This is the end of contracting...

This is the end of contracting...

Author
Discussion

AMDB9

Original Poster:

2,714 posts

206 months

Tuesday 10th November 2015
quotequote all
http://www.dailymail.co.uk/news/article-3307960/Os...

http://www.theguardian.com/politics/2015/nov/06/cr...

Contractors will be allowed to contract for 1 month and then will have to become an employee of the company they are working for. Has this government gone mad?

JohnStitch

2,900 posts

170 months

Tuesday 10th November 2015
quotequote all
"Ministers have yet to make a final decision on whether to introduce the change. They will want to see how businesses respond to the proposal at next week’s annual conference of the CBI."

Can't see businesses responding well to that - I'm sure most companies will want to keep the flexibility of using contractors, whilst also not having to pay them holiday, sickness, and all the other stuff that comes with permanent employees.


Edited by JohnStitch on Tuesday 10th November 18:38

madmover

1,725 posts

183 months

Tuesday 10th November 2015
quotequote all
JohnStitch said:
"Ministers have yet to make a final decision on whether to introduce the change. They will want to see how businesses respond to the proposal at next week’s annual conference of the CBI."

Can't see businesses responding well to that - I'm sure most companies will want to keep the flexibility of using contractors, whilst also not having to pay them holiday, sickness, and all the other stuff that comes with permanent employees.


Edited by JohnStitch on Tuesday 10th November 18:38
Couldn't agree more. I think we've seen the death of umbrella schemes etc but contracting will resume. It would decimate too many businesses should the proposal be accepted.

SidJames

1,399 posts

232 months

Tuesday 10th November 2015
quotequote all
I'm struggling to see where the Chancellor thinks he's losing money?

Surely the tax and NI that might have been paid for by the "employer" of the contractor is simply paid by the contractor instead. (is it the employers pension requirements that a contractor might choose not to pay on his own behalf?)

typical Daily wail also bleats about the ability to offset expenses, as though that's some sort of tax fiddle.

I appreciate that contractors paid in cash might be considered a risk to IR income, but what about management consultants, IT, etc.



AMDB9

Original Poster:

2,714 posts

206 months

Tuesday 10th November 2015
quotequote all
Sorry guys post name is a bit misleading! I meant to say is this the end of contracting!

CRB14

1,493 posts

151 months

Tuesday 10th November 2015
quotequote all
I'm in construction and this would kill the industry dead. HS2 and other desperately needed rail improvements will be a dead duck, crossrail the same, the much needed new build housing schemes will die, new schools and hospitals can be forgotten about. The government is hell bent on killing the country with this obsession on PSCs.

It's not all tax-dodgers that are one man band ltd companies.

0000

13,812 posts

190 months

Tuesday 10th November 2015
quotequote all
I can't see this being workable, but I guess we may find out.

Some Gump

12,671 posts

185 months

Tuesday 10th November 2015
quotequote all
Any credible links to read?

I've seen the title and the ail / guardian and haven't clicked knowing that one will be "govt killing the hard working man" in line with it's readership, and the other will assume "all Torres are bds"...

Eric Mc

121,775 posts

264 months

Tuesday 10th November 2015
quotequote all
Some Gump said:
"all Torres are bds"...
Bloody Spanish - coming over here nicking our jobs.

Wacky Racer

38,099 posts

246 months

Tuesday 10th November 2015
quotequote all
Eric Mc said:
Some Gump said:
"all Torres are bds"...
Bloody Spanish - coming over here nicking our jobs.
laugh

Mandat

3,879 posts

237 months

Tuesday 10th November 2015
quotequote all
Would these proposals affect me, as I'm a building surveyor working through my own limited company?

I works for a variety of different clients at any one time but mostly all projects last longer than a month or two, and some projects can go on for a year or more at a time, although my involvement is intermittent during that time. I'm well outside of IR35 but I don't understand how the new proposals would change the my current working practices?

jules_s

4,235 posts

232 months

Tuesday 10th November 2015
quotequote all
I'm guessing this is aimed at agencies not ripping off employers who would like to take on agency staff without the ridiculous fees for doing so?

98elise

26,368 posts

160 months

Wednesday 11th November 2015
quotequote all
jules_s said:
I'm guessing this is aimed at agencies not ripping off employers who would like to take on agency staff without the ridiculous fees for doing so?
No its aimed at taxing people who look like employees but are actually operating through a ltd company.

In some ways its justified I've worked with contractors who have been at the same company for decades doing the same role (in all other respects are an FTE)

For others its not as they truly bring some short specialist skills, or are filling a short term gap like a project.

Making someone a full time employee when they are on a 3 month contract is stupid. how does that work with pension, sickness, holidays etc.

It would be better if the government could find some sensible middle ground where the flexibility can stay, but you can mitigate the additional expense of that flexibility.

As an example my current contract means I have a long commute, and a short contract. My rail travel is 1k per month. If I were working as an employee I would either move, or get a job closer to home. Under the current proposals I will be moving back to full time employment.


CRB14

1,493 posts

151 months

Wednesday 11th November 2015
quotequote all
98elise said:
No its aimed at taxing people who look like employees but are actually operating through a ltd company.

In some ways its justified I've worked with contractors who have been at the same company for decades doing the same role (in all other respects are an FTE)

For others its not as they truly bring some short specialist skills, or are filling a short term gap like a project.

Making someone a full time employee when they are on a 3 month contract is stupid. how does that work with pension, sickness, holidays etc.

It would be better if the government could find some sensible middle ground where the flexibility can stay, but you can mitigate the additional expense of that flexibility.

As an example my current contract means I have a long commute, and a short contract. My rail travel is 1k per month. If I were working as an employee I would either move, or get a job closer to home. Under the current proposals I will be moving back to full time employment.
Agreed they do need to find some middle ground. There is no way a company will want to put people in full time roles if they are on a short term contract or are working on a consultancy basis.

If this is true I expect a massive backlash. Their dividend tax has already closed the gap considerably.

Eric Mc

121,775 posts

264 months

Wednesday 11th November 2015
quotequote all
Employment regulations do allow for part time working. There is no essential need to hire people as employees but treat them as non-employees.

Or is there?

mad4amanda

2,410 posts

163 months

Wednesday 11th November 2015
quotequote all
This may be relevant to the conversation I was having at work the other day. 2 of us sat doing the same hours and job for the same money I am an employee and get a holiday pay supplement , my colleague is self employed so does not get holiday pay . I pay the same amount per month in NI as he pays every 6 months, he gets all sorts of tax allowances for cars fuel food at work that mean he hasn`t paid actual tax for years.
He doesn`t employ anyone or create any wealth beyond his own. Yet even taking into account the fact that I get holiday pay he earns more than I do because he takes more of his pay home.
Yet apparently he gets the same state pension and access to relevant benefits as I do despite not paying anywhere near the same amount in how can that be right?

0000

13,812 posts

190 months

Wednesday 11th November 2015
quotequote all
IPSE have this template letter contractors may wish to use to send to their MP.

Eric Mc

121,775 posts

264 months

Wednesday 11th November 2015
quotequote all
mad4amanda said:
This may be relevant to the conversation I was having at work the other day. 2 of us sat doing the same hours and job for the same money I am an employee and get a holiday pay supplement , my colleague is self employed so does not get holiday pay . I pay the same amount per month in NI as he pays every 6 months, he gets all sorts of tax allowances for cars fuel food at work that mean he hasn`t paid actual tax for years.
He doesn`t employ anyone or create any wealth beyond his own. Yet even taking into account the fact that I get holiday pay he earns more than I do because he takes more of his pay home.
Yet apparently he gets the same state pension and access to relevant benefits as I do despite not paying anywhere near the same amount in how can that be right?
First line in HMRC's on line guidance on self-employed v' employed is "Whether a pesron is employed or self employed is not a matter of "choice". It is a matter of "fact".

They also give the following guidance in their manual -

ESM0003 – Introduction: determining whether an individual is an employee or self-employed

Whether an individual is employed or self-employed will depend upon the nature of the relationship with the person for whom the services are provided. Usually it will be easy to decide whether someone is an employee or self-employed. However, there will be many cases where it will not be so easy to decide. Where two individuals are engaged to carry out similar work, it is possible for one to be self- employed and the other to be an employee because they have been taken on under contracts with different terms and conditions.

'Office' and 'employment' are not defined in the legislation and the principles which determine whether an individual is an office holder or employee are derived from case law. In order to decide whether someone is employed or self-employed you have to obtain all of the relevant facts relating to the engagement and then interpret those facts in the light of this case law. This manual aims to provide you with the necessary guidance to do so.

For further guidance about offices see ESM2500 onwards.

For further guidance on how to determine whether an individual is employed or self-employed see ESM0500 onwards.

http://www.hmrc.gov.uk/manuals/esmmanual/ESM0500.h...


hornetrider

63,161 posts

204 months

Wednesday 11th November 2015
quotequote all
I really think this sthouse government ought to be going for the big corporates offshoring profits/debts and not paying tens or hundreds of millions in tax, rather than a few hundred thousand contractors saving a few thousand in tax here and there to give clients some flexibility in resourcing.


Eric Mc

121,775 posts

264 months

Wednesday 11th November 2015
quotequote all
That's left wing politics for you (have I entered some sort of warped universe?)