This government doesn't get innovation or small businesses
Discussion
From the Guardian: "the government is proposing that a consultant using a personal service company would be obliged to move on to the payroll if they work for a business for more than a month." (http://www.theguardian.com/politics/2015/nov/06/crackdown-on-personal-service-companies-could-raise-400m-in-tax)
In a the current global economy, mobility of the workforce is one of the few things that can allow us to respond to fierce competition. Mobility gets the right people to the right jobs, and allows them to move on when their talents are needed elsewhere. It fosters innovation, helps businesses manage their costs and spreads skills that are in heavy demand further. Mobility helps not only the technical needs of business, but also the physical needs of our population - allowing people to move around the country, build new centres of expertise and avoid property hot spots. I'd argue that our government, regardless of it's political leanings, should make mobility an absolute priority. It should be at the heart of business and housing policy.
So I'm utterly frustrated that the current lot are willing to punish that vital mobile workforce for the sake of a small tax increment. The policy on housing is bad enough, but to bury businesses in the treacle of 'forced employment' shows an astonishing lack of awareness of how skills move around the work place. This is about a concious decision to make a complex system even more complex when simplicity and agility are a prime advantage.
I know that some will fall for the "it's only fair" line, which is utterly disingenuous. Is it fair on a business that calls in an expert to deliver something, to force them to take full employment responsibility for that person, to have to factor in holidays, pensions, training and all the other requirements of employment? Is it fair that someone who's willing to take on the risk of unpredictable work, highly specialised training and regular relocation should be treated the same as a risk-averse employee? How would it even work, to call in a specialist, put them on the payroll for six months and then 'fire' them - that surely erodes the job safety of anyone on a payroll, and opens up all sorts of questions about pay. In general if you want a fairer tax system, you need to reduce the number of rules, not add yet more complexity and administrative burden.
I'm very unimpressed by this government. They used the coalition as an excuse not to make clear, beneficial decisions. Now they have a clear mandate, they're allowing the self serving desires of the civil service to generate busy work to override the need to make businesses work and people earn. They've ballsed up tax credits, it looks like they're going to make a mess of the European question with weak back room agreements, they're failing housing and letting London boil over. Their idea of innovation is to champion the makers of Moshi Monsters. The opposition should be ashamed that they can't even manage a successful challenge against such a bunch of incompetent career politicians.
In a the current global economy, mobility of the workforce is one of the few things that can allow us to respond to fierce competition. Mobility gets the right people to the right jobs, and allows them to move on when their talents are needed elsewhere. It fosters innovation, helps businesses manage their costs and spreads skills that are in heavy demand further. Mobility helps not only the technical needs of business, but also the physical needs of our population - allowing people to move around the country, build new centres of expertise and avoid property hot spots. I'd argue that our government, regardless of it's political leanings, should make mobility an absolute priority. It should be at the heart of business and housing policy.
So I'm utterly frustrated that the current lot are willing to punish that vital mobile workforce for the sake of a small tax increment. The policy on housing is bad enough, but to bury businesses in the treacle of 'forced employment' shows an astonishing lack of awareness of how skills move around the work place. This is about a concious decision to make a complex system even more complex when simplicity and agility are a prime advantage.
I know that some will fall for the "it's only fair" line, which is utterly disingenuous. Is it fair on a business that calls in an expert to deliver something, to force them to take full employment responsibility for that person, to have to factor in holidays, pensions, training and all the other requirements of employment? Is it fair that someone who's willing to take on the risk of unpredictable work, highly specialised training and regular relocation should be treated the same as a risk-averse employee? How would it even work, to call in a specialist, put them on the payroll for six months and then 'fire' them - that surely erodes the job safety of anyone on a payroll, and opens up all sorts of questions about pay. In general if you want a fairer tax system, you need to reduce the number of rules, not add yet more complexity and administrative burden.
I'm very unimpressed by this government. They used the coalition as an excuse not to make clear, beneficial decisions. Now they have a clear mandate, they're allowing the self serving desires of the civil service to generate busy work to override the need to make businesses work and people earn. They've ballsed up tax credits, it looks like they're going to make a mess of the European question with weak back room agreements, they're failing housing and letting London boil over. Their idea of innovation is to champion the makers of Moshi Monsters. The opposition should be ashamed that they can't even manage a successful challenge against such a bunch of incompetent career politicians.
davepoth said:
Couldn't contractors be...ooh, I don't know, contractors, rather than the CEO and only employee of a company that offers services?
This.These types of schemes are massively abused in the driving industry. Agencies encourage drivers to set up ltd companies so they the agencies don't have to pay sick pay or holiday pay or pensions or N.I contributions. All for a couple of quid extra an hour to the driver.
Tuna said:
I know that some will fall for the "it's only fair" line, which is utterly disingenuous. Is it fair on a business that calls in an expert to deliver something, to force them to take full employment responsibility for that person, to have to factor in holidays, pensions, training and all the other requirements of employment?
It is fair and proper if it is a relationship of employment. said:
Is it fair that someone who's willing to take on the risk of unpredictable work, highly specialised training and regular relocation should be treated the same as a risk-averse employee?
From a tax perspective, yes. All of the items you mention should be compensated through higher emoluments paid by the employing body, not through artificial tax structures. said:
How would it even work, to call in a specialist, put them on the payroll for six months and then 'fire' them - that surely erodes the job safety of anyone on a payroll, and opens up all sorts of questions about pay.
Fixed Term Contracts have existed for over a century and are treated as PAYE employees. Or would you suggest that anyone brought in as maternity cover should not be given the rights of employment?Tuna said:
From the Guardian: "the government is proposing that a consultant using a personal service company would be obliged to move on to the payroll if they work for a business for more than a month." (http://www.theguardian.com/politics/2015/nov/06/crackdown-on-personal-service-companies-could-raise-400m-in-tax)
In a the current global economy, mobility of the workforce is one of the few things that can allow us to respond to fierce competition. Mobility gets the right people to the right jobs, and allows them to move on when their talents are needed elsewhere. It fosters innovation, helps businesses manage their costs and spreads skills that are in heavy demand further. Mobility helps not only the technical needs of business, but also the physical needs of our population - allowing people to move around the country, build new centres of expertise and avoid property hot spots. I'd argue that our government, regardless of it's political leanings, should make mobility an absolute priority. It should be at the heart of business and housing policy.
So I'm utterly frustrated that the current lot are willing to punish that vital mobile workforce for the sake of a small tax increment. The policy on housing is bad enough, but to bury businesses in the treacle of 'forced employment' shows an astonishing lack of awareness of how skills move around the work place. This is about a concious decision to make a complex system even more complex when simplicity and agility are a prime advantage.
I know that some will fall for the "it's only fair" line, which is utterly disingenuous. Is it fair on a business that calls in an expert to deliver something, to force them to take full employment responsibility for that person, to have to factor in holidays, pensions, training and all the other requirements of employment? Is it fair that someone who's willing to take on the risk of unpredictable work, highly specialised training and regular relocation should be treated the same as a risk-averse employee? How would it even work, to call in a specialist, put them on the payroll for six months and then 'fire' them - that surely erodes the job safety of anyone on a payroll, and opens up all sorts of questions about pay. In general if you want a fairer tax system, you need to reduce the number of rules, not add yet more complexity and administrative burden.
I'm very unimpressed by this government. They used the coalition as an excuse not to make clear, beneficial decisions. Now they have a clear mandate, they're allowing the self serving desires of the civil service to generate busy work to override the need to make businesses work and people earn. They've ballsed up tax credits, it looks like they're going to make a mess of the European question with weak back room agreements, they're failing housing and letting London boil over. Their idea of innovation is to champion the makers of Moshi Monsters. The opposition should be ashamed that they can't even manage a successful challenge against such a bunch of incompetent career politicians.
I'm guessing you're a consultant?In a the current global economy, mobility of the workforce is one of the few things that can allow us to respond to fierce competition. Mobility gets the right people to the right jobs, and allows them to move on when their talents are needed elsewhere. It fosters innovation, helps businesses manage their costs and spreads skills that are in heavy demand further. Mobility helps not only the technical needs of business, but also the physical needs of our population - allowing people to move around the country, build new centres of expertise and avoid property hot spots. I'd argue that our government, regardless of it's political leanings, should make mobility an absolute priority. It should be at the heart of business and housing policy.
So I'm utterly frustrated that the current lot are willing to punish that vital mobile workforce for the sake of a small tax increment. The policy on housing is bad enough, but to bury businesses in the treacle of 'forced employment' shows an astonishing lack of awareness of how skills move around the work place. This is about a concious decision to make a complex system even more complex when simplicity and agility are a prime advantage.
I know that some will fall for the "it's only fair" line, which is utterly disingenuous. Is it fair on a business that calls in an expert to deliver something, to force them to take full employment responsibility for that person, to have to factor in holidays, pensions, training and all the other requirements of employment? Is it fair that someone who's willing to take on the risk of unpredictable work, highly specialised training and regular relocation should be treated the same as a risk-averse employee? How would it even work, to call in a specialist, put them on the payroll for six months and then 'fire' them - that surely erodes the job safety of anyone on a payroll, and opens up all sorts of questions about pay. In general if you want a fairer tax system, you need to reduce the number of rules, not add yet more complexity and administrative burden.
I'm very unimpressed by this government. They used the coalition as an excuse not to make clear, beneficial decisions. Now they have a clear mandate, they're allowing the self serving desires of the civil service to generate busy work to override the need to make businesses work and people earn. They've ballsed up tax credits, it looks like they're going to make a mess of the European question with weak back room agreements, they're failing housing and letting London boil over. Their idea of innovation is to champion the makers of Moshi Monsters. The opposition should be ashamed that they can't even manage a successful challenge against such a bunch of incompetent career politicians.
REALIST123 said:
Tuna said:
From the Guardian: "the government is proposing that a consultant using a personal service company would be obliged to move on to the payroll if they work for a business for more than a month." (http://www.theguardian.com/politics/2015/nov/06/crackdown-on-personal-service-companies-could-raise-400m-in-tax)
In a the current global economy, mobility of the workforce is one of the few things that can allow us to respond to fierce competition. Mobility gets the right people to the right jobs, and allows them to move on when their talents are needed elsewhere. It fosters innovation, helps businesses manage their costs and spreads skills that are in heavy demand further. Mobility helps not only the technical needs of business, but also the physical needs of our population - allowing people to move around the country, build new centres of expertise and avoid property hot spots. I'd argue that our government, regardless of it's political leanings, should make mobility an absolute priority. It should be at the heart of business and housing policy.
So I'm utterly frustrated that the current lot are willing to punish that vital mobile workforce for the sake of a small tax increment. The policy on housing is bad enough, but to bury businesses in the treacle of 'forced employment' shows an astonishing lack of awareness of how skills move around the work place. This is about a concious decision to make a complex system even more complex when simplicity and agility are a prime advantage.
I know that some will fall for the "it's only fair" line, which is utterly disingenuous. Is it fair on a business that calls in an expert to deliver something, to force them to take full employment responsibility for that person, to have to factor in holidays, pensions, training and all the other requirements of employment? Is it fair that someone who's willing to take on the risk of unpredictable work, highly specialised training and regular relocation should be treated the same as a risk-averse employee? How would it even work, to call in a specialist, put them on the payroll for six months and then 'fire' them - that surely erodes the job safety of anyone on a payroll, and opens up all sorts of questions about pay. In general if you want a fairer tax system, you need to reduce the number of rules, not add yet more complexity and administrative burden.
I'm very unimpressed by this government. They used the coalition as an excuse not to make clear, beneficial decisions. Now they have a clear mandate, they're allowing the self serving desires of the civil service to generate busy work to override the need to make businesses work and people earn. They've ballsed up tax credits, it looks like they're going to make a mess of the European question with weak back room agreements, they're failing housing and letting London boil over. Their idea of innovation is to champion the makers of Moshi Monsters. The opposition should be ashamed that they can't even manage a successful challenge against such a bunch of incompetent career politicians.
I'm guessing you're a consultant?In a the current global economy, mobility of the workforce is one of the few things that can allow us to respond to fierce competition. Mobility gets the right people to the right jobs, and allows them to move on when their talents are needed elsewhere. It fosters innovation, helps businesses manage their costs and spreads skills that are in heavy demand further. Mobility helps not only the technical needs of business, but also the physical needs of our population - allowing people to move around the country, build new centres of expertise and avoid property hot spots. I'd argue that our government, regardless of it's political leanings, should make mobility an absolute priority. It should be at the heart of business and housing policy.
So I'm utterly frustrated that the current lot are willing to punish that vital mobile workforce for the sake of a small tax increment. The policy on housing is bad enough, but to bury businesses in the treacle of 'forced employment' shows an astonishing lack of awareness of how skills move around the work place. This is about a concious decision to make a complex system even more complex when simplicity and agility are a prime advantage.
I know that some will fall for the "it's only fair" line, which is utterly disingenuous. Is it fair on a business that calls in an expert to deliver something, to force them to take full employment responsibility for that person, to have to factor in holidays, pensions, training and all the other requirements of employment? Is it fair that someone who's willing to take on the risk of unpredictable work, highly specialised training and regular relocation should be treated the same as a risk-averse employee? How would it even work, to call in a specialist, put them on the payroll for six months and then 'fire' them - that surely erodes the job safety of anyone on a payroll, and opens up all sorts of questions about pay. In general if you want a fairer tax system, you need to reduce the number of rules, not add yet more complexity and administrative burden.
I'm very unimpressed by this government. They used the coalition as an excuse not to make clear, beneficial decisions. Now they have a clear mandate, they're allowing the self serving desires of the civil service to generate busy work to override the need to make businesses work and people earn. They've ballsed up tax credits, it looks like they're going to make a mess of the European question with weak back room agreements, they're failing housing and letting London boil over. Their idea of innovation is to champion the makers of Moshi Monsters. The opposition should be ashamed that they can't even manage a successful challenge against such a bunch of incompetent career politicians.
ninja-lewis said:
It is fair and proper if it is a relationship of employment.
Companies are free to train up their staff to perform specialist roles, and staff are free to undergo training if they wish to change their role. The issue of mobility is key here, and one that has to be recognised. The desire to 'level the playing field' completely misunderstands the different needs of a mobile workforce and employers who need specialist skills. It's certainly true that service companies are a particularly clumsy mechanism, but they are an enabler of that mobility. I'd be glad to see an alternative that expresses the relationship more simply - but destroying it without creating that alternative is akin to removing tax credits without putting measures in for the people hardest hit.
ninja-lewis said:
Fixed Term Contracts have existed for over a century and are treated as PAYE employees. Or would you suggest that anyone brought in as maternity cover should not be given the rights of employment?
Maternity cover allows a given role in a company to be continued when the individual who usually fulfils it is unavailable - and they are expected to return to it when possible. Usually a consultant is called in when a role is not fulfilled, and often when they go they have passed on skills needed for continuation to permanent staff. It's a somewhat different relationship and the obligations on both employer and worker is different in each case.
ninja-lewis said:
Tuna said:
I know that some will fall for the "it's only fair" line, which is utterly disingenuous. Is it fair on a business that calls in an expert to deliver something, to force them to take full employment responsibility for that person, to have to factor in holidays, pensions, training and all the other requirements of employment?
It is fair and proper if it is a relationship of employment.
We've been warned that generic EU rules effectively give these agents the same rights as if they were employees and in some countries that's being enforced so we can't just terminated contracts, we have to go through the same process and pay compensation as if they were employees.
Yawn! Another bash the contractor thread.
Typical, "it's not fair", bulls
t reporting. 20% my arse! Hence picture of Paxman, well if he's a basic rate tax payer then I'm a monkey's uncle, and as of April 2016 we are all going to get spannered by the dividend tax anyway, so why is there any need for additional changes? NI payments? Well 400 million quid might look like a lot of cash to the average grauniad reading pinko but it's eff all in the grand scheme of things. That said, those that aren't bright enough to operate in such a way as to rule themselves out of caught deserve everything they get. Rather like IR35 really.
Typical, "it's not fair", bulls
t reporting. 20% my arse! Hence picture of Paxman, well if he's a basic rate tax payer then I'm a monkey's uncle, and as of April 2016 we are all going to get spannered by the dividend tax anyway, so why is there any need for additional changes? NI payments? Well 400 million quid might look like a lot of cash to the average grauniad reading pinko but it's eff all in the grand scheme of things. That said, those that aren't bright enough to operate in such a way as to rule themselves out of caught deserve everything they get. Rather like IR35 really. Edited by TeamD on Sunday 8th November 03:19
ninja-lewis said:
From a tax perspective, yes. All of the items you mention should be compensated through higher emoluments paid by the employing body, not through artificial tax structures.
This basicallyIf someone is contracting, and so taking on risk in terms of irregularity of income and so forth, it is up to those engaging the contractor to remunerate them for this, not the government via artificial tax structures that mean that they are paying a lower rate of tax than the person working alongside them.
Tuna said:
It's certainly true that service companies are a particularly clumsy mechanism, but they are an enabler of that mobility. I'd be glad to see an alternative that expresses the relationship more simply - but destroying it without creating that alternative is akin to removing tax credits without putting measures in for the people hardest hit.
What measures?The issue around tax credits is that households have organised their working lives around them. If you reduce the amount being paid then of course some households are going to lose out, as there is less money being paid!
The issue facing this country is that we are still living beyond our means, and the baby boomers are moving into retirement. These issues are all interconnected whether that be the taxation treatment of contractors or a tax credit regime that had become unaffordable.
JagLover said:
This basically
If someone is contracting, and so taking on risk in terms of irregularity of income and so forth, it is up to those engaging the contractor to remunerate them for this, not the government via artificial tax structures that mean that they are paying a lower rate of tax than the person working alongside them.
This gets very complicated when you start considering companies like my own. My business partner spends most of his time on-site at a customers premises providing a Managed IT Service, whereas I develop software products and act as backup/cover. Often the income from the Managed Service provides a revenue stream that supports the development projects which are medium to long term investment in those products, products, I might add, that may or may not realise the returns we would necessarily prefer dependent upon sales, the prevailing market or the economy in general. So...is my business partner an employee of the end customer, the intermediary or our company? Where does risk lay and why should we be considered to not be a company in our own right in much the same way as the likes of HP? It all rather defeats the object of having Limited companies. If someone is contracting, and so taking on risk in terms of irregularity of income and so forth, it is up to those engaging the contractor to remunerate them for this, not the government via artificial tax structures that mean that they are paying a lower rate of tax than the person working alongside them.
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