IR35

[counter_violent]

Debating with myself whether or not to send this to my dept manager as a reason not to go Ltd Co route.
Up to now i'm still classed as sole trader partnership and by the looks of things I would be better off maintaining this status. The problem is, the corporation I do the majority of my work for has decreed that they will only deal with Ltd Co's from here on in, despite the postponement of the IR35 .
IR35 , in my view has little to no chance of being implemented in the short to mid term given that the Govt will need people like us to drive the work forward (post Covid19 era)

Decisions, decisions!

Update.

Hmm ok, so i've spoken with an adviser who says, future status shouldn't affect historic status should the need arise to claim Govt support. In other words, the proofs required are already in place.

So i'm kind of reassured that I can continue on the journey towards Ltd Co status.

 

[Signalcalc]

IR35 is delayed until April 2021, when the whole process starts again! Although we are much wiser than we were a couple of months ago.

Unfortunately client work has dried up due to Covid19, a change freeze until the future is clearer.

The usual PSC Ltd company route is to enumerate with low PAYE and take the rest as dividends from company, it's tax efficient, however with the Furlough rules, you can only claim 80% of gross PAYE and then that is subject to tax and NI. So most PSCs are stuffed on low income without work.

However you are free to set whatever PAYE you like in a PSC Ltd company, but most don't exceed certain limits to be tax efficient, it depends on circumstances. Rishi Sunak was presented with the PSC problem and has largely ignored the helicopter money option for us, maybe he doesn't understand/appreciate the situation many PSC's are about to find themselves in, or maybe he is being advised by HMRC who offer no sympathy to the 100,000's about to be left high and dry.

The difference with permies is that all their income is PAYE and so most will easily reach the £2,500 limit, alot will still take a pay cut on this, but it's still around 5 times more helicopter money than a PSC is going to receive.

Permies also have a job to go back to, whereas PSCs are out of the market until they find something, potentially without helicopter money when the govt withdraws the benefit.

I will furlough myself from Monday and might as well take the helicopter money, it's better than nothing and about the only free item that can be claimed until the work picks up again, how long that will be is anyone's guess.

Just another 10 points of risk that PSCs take on to demonstrate to HMRC regarding IR35, not sure how they will be able to explain that we are disguised employees based on the collapsing economy and all the flexible workers with it, we are even carrying more risk than the self-employed, who seem to be getting fairer help in these torrid times.

 

[counter_violent]

Well the average PAYE numpty likes to bleat on about fairness in the system. There are reasons why they do what they do and we do what we do.

I'll not bore anyone with the details sept to say "shudda dun betta at skool"

 

[Signalcalc]

Another prime example of backward thinking of HMRC/UKGovt, it applies to anyone employed and in Furlough.

Just reading the restrictions placed on Furlough, to summarise, you are not allowed to perform any work or undertake any work training for the company you are employed by, you are allowed to undertake non-related work training though.

Huh?

So you have millions of employees scratching their arses, stuck at home with nothing to do and yet you can't utilise their time to upskill or provide business related training??

But they are allowed to do non-related training (presumably paid by the employee themselves)??

I just can't wrap my head around why you would have non-productive employees not even allowed to undertake training, at the prime time that they are able to undertake such training (assuming online training here).

Why? There must be some tax implication to all of this, but FFS! Way to go UKGov, you really have thought this through haven't you

[Withdrawn] Check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme

Find out if you’re eligible and how much you can claim to cover wages for employees on temporary leave ('furlough') due to coronavirus (COVID-19).

www.gov.uk

 

[counter_violent]

This is typical of how Govt and the institutions work in the UK.
Numpty employees kick up a stink on the pretence that they want fair taxation in the system, yet completely ignore the fact that the self employed have close to zero benefits that the employed workforce enjoy.
The Govt then react and pander to the employed numpties whilst creating total chaos in the self employed sector.

House of Lords publishes damning IR35 report

A damning House of Lords report into IR35, titled ‘Off-payroll working: treating people fairly’, has been published. Read the full story here.

www.qdoscontractor.com

Government must address IR35’s inherent flaws and unfairnesses, committee concludes - News from Parliament

Off-payroll working: treating people fairly report published

www.parliament.uk

 

[Signalcalc]

This is typical of how Govt and the institutions work in the UK.
Numpty employees kick up a stink on the pretence that they want fair taxation in the system, yet completely ignore the fact that the self employed have close to zero benefits that the employed workforce enjoy.
The Govt then react and pander to the employed numpties whilst creating total chaos in the self employed sector.

House of Lords publishes damning IR35 report

A damning House of Lords report into IR35, titled ‘Off-payroll working: treating people fairly’, has been published. Read the full story here.

www.qdoscontractor.com

Government must address IR35’s inherent flaws and unfairnesses, committee concludes - News from Parliament

Off-payroll working: treating people fairly report published

www.parliament.uk

The Lords report was already in the pipeline, the question is why did they leave it so late, this report looks like it has been released according to the schedule before Covid came along, it would have arrived too late for any corrective action to be taken as legislation woukld have been implemented by April 6th, so a token gesture?

It would surprise me if the Treasury and HMRC take any corrective action before the next implementation date, I'm not going to hold my breath.

Just as an aside IR35 only applies to PSC's, it doesn't apply to the self-employed (as defined by HMRC for taxation purposes).

 

[ironjaw]

Yup, in the same boat, I am a contractor. Will see what will happen now in April 2021.

 

[counter_violent]

The Lords report was already in the pipeline, the question is why did they leave it so late, this report looks like it has been released according to the schedule before Covid came along, it would have arrived too late for any corrective action to be taken as legislation woukld have been implemented by April 6th, so a token gesture?

It would surprise me if the Treasury and HMRC take any corrective action before the next implementation date, I'm not going to hold my breath.

Just as an aside IR35 only applies to PSC's, it doesn't apply to the self-employed (as defined by HMRC for taxation purposes).

Further update.

Since govt furlough came into being, I managed to get all three grants paid topped up by approx 60 days working pay.
Long story short, iv'e done quite well out of this arrangement. Interestingly another angle has come to light. As a sole trader partnership, One of the furlough rules is that you must intend to carry on trading in the same capacity once the furlough scheme ends, so this has played right into my hands so far as not going down the Ltd Co route. I can use this argument to kill any intentions that the company I contract to may have of trying to push me in that direction. With the added bonus that the dept manager will be having his piss boiled by my non compliance. Every cloud and all that jazz !

 

[ironjaw]

Introduce a statutory regulator for IR35 assessments​

Archived Petition: Introduce a statutory regulator for IR35 assessments

The Government should establish a statutory regulator to oversee IR35 assessment and empower those impacted by blanket / role-based employment status tax checks to enable them to challenge decisions, especially where these have not been made on an individual assessment.

petition.parliament.uk