IR35 changes April 2020 4 January 2020 at 12:11PM in Cutting tax 22 replies 3.7K views

stphnstevey

Just wondered if anyone has been thinking about what they might do in April 2020, if anything without proper guidance?

uknick

What guidance are you looking for? The rules as to to in or out haven't changed, just who picks up the liability for any unpaid employment taxes.

If you're unsure as to the status of a role, you could try this link;

https://www.gov.uk/guidance/check-employment-status-for-tax

It's vastly more comprehensive than the last one.

DoctorStrange

I wouldn't bother with CEST - it's not fit for purpose and, despite what they say, HMRC don't stand by the results.

I'm not sure what you mean about "proper guidance" - the rules are highly likely to be implemented as they are in the draft leglislation so if you're still hoping they'll be changed and we'll all get new guidance I think you should start planning now based the current wording.

What advice are you looking for?

stphnstevey

3 months away and there is not definitive guidance. Politicians suggesting review during election promises. Many still expecting changes. Agencies some still not even aware, let alone prepared. Some companies boycotting all freelancers (HSBC, GSK etc) so don't fall foul of tax responsibilities

So YES, complete MESS, what more should expect from government?

CanadianDream

I'm going perm.


It's not worth it, contractors don't get sick pay, annual leave pay, pension, employment rights etc.


Also, if you go umbrella solution with the same client you will be proving to HMRC that you're always been inside IR35 and may have to pay back taxes which they are currently doing with the loan charge.

00ec25

CanadianDream wrote: »

I'm going perm.


It's not worth it, contractors don't get sick pay, annual leave pay, pension, employment rights etc.


Also, if you go umbrella solution with the same client you will be proving to HMRC that you're always been inside IR35 and may have to pay back taxes which they are currently doing with the loan charge.

presumably you are not going perm with one of your clients? If yes then same principle you mention applies anyway

00ec25

stphnstevey wrote: »

3 months away and there is not definitive guidance. Politicians suggesting review during election promises. Many still expecting changes. Agencies some still not even aware, let alone prepared. Some companies boycotting all freelancers (HSBC, GSK etc) so don't fall foul of tax responsibilities

So YES, complete MESS, what more should expect from government?

i garree HMRC has sent a letter to all GSK contractors, but as far as oi know GSK itself is not boycotting existing contractors as we have quite a few of them

stphnstevey

00ec25 wrote: »

i garree HMRC has sent a letter to all GSK contractors, but as far as oi know GSK itself is not boycotting existing contractors as we have quite a few of them

https://www.personneltoday.com/hr/barclays-and-others-urge-contractors-to-go-paye/

CanadianDream

I forgot to mention that going perm at current client also applies although I wonder if it would apply if they offered a different position?


It's a shame really, I currently work for a great company.

00ec25

stphnstevey wrote: »

https://www.personneltoday.com/hr/barclays-and-others-urge-contractors-to-go-paye/

which, as i said, relates that GSK has not yet decided one way or the other. That said, I know of some GSK contractors who have got a panic on and are looking to quit contracting as a result.
As far as GB Plc is concerned, I say that will be a very good outcome, as the expenses some of them were claiming were a perfect example of why a Ltd can be tax "efficient" in the right circumstances

DoctorStrange

As far as GB Plc is concerned, I say that will be a very good outcome, as the expenses some of them were claiming were a perfect example of why a Ltd can be tax "efficient" in the right circumstances

GB plc will suffer badly from this. The PAYE roles are offering far less by way of compensation so rather than getting say 35% of £120k HMRC will receive say 38% of £75k. A bigger slice of a smaller pie, and that's before the accountants, B&Bs, restaurants etc which will all lose out are included.

This is a misguided policy and will see the tax take reduce, but all we'll hear is what a success it's been when PAYE/NIC receipts are up (i.e. we won't hear that Corporation Tax, VAT, Dividend Tax receipts are all down).

Plus, a lot of the work is now being off-shored.

The policy is a disaster and a simple, new off-payroll tax would have yielded more money without destroying the market.