IR35 - Self employed

[El Cid]

I was listing to BBC radio fours 'money box' it seems that IR35 is taxing employers more, because they are no longer being allowed to dodge tax.

 

My thoughts are that, it is unfair that two workers performing the similar tasks should be taxed differently.

 

It was saying public sector workers were being made to comply with tighter tax law, but the private sector was not being pushed into it, very unfair.

 

There was no mention of fines or prosecutions!

[Phili Buster]

Determination of whether your contract is caught by IR35 or is IR35 compliant can be extremely complex. The longer the contract the more chance of being caught by IR35. A tax introduce by Gordon Brown hidden away within the details.

[andyofborg]

My thoughts are that, it is unfair that two workers performing the similar tasks should be taxed differently.

 

it's the contract between the task requestor and task dooer which defines this not the task. if you use proper employees and not contractors then they all will be taxed the same.

 

It was saying public sector workers were being made to comply with tighter tax law, but the private sector was not being pushed into it, very unfair.

 

the change was forced on the public sector because they couldn't say no. it was mooted for the private sector but they complained.

 

There was no mention of fines or prosecutions!

 

the penalties for non-compliance generally start with the soul of your firstborn,

[El Cid]

Determination of whether your contract is caught by IR35 or is IR35 compliant can be extremely complex. The longer the contract the more chance of being caught by IR35. A tax introduce by Gordon Brown hidden away within the details.

 

Not much in the press about it, the media seem to want the story to be about the NHS workers leaving because of the tax changes.

 

Surely the story should be £millions for the exchequer, and any extra cost to the NHS because these staff are essential?

[andyofborg]

Not much in the press about it, the media seem to want the story to be about the NHS workers leaving because of the tax changes.

 

that's because that is what the issue is about.

 

the IR35 regulations were introduced in 1997 by Gordon Brown and was supposed to tackle the "disguised employee" problem. the general consensus is that it hasn't.

 

the current government recently amended the rules to move responsibility for compliance from the contractor to the commissioning body or agency the end result has been that many contractors working for public bodies have been ruled to be within the IR35 rules regardless of the actual situation.

 

if you are a contractor genuinely outside the regulations then this is an unwarranted and unfair seizure of your money by the government. Many have chosen to end their contract others have remained but adjusted their fees.

 

the correct solution for this situation is to remove these regulations and replace them with a workable solution. successive governments have failed to do this because contractors lack the clout to influence the government.

 

the suggestion to roll this change to the private sector was rapidly killed because they do have the clout to influence the government.

[taxman]

All that needs to happen is to reduce or remove the employers National Insurance. Then employers/contractors couldn't give a toss about the STATUS of their workers.

[El Cid]

that's because that is what the issue is about.

 

the IR35 regulations were introduced in 1997 by Gordon Brown and was supposed to tackle the "disguised employee" problem. the general consensus is that it hasn't.

 

 

Its just like the Uber issue, the employers want cheap Labour, they don't want to pay the higher rate that will attract the workers, so they attract some workers by reclassifying the role to avoiding tax.

[Supertramp]

Its just like the Uber issue, the employers want cheap Labour, they don't want to pay the higher rate that will attract the workers, so they attract some workers by reclassifying the role to avoiding tax.

 

I'm not sure it would work out cheaper? Can a tax man work it out? Say £450 a day vs a £45k salary.

[andyofborg]

All that needs to happen is to reduce or remove the employers National Insurance. Then employers/contractors couldn't give a toss about the STATUS of their workers.

 

what actually needs to happen is for there to be a statutory definition of self employment with sensible and understandable tests to define it.

 

everything else flows from that

 

---------- Post added 26-11-2017 at 08:48 ----------

 

Its just like the Uber issue, the employers want cheap Labour, they don't want to pay the higher rate that will attract the workers, so they attract some workers by reclassifying the role to avoiding tax.

 

no it's not really like that.

 

in some ways, it's a reflection of the obsession with all governments since the mid 1980's of not increasing the headline tax rate. there have been loads of twiddles at the edges but no real significant change.

 

instead, successive governments have increased the rates of both employer and employee national insurance to balance the books.

 

this make schemes to avoid national insurance, particularly employer contributions, attractive. IR35 was intended to close some of those down, it's not really worked.

 

The Uber case doesn't really impact on IR35.

 

a proper definition of self employement would be good, possibly coupled with a wider review of taxation.

[El Cid]

The Uber case doesn't really impact on IR35.

 

a proper definition of self employement would be good, possibly coupled with a wider review of taxation.

 

Uber lost right to classify UK drivers as self-employed. They were self-employed because it was cheaper for the employer.

 

Uber drivers are not self-employed and should be paid the “national living wage”, a UK employment court has ruled in a landmark case which could affect tens of thousands of workers in the gig economy. ... Uber immediately said it would appeal against the ruling.