Discussion document on IR35 published

[Beggs1985]

This is 1 reason why I don't think the general public should write responses. A badly written response allows them to interpret it in the way they want to not the way it was intended..

Only 3 of the respondents to the T & S discussion document were private individuals. The majority where accountants, umbrella companies, PSC's and trade unions.

[TheMrs]

Surely clients would be more likely to ensure contracts were outwith IR35?

I appreciate doom and gloom and general hating on the Taxman is de rigueur on here (and in my contracting life in general) HOWEVER...wouldn't it make more sense for clients en masse to issue an edict that they will only employ on basis of outside IR35 rather than insist we are all inside?

My reasoning is that a) the drastic decrease in take home pay will make it worth retiring early and/or leave the UK for many of the most experienced, b) the in-demand skill sets will up their rates accordingly first chance we get, c) the disruption and loss of key skills will impact business even in the short term and, crucially, d) we all have (or should have) contracts which already make it clear there is no S, D or C, right of sub etc as we are actual real functioning Ltd companies with risk and insurance costs and all the other stuff that makes us so clearly NOT disguised employees that even clients could see that.

I appreciate there will be the new threat of liability for deemed NIC distributed along the chain and clients could fall liable but I'd bet my shirt that as soon as that risk becomes real some sort of insurance will pop up to cover it and/or the client will devise a nifty clause which transfers the liability back to MyCo.


Or am I just a glass full, deluded dreamer?

[TheFaQQer]

I appreciate doom and gloom and general hating on the Taxman is de rigueur on here (and in my contracting life in general) HOWEVER...wouldn't it make more sense for clients en masse to issue an edict that they will only employ on basis of outside IR35 rather than insist we are all inside?

It may well make sense, and it may even be what the clients really want to do.

However, it is significantly easier for a client to adopt an "always in" position - they don't open themselves up to any liability, they don't need to learn about IR35, they don't have to make any judgement calls about your tax status, they don't need to get involved, and (most importantly) they don't leave themselves open to the whim of the taxman. It's about risk management - and why would you put your business at risk for little to no benefit?

Now, if there was a series of reasonable, decent tests that all clients could be applied to confirm the working arrangements were inside or outside, and HMRC would accept them as being right, then that would mean that clients don't expose themselves to those whims. A test of whether something is a business entity or not, if you will...

[LisaContractorUmbrella]

Completely agree with these sentiments. Various representations were made to the government when the original travel and subsistence discussion document was put forward that the restriction of these expenses would have a negative impact on the flexible labour market.

The reply on page 28 point F of the consultation document states 'The government has received no evidence that changes in this area will impact negatively on the flexible workforce and we do not believe this will be the case'.

There are a lot of contractors that use this forum and they, in turn, probably know a lot of contractors - surely all of us as a group can provide the evidence that the Government needs - actual facts and figures rather than emotive speculation?? We will be putting in a response to the consultation on T&S and will be involved in the discussions on son of IR35 - I'd be quite happy to add in facts and figures from you guys. It seems that HMRC think all contractors live and work in central London - I am sure we can prove that most of you lot are prepared to travel for your contracts and that your associated costs are those of a business and not an employee. Anything added in would be collated and no names, no pack drill so if you think it would help pm me or email me at [email protected].

Suggestions for alternatives to SD&C as a determination would be useful too. I think part of the overall problem is that loads of low paid workers have been flooded onto the market as companies realise that they can move employment costs to an umbrella or a PSC - if that's the case then not allowing companies to move workers who earn less than a certain amount to an intermediary would surely solve the problem - got to be easier than keep messing about with ever-changing employment law surely?

If we can prove to Government that these moves will actually end up being a cost to the economy rather than a saving to HMRC surely they'll have a rethink?

[TheFaQQer]

There are a lot of contractors that use this forum and they, in turn, probably know a lot of contractors - surely all of us as a group can provide the evidence that the Government needs - actual facts and figures rather than emotive speculation?? We will be putting in a response to the consultation on T&S and will be involved in the discussions on son of IR35 - I'd be quite happy to add in facts and figures from you guys. It seems that HMRC think all contractors live and work in central London - I am sure we can prove that most of you lot are prepared to travel for your contracts and that your associated costs are those of a business and not an employee. Anything added in would be collated and no names, no pack drill so if you think it would help pm me or email me at [email protected].

If you have the figures to hand, please also include them in any response to IPSE for the consultation - https://www.ipse.co.uk/news/2015/tra...-want-hear-you

When working from home, my costs in this area have been low (shock!) but still 1.5% - 4% of turnover because of travel to meetings and overnight stays; when working in London it's ranged from 19% - 30% of turnover in travel, accommodation and subsistence.

[eek]

If you have the figures to hand, please also include them in any response to IPSE for the consultation - https://www.ipse.co.uk/news/2015/tra...-want-hear-you

When working from home, my costs in this area have been low (shock!) but still 1.5% - 4% of turnover because of travel to meetings and overnight stays; when working in London it's ranged from 19% - 30% of turnover in travel, accommodation and subsistence.

Looking at the last few contracts I've claimed probably £7000 or so in mileage a year (20,000 or so miles) with possible another £1500 on hotels... And that is hitting the two nearest markets from where I live (they are in opposite directions). Were I to move full time to one of those locations I would end up spending more in the other whenever the market in town a dried up... 1 year I would have zero expenses the following year £5500 in mileage, and £10000 minimum in subsistence.. (hint thats a mere £50 a night people know on here that I'm a cheapstake)..

For this contract (in London town) I have the advantage of staying with my parents so that's rent free. Train tickets are still £250 a week though.... That's 10% of turnover prior to any other expense...

[jamesbrown]

Suggestions for alternatives to SD&C as a determination would be useful too. I think part of the overall problem is that loads of low paid workers have been flooded onto the market as companies realise that they can move employment costs to an umbrella or a PSC - if that's the case then not allowing companies to move workers who earn less than a certain amount to an intermediary would surely solve the problem - got to be easier than keep messing about with ever-changing employment law surely?

Yes, I think it's worth considering, although I think they'd err on the side of draconian rules to avoid returning to the problem later. The motivation IMO was low paid workers incorporating for tax purposes, on the one hand, and high-paid off payroll arrangements in the public sector on the other. We're collateral to a large degree, but not collateral that they care about. Off-payroll arrangements in the public sector have been tackled without the need for controlling persons. Let's see how the new agency rules impact the former. Now they're talking about revisions before the impacts of the recent changes can be seen, and these changes have the potential to increase collateral a lot.

[aoxomoxoa]

There are a lot of contractors that use this forum and they, in turn, probably know a lot of contractors - surely all of us as a group can provide the evidence that the Government needs - actual facts and figures rather than emotive speculation?? We will be putting in a response to the consultation on T&S and will be involved in the discussions on son of IR35 - I'd be quite happy to add in facts and figures from you guys. It seems that HMRC think all contractors live and work in central London - I am sure we can prove that most of you lot are prepared to travel for your contracts and that your associated costs are those of a business and not an employee. Anything added in would be collated and no names, no pack drill so if you think it would help pm me or email me at [email protected].

Suggestions for alternatives to SD&C as a determination would be useful too. I think part of the overall problem is that loads of low paid workers have been flooded onto the market as companies realise that they can move employment costs to an umbrella or a PSC - if that's the case then not allowing companies to move workers who earn less than a certain amount to an intermediary would surely solve the problem - got to be easier than keep messing about with ever-changing employment law surely?

If we can prove to Government that these moves will actually end up being a cost to the economy rather than a saving to HMRC surely they'll have a rethink?

As supply-side contractors we clearly have a strong vested personal financial interest in the outcome, and that's likely to diminish the impact of any such representations we make collectively or as individuals - "they would say that wouldn't they?". Not to say it's a bad idea to assemble a weight of evidence/opinion etc.

Surely the approach that's more likely to have an impact on the eventual outcome is for our clients as a body to be lobbying that these changes will be detrimental in terms of business flexibility. So, I hope IPSE and others will be pushing the CBI etc to make appropriate representations.

[tractor]

....

Here's one person who won't be affected, my very own 'contractor supporting' MP...

Rob Wilson

Do as I say, not as I do!

9 pence Tight barsteward!

[LisaContractorUmbrella]

Looking at the last few contracts I've claimed probably £7000 or so in mileage a year (20,000 or so miles) with possible another £1500 on hotels... And that is hitting the two nearest markets from where I live (they are in opposite directions). Were I to move full time to one of those locations I would end up spending more in the other whenever the market in town a dried up... 1 year I would have zero expenses the following year £5500 in mileage, and £10000 minimum in subsistence.. (hint thats a mere £50 a night people know on here that I'm a cheapstake)..

For this contract (in London town) I have the advantage of staying with my parents so that's rent free. Train tickets are still £250 a week though.... That's 10% of turnover prior to any other expense...

That's exactly the sort of information I think that they want eek - numbers and how those numbers would change if the rules change and whether or not those changes would make you think about not contracting in future