So what now? So what now?
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  1. #1

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    Default So what now?

    "Therefore the government will carefully consult on how to tackle non-compliance in the private sector, drawing on the experience of the public sector reforms, including through external research already commissioned by the government and due to be published in 2018"

    So there we have it - a consultation.

    Has there ever been a consultation into tax where the proposed new tax DIDN'T get implemented?

    Personally I have a sinking feeling about this and would have to ask what the point of contracting would be, with all of it's inherent risk, without a significant reward and chance to grow my business.

    However I do wonder if the private sector will fight hard on this, businesses like contractors, we do what they can't ask perms to do, they won't want to pay the employers NI, but perhaps there is a middle ground with this?

    All income is taxed PAYE, however if you are working as a contractor in the private sector, employers NI is not payable at all.

    More tax for Hector, but a big saving on what it could have been?

  2. #2

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    Quote Originally Posted by MarkT View Post
    All income is taxed PAYE, however if you are working as a contractor in the private sector, employers NI is not payable at all.
    It would take about 30 seconds for the entire private sector workforce to be categorised as Contractors and the resulting savings squirrelled off to Cayman or suchlike.

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    "Non-compliance". Such a 1984-esque phrase. Our HMRC overlords have spoken.

    Assume that the private sector will be subject to CEST/IR35 by April 2019 or 2020. That gives you some time to adjust your contracts and working practices so that you don't fall foul. Convincing clients might take a little longer, so build your relationships well and educate your client contacts.

    There will be no middle ground. There never is a middle ground with HMRC. Not unless you owe them £millions, in which case it's their problem rather than yours.

    Better still, with UK living standards falling fastest since the past 60 years, question why would anyone want to remain in this country. Take your skills and experience elsewhere, somewhere where you are valued.

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    Contracting doesn't exist in other countries - that's why London is full of young Anzacs and Aussies on a three year working holiday.

    I cannot see the full public sector IR35 changes being implemented in the private sector, there will have to be some leeway and maybe some movement over employers NI will be the option.

    Otherwise the contracting workforce is going to halve, flexible resources will become a thing of the past and the UK loses whatever edge it had, especially with Brexit coming

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    Quote Originally Posted by MarkT View Post
    Contracting doesn't exist in other countries - that's why London is full of young Anzacs and Aussies on a three year working holiday.

    I cannot see the full public sector IR35 changes being implemented in the private sector, there will have to be some leeway and maybe some movement over employers NI will be the option.

    Otherwise the contracting workforce is going to halve, flexible resources will become a thing of the past and the UK loses whatever edge it had, especially with Brexit coming
    I think the private sector implementation will be much less hassle than the public sector. Oddly enough I think that is the key reason why it was not rolled out.

    In the civil service there was quite a lot of vindictiveness waged and various independent assessments have been ignored along with any reasonable advice. I would not expect a business halfway through an important project, to risk all the contractors walking off site because they wanted to call them employees.

    To be very honest I would expect 50-70% of contractors in the private sector to breeze through an IR35 assessment.

    The big risks will be those that are working with the likes of Hays and Pontoon that basically tell your end clients that they just supply temporary staff.

    Evidenced here:
    Hays Information Technology Staffing Division
    https://www.pontoonsolutions.com/con...ent-solutions/

    Staff???? Contingent employees??? are you kidding me?

    Anyone still wondering why you have a target painted on you?

    We have a say in the matter and its time that the word gets spread that these types of companies are not to be engaged with by the freelance talent and instead we make it clear that we reserve our freelance skills for those companies that will work with us in symbiosis so that everyone gets the relationship they need.

    Either way there is a lot of changes that need to happen unless you want to let those companies make a massive profit while you pay all the tax.

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    I expect most contractors to say they are not IR35 caught. But everyone else is.

    Then whine when they are caught.
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    Quote Originally Posted by BrilloPad View Post
    I expect most contractors to say they are not IR35 caught. But everyone else is.

    Then whine when they are caught.
    That's my experience - however, I'd like to know what the value of the contract reviews are. I have one that categorically states I am outside of IR35, based on working practices and contract.

    So - why is Hector ignoring them then ?

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    Quote Originally Posted by MarkT View Post

    So - why is Hector ignoring them then ?
    Because Hector ignores everybody and does what it wants.
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    Quote Originally Posted by MarkT View Post
    That's my experience - however, I'd like to know what the value of the contract reviews are. I have one that categorically states I am outside of IR35, based on working practices and contract.

    So - why is Hector ignoring them then ?
    Hector does not like the law. So wants to pass the decision onto companies and agencies who it thinks will roll over.
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    Quote Originally Posted by BrilloPad View Post
    I expect most contractors to say they are not IR35 caught. But everyone else is.

    Then whine when they are caught.
    This is why rolling the changes out to the private sector makes good sense. If a client wants to take the "You are a contingent employee.." route that becomes purely their choice. If you are in contract when they do that, then you do not have to accept the verdict and are free to walk away refusing the new amended contract. (I am told that HMRC took this as evidence of lack of MOO when their own teams did this.) But when they see that new talent stops wanting to come for interviews and their day rates for roles have to increase like HMRC's have, they will either ask why this is happening and adjust their attitude or they will swallow the change in price as a cost of business. Etherway it will no longer be the contractor that is owning that risk.

    Quote Originally Posted by MarkT View Post
    That's my experience - however, I'd like to know what the value of the contract reviews are. I have one that categorically states I am outside of IR35, based on working practices and contract.

    So - why is Hector ignoring them then ?
    A good contract review will stop you from signing a contract that has no schedule of work and makes you look more like an employee. It also shows that you have performed your due diligence as a director to ensure you understood the tax state.

    HMRC can do what they like however having the contract review, following the contract in terms of working practices and having insurance will provide enough air cover to make them think about bothering someone that is not so well armed.

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