new IR35 tool

[daemon]

Countdown said:

daemon said:

The couple of spineless wonders who could make a decision for individuals are too "afraid" to in case they get it wrong and get fired (yeah, like anyone ever gets fired....), so i'd say with 99% certainty that will be how it will go.

From what I understand the IR35 tests haven't changed. If Contractors fell foul of the test they were supposed to make a "deemed payment" when they did their tax return. The only thing that's changed is that the Contractor is now effectively having tax deducted at source so pays the tax "up front" .

Other than that, what's changed?

ETA If PSB gets it wrong they get fined 5x the amount paid to the Contractor. That tends to focus minds.

Nothings changed. Thats the point.

However its "easy" for PSOs to tar everyone with the same brush because it reduces risk for them.

The people who should be pushing back in these organisations and going "hang on, these people are clearly outside of IR35, and heres why" are too spineless to do that.

The new HMRC tool is skewed towards getting people inside IR35, so PSOs will cite inputting details into that and getting the outcome as being "in" IR35 as definitive.

Its not.

If you picked 100 contractors at random and applied the IR35 legislation to their contracts, roughly 30% would be in, 30% would be out and 40% would be debatable.

With the HMRC IR35 tool, 95% are in - because its based on HMRCs skewed view of the legislation.

I have no doubt my current role is outside of IR35, however i've likewise no doubt that its about to be deemed "inside" by the PSO i am contracted to as they're going to take the lazy option and deem us all in.

Hows that fair?

[alfie2244]

daemon said:

Nothings changed. Thats the point.

However its "easy" for PSOs to tar everyone with the same brush because it reduces risk for them.

The people who should be pushing back in these organisations and going "hang on, these people are clearly outside of IR35, and heres why" are too spineless to do that.

The new HMRC tool is skewed towards getting people inside IR35, so PSOs will cite inputting details into that and getting the outcome as being "in" IR35 as definitive.

Its not.

If you picked 100 contractors at random and applied the IR35 legislation to their contracts, roughly 30% would be in, 30% would be out and 40% would be debatable.

With the HMRC IR35 tool, 95% are in - because its based on HMRCs skewed view of the legislation.

I have no doubt my current role is outside of IR35, however i've likewise no doubt that its about to be deemed "inside" by the PSO i am contracted to as they're going to take the lazy option and deem us all in.

Hows that fair?

^^^^^ This.

Although determinations are already being made yet the IR35 tool is not even available. Even when it is it will not be compulsory to use and the decisions can be made by people not trained in or fully understand IR35 rules and regulations (from my research not many do).

The new regs start 6th April so any "contractors" on Monthly payments need to either resign now or take the risk of being ruled inside IR35 (rightly or wrongly)Tax, employers & employees NI deducted as per any other employee yet none of the benefits, holiday, sick pay etc. Plus the added bonus of not being able to claim expenses (not sure many PAYE employees would work 150 miles from home, stay in rented accommodation and yet not get any expenses whatsoever).

And to top it all, should this untrained person, decide your contract now to be inside IR35, incorrectly, it raises the possibility of the HMRC doing a retrospective investigation of your previous contracts.


I also note "Umbrellas" being investigated by MP's due to potential "exploitation" of workers

http://www.bbc.co.uk/news/uk-england-39058166

eta Doesn't look like Unite are too impressed with umbrellas either:

http://www.unitetheunion.org/news/unite-demands-go...

Edited by alfie2244 on Saturday 25th February 11:55

[Alex]

Tech contractors begin mass UK.gov exodus in wake of HMRC's IR35 income tax clampdown

https://www.theregister.co.uk/2017/02/27/contracto...

[Alex]

Tax changes could cost UK public sector workers 30% of salary

https://www.theguardian.com/society/2017/feb/27/ta...

Of course, this is The Guardian, who previously have labelled BBC talent, MPs and NHS consultants as "tax avoiders" for using the same working arrangements...

[bigandclever]

alfie2244 said:

eta Doesn't look like Unite are too impressed with umbrellas either:

http://www.unitetheunion.org/news/unite-demands-go...

No they're not, neither are the TUC and UCATT, but that's not an IR35 thing.

[alfie2244]

bigandclever said:

alfie2244 said:

eta Doesn't look like Unite are too impressed with umbrellas either:

http://www.unitetheunion.org/news/unite-demands-go...

No they're not, neither are the TUC and UCATT, but that's not an IR35 thing.

It is when the agencies stock initial solution, as experienced, is you will have to go umbrella if ruled inside IR35.......not on your nelly was the terse reply

[Uncle John]

So the new tool is a pile of cack!

http://www.contractorcalculator.co.uk/public_secto...

[alfie2244]

Bit late IMO:

http://www.contractoruk.com/news/0012920public_bod...

[paul789]

The Times are reporting tax changes in the budget for the high-earning self-employed. This has obviously been the desire all along, any thoughts on how this may look?

[daemon]

paul789 said:

The Times are reporting tax changes in the budget for the high-earning self-employed. This has obviously been the desire all along, any thoughts on how this may look?

I think that is just going to be relating to this new IR35 change for PSOs

[paul789]

Behind a paywall, but the article talks about an "overhaul the tax system for the self‑employed in next week’s budget". I think it's beyond the public sector.

But it is just speculation.

Beyond Brexit, this government - the only option - is really starting to boil my p!!s.

[FredClogs]

They'll be big changes to VAT for "service only companies" in this budget. They've already effectively closed the FRS bonus and apart from mileage claims they'll be little point in "service only" companies moving to normal VAT as the changes will mean you can't claim back for travel, eating out, accomodation or any items such as tools, computers, phones or anything else!

I mean fair enough really but I always though as I was acting as a tax collector for them I was entitled to my little bit - but no, not anymore.

Unless you genuinely need to register for VAT now there is zero point.

[ecs]

Will the VAT registration threshold be changed though?

This particular title pissed me off a bit to be honest: 'Tackling aggressive abuse of the VAT Flat Rate Scheme - technical note'

https://www.gov.uk/government/publications/tacklin...

[FredClogs]

ecs said:

Will the VAT registration threshold be changed though?

This particular title pissed me off a bit to be honest: 'Tackling aggressive abuse of the VAT Flat Rate Scheme - technical note'

https://www.gov.uk/government/publications/tacklin...

Indeed.

There maybe some abuse going on I don't know about but my use of the FRS could never be described as abusive, I simply followed the rules.

[Eric Mc]

HMRC could never really explain whether they lost out under the VAT FRS. They have obviously now decided, after 15 years, that they really WERE losing out.

[ecs]

VAT between businesses baffles me; so I charge a company provide services to 20% VAT, then I pay HMRC 13.5% of what I've charged (soon to change), then the company I've provided services can reclaim the VAT they paid to me back from HMRC? It seems utterly pointless, or have I missed something?

[Eric Mc]

The goods or service eventually hit a customer who is not VAT registered - so HMRC gets to keep that VAT.

The "win" situation is that the vast bulk of the admin is handled by the trader - at little cost to HMRC. So it is a very cost effective method of tax collecting - for HMRC.

[alfie2244]

Outside and only got to Q7....had a play and eventually got an "undecided" on my 5th attempt.

https://www.gov.uk/guidance/check-employment-statu...

[daemon]

alfie2244 said:

Outside and only got to Q7....had a play and eventually got an "undecided" on my 5th attempt.

https://www.gov.uk/guidance/check-employment-statu...

Only got 7 questions. Deemed outside....

[ecs]

That seems stupidly simplified to me? Contractor Calculator's own test asks many more questions, HMRC's only seemed to care about substitution?!