Welsh Secretary. She explains that members of the cabinet and their shadows are not allowed to sign EDM's. It's interesting to note the support from Labour MP's for this EDM.

She is correct.

[JohntheBike]

She is correct.

naturally, but she only explained this to me after I'd asked her twice to support the EDM.