Self employment and IR35

I am all in favour of a different tax regime for people who work for themselves. Such a lifestyle means that an individual depends on winning and completing business to get paid. There is no holiday pay or big company benefits when the customers dry up. The tax authorities need to treat the self employed fairly and understand the nature of their cashflows.

There are a few very well paid people who claim to be self employed but who earn their income from a single source. Here the tax authorities may well be right to challenge them and say they are effectively employees of the source of their income. Why don’t they pay National Insurance under the employer/employee scheme that applies to the rest of us with a single employer?

The wish to do this should not extend to a clampdown on many others who are genuinely self employed but may have won a decent contract which for a bit provides an important part of their income. I am pressing for reform of the IR35 rules to try to prevent it becoming a dampener on enterprise and an attack on the self employed. The PM has promised to review it. TheLib Dems have also promised a review in their Manifesto but are trying to make out they go further.

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203 Comments

  1. Mark B
    Posted November 22, 2019 at 5:35 am | Permalink

    Good morning.

    The PM has promised to review it.

    Politician speak for; We will give the impression we will do something but won’t”

    Proposals which were to become IR35 was, I believe, placed before Mrs.T and was dismissed. When the New Labour government came in in 1997 the Treasury and what is now HMRC lobbied for it as convinced Labour that it would bring in extra revenue. I do not have figures to hand but, from a website set up by contractors, Shout99, they dispute that IR35 ever succeeded in bringing in the monies claimed.

    From Gordon Brown to Philip Hammond (whatever happened to him) all Chancellors have stood at the despatch box and claimed that, a person leaving a job on a Friday and then starting the same job at the same desk on a Monday but only contract was not someone who was self employed. And this is true ! But someone who takes on a contract for say 6 months and then another with a different client after that is someone who is self employed.

    The claim that they are robbing the revenue of money is also false. The money they get goes into the productive economy – Accountants, suppliers etc. It does not go back to greedy government departments for them to waste. Government, through VAT, NI, CT and tax on earnings gets the money back in the end. It just changes hands a few more times.

    IR35 Has become a draconian law and needs to be simplified and watered down. No individual can ever be allowed to leave a company and return to it as self employed for at least another 12 months. And no self employed person can work for a company for 12 months or longer, and return for at least another 6 months. This keeps the market fluid.

    • Martin in Cardiff
      Posted November 22, 2019 at 7:43 am | Permalink

      It is the cynical employer, and not the employee, who should be challenged over their insistence that their operators be self-employed, and yet also demand that they be available at all times solely for them.

      This is widespread, and simply a way of avoiding holiday, sick pay, pension contributions etc. on people who are de facto employees.

      • Al
        Posted November 22, 2019 at 3:30 pm | Permalink

        No – this is how UK plc succeeds in IT whilst spending the minimum on training.
        Contractors quickly spread new technology knowledge and approaches around the industry.

        • Al
          Posted November 23, 2019 at 1:05 pm | Permalink

          Please watch for usernames already in use.

          My personal concern is those roles where contracting through Ltds is unavoidable, e.g. PCI DSS work where the investigator must carry corporate insurance that is not available to individuals, but obviously cannot be an employee of the firm they investigate.

          Exclusivity during the duration of a contract may also be required due to security concerns – e.g. contract work for HMRC.

    • Alan Jutson
      Posted November 22, 2019 at 8:41 am | Permalink

      Mark

      The simple case is that Ministers of all Parties of all colours do not like the self employed because they find it difficult/impossible to control them, thus because they do not trust them, they try to put them in a box to restrict their actions ,hence IR35 was set up as that box to try and keep them in their so called place.

      So instead of encouraging such people to succeed earn more money grow their businesses, set up a company, employ more people, they have tried to restrain them.

      Simply daft as most people start a business by trying part time self employment first, then full time self employment, before eventually expanding and setting up a company, its the natural progression of human nature.

    • Hope
      Posted November 22, 2019 at 8:55 am | Permalink

      The Tory secretary to the Treasury is bright quick and relates well to the public. Suggest your party uses him more. I also suggest you go on the attack to the most extreme left wing IRA sympathising Labour anti Semite party ever. Even the Sun is able to articulate better damping response to the Labour manifesto that will destroy business, destroy jobs, destroy aspiration, destroy hard work because everything is free. They will stop aspiration and good schools through hate and envy, they will punish anyone who strives to make a bette life or get on through social mobility. They want a race to communism, starting to go back in time to strikes, winters of discontent, lights GOP out where candle use is common place as we lived through the seventies. This is Corbyns high tax punitive manifesto.

      It is not possible to build that many houses and still believe it helps climate change, the house building will never catch up with Labours’ mass immigration. Free university fees while remaining in the EU means free university fees for all EU students! That is what happens in Scotland at England’s expense.

      Good grief JR, get your party to stop out bidding th half wits and show what an utter reckless folly the manifesto is. Otherwise move aside for the Conservative Brexit party.
      Tusk criticises the U.K. But Johnson signs up. Or to criticise the EU! Get real.

    • formula57
      Posted November 22, 2019 at 10:46 am | Permalink

      @ Mark B “No individual can ever be allowed to leave a company and return to it as self employed for at least another 12 months.” – a measure that would be viewed as an unreasonable restraint upon trade surely?

      • Mark B
        Posted November 22, 2019 at 3:21 pm | Permalink

        Perhaps ? But that was just a suggestion. What gave the Treasury and HMRC their case was abuse such as that. Remove the abuse and all should be well.

  2. Lifelogic
    Posted November 22, 2019 at 5:56 am | Permalink

    IR35 is a disaster and will make the economy far less efficient. Just lower and simplify taxes for all and have a fiscal level playing field. If two people (or a business and a person agree to contract for one to be self employed so be it. Get the government out of the way. Freedom and choice for everyone please.

    The other thing that drives self employment is the absurdly restrictive employment laws. You no longer employ some one you virtually have to adopt them. This creates lots of essentially parasitic jobs for people in HR and the legal industry and damages productivity hugely. It means schools cannot easily fire useless teachers, hospital useless nurses, admin people and surgeons (people even die due to these employment law). It benefits lazy and incompetent employees and damages the good employees who end up covering for them.

    I have been told many times by small business owners that they used to employ people but after some bad experience or other (due to daft employment laws and anti business tribunals) they would never take anyone on again. What vast damage to the economy, job availability and indeed to good workers does this PC lunacy and employment red tape cause cause?

    • Iain Gill
      Posted November 22, 2019 at 7:17 am | Permalink

      Racism, discrimination, etc should be equally unlawful against a freelancer as it is against PAYE workers. And remedies need to be cheap for the abused. But much evil discrimination is class based, and against regional accents, and all that should be outlawed as much as racism.

    • Anonymous
      Posted November 22, 2019 at 8:58 am | Permalink

      +1

      In public services there are many employees swinging the lead. Private (small to medium) businesses could not sustain it.

    • Lifelogic
      Posted November 22, 2019 at 10:29 am | Permalink

      Also if you are really to try to eliminate the gender pay gap you would have to discriminate against men very heavily indeed. Especially in computer programming, engineering, maths, physics, mechanics and the likes.

      I note that on the BBC they only ever seem to use female engineers, scientists and similar to comment on things now. Though they do have that rather odd Manchester quantum physics presenter chap. One of the few physicists that has actually fallen, hook line and sinker, for the climate alarmist religion & “BBC think” propaganda. Corbyn’s physicist brother is far more sound on the issue.

      • Iain Gill
        Posted November 23, 2019 at 12:05 am | Permalink

        as jordan peterson points out you would have to force women to make different career choices, work away from home more often, work weekends more often, work longer hours, work the riskier jobs and projects, and so on, which on average they of their own free will tend not to choose to do (and hence are, on average, less experienced and skilled as the equivalent average male of the same time served).

  3. Lifelogic
    Posted November 22, 2019 at 6:06 am | Permalink

    Of course the only reason we have employers NI, employee NI and income tax into three bits is to disguise the very high taxes we have on income in the UK. Even on basic rate tax the three together are about 43% of income, then when you spend it you pay up to another 20% in vat or 12% if spent on insurance. Plus council tax of course, and you have artificially high energy bills due to moronic government manipulation and the smart meter agenda from the EU.

    The absurd complexity of having these three taxes plus the new enforced pension rules costs businesses, individuals and government a fortune in admin. All to pretend income tax is lower than it really is. Another parasitic job creation scheme from the fools in government and the civil service.

    • Shirley
      Posted November 22, 2019 at 7:00 am | Permalink

      +1

    • Iain Gill
      Posted November 22, 2019 at 7:12 am | Permalink

      It is even more ridiculous that many visa categories of foreign workers are allowed to work completely free of both employees and employers national insurance. And allowed things tax free as supposed expenses in categories Brits working far from home are not allowed to claim. And they get full tax allowance even if only working part of a tax year, instead of the allowance being pro rata with time in the country.

      It’s almost as if the political class want them to undercut and displace locals from jobs.

    • Ian @Barkham
      Posted November 22, 2019 at 9:49 am | Permalink

      Although if National Insurance was just that – and the benefits it provided was for those insured we could see it from a different perspective.

      • Al
        Posted November 25, 2019 at 4:54 pm | Permalink

        It was somewhat annoying, when I took a sabbatical and paid my National Insurance coverage out of pocket for that year to ensure my pension rights were maintained, to find that people who didn’t bother to pay got exactly the same cover and pension.

    • Bob
      Posted November 22, 2019 at 10:44 am | Permalink

      @lifelogic
      You forgot to mention that duty & vat on a litre of fuel works out to 168%.

      That works out to about £1500 annually based on average mileage of 10k, assuming consumption at 40 mpg.

    • Mark McMillan
      Posted November 22, 2019 at 4:55 pm | Permalink

      This comment is nonsense.

      Taxes are far higher in many fully developed EU countries, including across Scandinavia. This is the main reason their public services aren’t in a critically bad state and there aren’t swathes of disenfranchised people sleeping on the streets. Any society must ensure appropriate taxes are paid in order to provide good quality working services.

      There is one pot of money that pools corporation tax, national insurance, income tax – among other taxes. For richer people the percentage burden increases of taxes does increase but so does their final balance income in their bank account; an entirely normally situation in any fully developed country.

      I’m lucky enough to have worked in Denmark, Sweden and Norway and can see the tangible benefits a good quality tax system and well managed welfare state can provide.

      The main question you should be asking yourself is: why the illogical approach in the UK to allowing (Named US companies ed) and other companies to evade (aggressively avoiding) tax through offshore loopholes. This is not allowed throughout Scandinavia and it is absurd that HMRC have implemented ‘sweetheart’ bills that are substantially lower than they should be for services and products delivered in the UK from UK companies but routed through strange franchised offshore schemes.

      End the low overall tax on these new-style companies and let’s improve the quality of public services in the UK. For this reason I simply cannot recommend voting Tory at this election. They are ignoring the obvious solutions and are in favour of big business tax evasion, crumbling public services and the targetting of the middle classes exclusively rather than the truly rich, super rich and international tax avoiding companies that refuse to pay due tax for goods purchased from their UK entities.

      Fight with your vote.

  4. Lifelogic
    Posted November 22, 2019 at 6:19 am | Permalink

    So Labour will put VAT on private school fees describing it as a tax loop hole!

    People who use private schools pay many times over already in taxes for other people’s children, then in taxes on the extra have to earn to pay the fees, then the fees and then 20% VAT if Labour get it. How on earth is this a tax loop hole? No one at a state school pays any fees at all or any VAT.

    It will destroy many good schools and will be a new cost for the state as many people will then choose to go to state schools pushing the costs back onto the state and perhaps not bother to work so hard either. It will cost far more than it raises.

    Nearly everyone should go to private schools. They should get an education voucher
    They can top up if they wish and schools should compete in various ways and innovate. Kill the dire state virtual monopoly in education that clearly fails so very many children.

    (I went to a state grammar school and my children have been to both state and private schools)

    • Ian Wragg
      Posted November 22, 2019 at 8:21 am | Permalink

      ‘ll. I see the government deficit last month was the highest for 5 years at £11billion. So much for a fiscally competent treasury.
      We are supposed to be reducing the debt 10 years after the crash. It’s a bit like immigration. Say one thing and do the opposite.
      Farage came over well last night

    • Roy Grainger
      Posted November 22, 2019 at 8:42 am | Permalink

      A separate issue is the charitable status of private schools. They simply aren’t charities and this should status be removed.

      • Lifelogic
        Posted November 22, 2019 at 5:03 pm | Permalink

        Education qualifies as charitable activity. This only really affects the schools that have large endowments. Most do not.

    • Anonymous
      Posted November 22, 2019 at 9:14 am | Permalink

      My boys went to grammar. It’s a bit like shopping at Lidls.

      In a downturn all of a sudden a load of upper middle class people turn up in 4x4s saying how clever they are having found a cheap alternative.

      Having stopped being a good Tory working class boy Andy may be about to find out what happens when the likes of me stop voting. The selection to get into grammar is intense – that’s if any will be left.

      • Lifelogic
        Posted November 22, 2019 at 5:05 pm | Permalink

        Mrs Thatcher as Education Secretary and then as PM closed very many down alas.

    • Ian @Barkham
      Posted November 22, 2019 at 10:04 am | Permalink

      I am more amused by the way a Public School has morphed into being Private.

      The primary aim of Labour is to remove from the country those dissenters that don’t support a Centralist Communist’s society. When you cant persuade people to support you and accept your rule you make it difficult for them so they move. The Mayor of London shows this practice well, crime had to be permitted to rise so the law abiding who generally don’t support Labour move out.

  5. Lifelogic
    Posted November 22, 2019 at 6:23 am | Permalink

    I see that in typical BBC bias more the Election podcast programme show some woman haranguing NIGEL Farage for some time with a preprepared and total inaccurate attack on him but then fails to even show his rebutsl of the drivel she came out with.

    • Lifelogic
      Posted November 22, 2019 at 6:33 am | Permalink

      Then Question Time had an English teacher dressed in full burqa complaining about Boris’s post box comments. Boris was of course actually defending people’s rights to wear such outfits. But other people (in a supposedly free country) surely have the right to comment on these outfits as they wish? Or maybe they no longer do have alas?

      I wonder why the BBC chose her rather silly question? It was encouraging that the people in the audience were mainly not taken in by Labours joke manifesto con trick that would clearly destroy the wealth creating economy in no time at all damaging everyone.

      • Beecee
        Posted November 22, 2019 at 9:08 am | Permalink

        The Post Box comment/joke was first made on the BBC ‘Have I got news for you’ programme.

        Seemingly not a problem then!

      • Anonymous
        Posted November 22, 2019 at 9:22 am | Permalink

        I want people to integrate.

        No-one can integrate in a burqa – then they demonise us for it.

        We have bent over backwards to accommodate people yet, at best, our own politicians say nothing to praise us and do nothing to defend us.

        So now a real Tory to me is Andy and Newmania.

        All they do is slap about the Tory working class, which is what really caused Brexit. Sawing away at the branch they are sitting on.

      • Bob
        Posted November 22, 2019 at 11:32 am | Permalink

        @lifelogic
        Are you still funding the BBC?

        • Lifelogic
          Posted November 22, 2019 at 5:09 pm | Permalink

          At one home alas yes, as my wife and children demand that I do! I do find their endless bias, lack of science and general left wing “woke”. PC stupidity quite funny. But I could get quite enough of that on the radio.

      • Martin in Cardiff
        Posted November 22, 2019 at 2:45 pm | Permalink

        Of course people have a right to make any comment that they wish, that does not break the law, e.g. incite a crime.

        Everyone else is also free, to form an opinion about the person making those comments, and in turn to exchange and to publicise those opinions.

        You appear perhaps to suggest that the latter should be prevented from exercising the same freedoms as the first.

        • Edward2
          Posted November 22, 2019 at 9:02 pm | Permalink

          Not correct Martin.
          Anyone who feels hurt by speech they have directed at them can register that as a hate crime which Police have to record and investigate.
          Incite a crime was the old threshold.

          • dixie
            Posted November 23, 2019 at 6:47 am | Permalink

            and once recorded, no matter how unfounded, will count against you in DBS checks.

  6. Shirley
    Posted November 22, 2019 at 6:24 am | Permalink

    IR35 should tackle the problem at source, as was originally intended until big business used their ‘influence’ to get the tax liabilities transferred to small business.

    It should attack those who engage contractors, not the contractors themselves. The hirers are the biggest beneficiaries, ie. they don’t pay NI, they don’t pay holiday or sick pay, or any of the other employee entitlements. They don’t pay for training or updating of skills. Why do you think these companies insist that their ‘freelancers’ must be limited companies? It’s the only way they can escape the risks of self employed freelancers being classed as ’employees’, and they can pass the costs and risks over to the contractor.

    • Lifelogic
      Posted November 22, 2019 at 6:59 am | Permalink

      If you attack people who contract work out you clearly are indirectly attacking the contractors as they will have far less choice of people to contract with and thus find they get lower fees or have more onerous terms and red tape to comply with.

      Similarly if you attack landlords with extra taxes and red tape you reduce the availability of places to rent and push up rents for tenants.

      • Shirley
        Posted November 22, 2019 at 7:54 am | Permalink

        Why give a huge disadvantage to companies that employ people and a huge advantage to companies that hire freelancers instead of employing people?

        • Al
          Posted November 22, 2019 at 4:01 pm | Permalink

          Companies generally do both – run a proportion of employees with a contractor capacity that is burstable.
          Companies generally don’t want to make permanent people redundant – having a part contract workforce allows for expansion in uncertain times.

          • Al
            Posted November 25, 2019 at 7:49 pm | Permalink

            Dear Al,

            That depends entirely on the industry, the legislation in play and which roles the company needs to fill – journalists for example may be under contract to several newspapers at the same time.

    • acorn
      Posted November 22, 2019 at 11:08 am | Permalink

      The “fee-payer/engager” becomes responsible for tax and NI payments of a “deemed employee” in the private sector from next April. https://www.gov.uk/guidance/fee-payer-responsibilities-under-the-off-payroll-working-rules

      • Tony English
        Posted November 25, 2019 at 11:33 am | Permalink

        Not if the fee payer insists on engaging contractors via an umbrella company – as the big banks are. Then the contractor day rate pays PAYE. Employees NI, Employers NI and the apprenticeship levy. But still retains the zero notice period, the enforced furloughs and gets none of the employee benefits.

  7. Sea Warrior
    Posted November 22, 2019 at 6:40 am | Permalink

    This doesn’t really affect me but I am amazed at the rake-off that umbrella companies are able to take from contractors forced to use them. I’ll continue to think of both umbrella companies and recruiters as add-no-value leaches attached to the skin of our commerce.

    • Iain Gill
      Posted November 22, 2019 at 7:05 am | Permalink

      Yes the recruitment business does a pretty poor job for society, and causes many of the biggest problems in society.

      • Anonymous
        Posted November 22, 2019 at 9:26 am | Permalink

        My friend is in recruitment. He says his job is to provide clients a buffer against race discrimination laws.

      • Fred H
        Posted November 22, 2019 at 6:01 pm | Permalink

        and after many many experiences, up close and personal, with Human Remains depts, they typically contribute nothing to the manager wanting to employ. Possibly hurdles, but rarely constructive.

        • Iain Gill
          Posted November 23, 2019 at 12:07 am | Permalink

          yep HR depts are generally just an overhead, and dont even understand the legal framework of employment and subcontracting so just call lawyers in at the slightest question

    • Ian Wragg
      Posted November 22, 2019 at 8:24 am | Permalink

      A bit like the gangmasters that the government does nothing to discourage. Fleecing the workforce.

    • HMRCVictim
      Posted November 22, 2019 at 1:59 pm | Permalink

      The complexity of the UK tax code (21,000 pages – the longest in the world) is a huge drain on the economy. All those advisers and lawyers who add nothing to the economy at all, but people have to pay for in order to *try* to remain compliant. And after all that effort, HMRC come out with their ridiculous and subjective definition of tax avoidance as being “gaining an advantage that is not in the spirit of the law” and use it to justify passing retrospective laws which destroy people who did all they could to make sure they were obeying the law. I know people who died due to this.

      HMRC itself and the tax system in general need to be torn down and rebuilt from scratch.

      • Lifelogic
        Posted November 22, 2019 at 5:14 pm | Permalink

        Indeed it wastes billions of hours and billions of pounds. Oh and do not try ringing HMRC as a they hold you on the phone for 20 minute then give you a message saying we are busy get lost and hang up. Or if you do get through they know far less about the tax system than you do! The rarely reply to letters either I find though they do seem to file and hold them.

        • Iain Gill
          Posted November 23, 2019 at 12:10 am | Permalink

          there is no reason HMRC could not be made more free market and responsive to citizens. allow individuals to choose which tax office deals with their affairs, and allow the competitive pressure force change.

  8. Lifelogic
    Posted November 22, 2019 at 6:51 am | Permalink

    Plus you have all the costs of getting to and from work, lunches out and working clothes to fund out of already very highly taxes income and perhaps childcare and other resultant costs. So it is even worse than 43% that you lose in reality.

    Needless to say MEPs and MP of course get their travel costs refunded tax free and Lords get £300 a day tax free for just turning up. In the case of MEP they can even make a large surplus tax free profit on them. They also get a (free I think) Crèche and heavily subsidised bars, shops and restaurants. If private companies however pay for travel to and from work, lunches and similar it generally suffers tax and NI too.

    One law for them and another for you.

    • Anonymous
      Posted November 22, 2019 at 9:30 am | Permalink

      Plus the tax on getting yourself educated to be useful enough to be employed. Salary sacrifice for three years is no longer enough – you have to take on tuition fees borrowed at a usurious 6% from day 1. £120 a week for a grotty room in an area of low employment.

      We are already a Corbynista state.

      • Lifelogic
        Posted November 22, 2019 at 5:17 pm | Permalink

        Indeed a medic can come out of university with debts of £150K and six years loss of earnings. Then often gets treated like sh*** by the NHS!

        • a-tracy
          Posted November 22, 2019 at 9:46 pm | Permalink

          I thought medics started earning in training years 5 and 6?

        • Anonymous
          Posted November 22, 2019 at 10:41 pm | Permalink

          Hence so many quit the country.

    • Ian @Barkham
      Posted November 22, 2019 at 9:53 am | Permalink

      To right, all laws and costs should be applied equally to all those in a society. The idea that because of a position that has been conferred on someone makes them different to everyone else is absurd.

  9. Narrow Shoulders
    Posted November 22, 2019 at 6:52 am | Permalink

    A level tax playing field, that is what the PAYE serfs want (and to pay less tax of course).

    IR35 is a good thing when targeted correctly. I am pleased you are pursuing this but if a contractor makes at least 90% of their earnings for the tax year from one source they should be taxed as an employees like the rest of us.

    • Lifelogic
      Posted November 22, 2019 at 10:33 am | Permalink

      Why should they be “employed” if they do 90% for one person? Perhaps they are both happier and more efficient not being?

    • libertarian
      Posted November 22, 2019 at 2:33 pm | Permalink

      Narrow shoulders

      Why? They dont get all the benefits that PAYE wage slaves get like workplace pension, sickbay, holiday pay. Theres this weird belief that somehow self employed people pay less tax than employees , its not true

      • Narrow Shoulders
        Posted November 22, 2019 at 6:40 pm | Permalink

        Totally agree @lib. Many of these people are employed and should get the benefits that come with being employed which their employers are saving.

        But if they are not truly self employed they should not get the tax advantages available to the self employed. To be clear I am all in favour of reward for risk. 90% from the same source is employment not risk.

    • Al
      Posted November 22, 2019 at 4:03 pm | Permalink

      So its ok for an outsourcing company to provide someone as a contractor for years and pay them a fraction in salary and tax. But not for a small company?

    • Iain Gill
      Posted November 24, 2019 at 10:23 am | Permalink

      Not when they are working far from home and need to fund hotels etc, indeed often working abroad.

  10. Dominic
    Posted November 22, 2019 at 6:53 am | Permalink

    The Tory party’s been abusing the private sector for many years now as they seek ways to finance their capitulation to Labour’s public sector-client state construct. It’s not good enough for a party that purports to promote private capital to abuse the people who pay the taxes to finance their public sector expansion projects

    It’s really quite simple. The average self-employed person earns very little and enjoys zero benefits. They are abused because they can be abused. They’re an easy target and they don’t have a unified voice

    This government could remove all low paid workers from income tax if they decided to reform Labour’s client state. This government has chosen to a different path for political and party convenience.

    Keep pandering to Labour and their union allies in the public sector and then send the taxpayer the bill

    • Hope
      Posted November 22, 2019 at 8:34 am | Permalink

      Absolutely. Tory party should Stop marching left would be a good start.

  11. Iain Gill
    Posted November 22, 2019 at 7:01 am | Permalink

    People who take sequential short term assignments far from home should not be paying for hotels and travel out of taxed income, regardless of how they are paid. In many industries assignments average far less than 2 years even for supposedly secure paye jobs. Travel etc should be included in calculations about which tax band and what benefits you are entitled to.

    The state needs to figure out how it wants freelancers to be setup legally, is it personal service company, via umbrella, sole trader? Because all have had punitive treatment. There needs to be a way that limits risk in the way personal service companies do.

    You need to come up with firmer plans than this.

    If your tax affairs are so complex, primarily due to government rules, that you need an accountant then you should not have to pay for them out of taxed income.

  12. sm
    Posted November 22, 2019 at 7:21 am | Permalink

    I am going to ask what will no doubt be perceived as an astonishingly naive question – why should freelancers be taxed differently to anyone else?

    • agricola
      Posted November 22, 2019 at 7:48 am | Permalink

      Because they have business costs that the employed know nothing about, and take great risks with their lives and that of their family that the employed could not imagine in their feather beded existance. It is the risk of failure and financial events outside their control that requires to be recognised. You talk as if you would scatter your prized seeds in a field of weeds, saying take your chances. The self employed need to flourish so they can employ those who want a more certain life outcome and are not prepared to take the risk of self employment.

    • Ian Wragg
      Posted November 22, 2019 at 8:25 am | Permalink

      Because they don’t get the same benefits

    • Peter Ryder
      Posted November 22, 2019 at 9:14 am | Permalink

      “why should freelancers be taxed differently to anyone else?”

      Because they incur costs that employees don’t: holiday and sickness is unpaid, training is not only unpaid but you have to finance it yourself and long commutes or living away from home are common. On top of that you have to pay for liability insurance, insurance against I.R. investigations, accountancy services and contracting agencies.
      Writing that reminds me of why I thought retirement was preferable to being an IT contractor.

    • Ian @Barkham
      Posted November 22, 2019 at 9:56 am | Permalink

      Primarily it is a BBC concept, they are above the rest of us and have a different sense of self importance.

    • flint
      Posted November 22, 2019 at 11:07 am | Permalink

      A naive answer might be that “proper” freelancers/contractors operate differently.

      They don’t receive normal employment benefits – training, sick pay, holiday pay, pensions etc.

      Certainly in my field (IT) contractors are used to rapidly staff up projects where a company (or govt dept) doesn’t have the necessary free bodies or the in-house expertise. Contractors can also be let go more rapidly as they are generally outside normal employment law.

      Around the turn of the millennium there was wave of outsourcing, and it seemed one of the side effects was this “walk out of the door on friday as an employee, come back monday as a contractor and do the same job” as it could me made to look like outsourcing – getting an employee off the books. This, I believe, is the scenario IR35 is was intended to correct.

      The BIG problem with IR35 is the uncertainty. HMRC don’t fully understand their own rules so enforcement has been spotty, arbitrary and some of the penalties severe. Because of the risks to both employers & contractors many (of both) are planning to abandon the practice completely in spite of the potential implications for staffing and expertise of existing and future projects.

    • Bob
      Posted November 22, 2019 at 11:42 am | Permalink

      Because they’re taxed on profits and they don’t get paid leave or sick pay.

    • SteveP42
      Posted November 22, 2019 at 1:39 pm | Permalink

      They have no security , no holiday pay, sick pay, pension, life insurance, critical illness cover, and have to pay their own liability insurances – all of the above are self funded but are ‘perks’ for employees.

      The ‘fair share’ needs to include all of the above things not just tax.

    • libertarian
      Posted November 22, 2019 at 2:28 pm | Permalink

      sm

      Because sole traders ( freelancers) dont pay on paye, their tax is calculated based on the “profit” of their business but taxed at normal income tax rates whilst having to potentially also pay 2 types of NIC, they of course dont get holiday pay, sick pay , maternity leave etc etc

      • acorn
        Posted November 22, 2019 at 6:21 pm | Permalink

        Libby, why do you always say “their” and “they”. If you are a genuine international businessman, I would expect you to say “I” or “we”???

        • agricola
          Posted November 22, 2019 at 9:03 pm | Permalink

          I makes it specific to her situation.They makes it more general to the self employed. It is the way our language works. I would point out from personal experience that the self employed are not all the same. I was defined as zero rated in VAT terms, the majority are not. By using the word they she is arguing in general terms.

        • Edward2
          Posted November 22, 2019 at 9:04 pm | Permalink

          What an odd comment by you acorn.

    • Mark B
      Posted November 22, 2019 at 3:07 pm | Permalink

      No show, no dow !

      Staff can get sick pay and maternity leave. Self employed cannot.

    • Al
      Posted November 22, 2019 at 4:09 pm | Permalink

      They shouldn’t be – they should be taxed the same way as large companies that provide contract staff, and who pay dividends to shareholders.
      The fundamental issue is that UK plc has to be competitive for big business through minimally taxing only profits.
      Whereas employees have to be taxed a huge amount (income, NI, employers NI, pension contribution).
      IR35 takes small businesses who face greater risks and costs than big businesses and taxes them like employees (who in turn have much greater protections).

  13. Posted November 22, 2019 at 7:22 am | Permalink

    Cue a rant from Lifelogic. I find it extraordinary that when ‘brainstorming’ the changes, the tax authorities/Treasury did not identify the unintended consequences of their actions and equally it has taken so long to get only as far as a ‘promised review’. The changes in the tax treatment of pensions contributions is another one with its effect on the NHS and therefore the public, that is still only ‘in consultation’. Along similar lines we see people locked into expensive mortgages where to switch would mean reducing their payments, again an unintended consequence that our lawmakers seem incapable of doing anything about.

    Should you get re-elected and best wishes for that, you should form a pressure group to identify these nonsenses to push HMG into far quicker action than at present.

    • Iain Gill
      Posted November 22, 2019 at 9:18 am | Permalink

      NHS workers are not the only ones suffering these rubbish pension rules, and many outside the NHS are equally vital to the country, the NHS should not be getting even more special treatment.

  14. Andy
    Posted November 22, 2019 at 7:22 am | Permalink

    Self employed people should pay the same taxes as everyone else.

    Creating exceptions and exemptions simply creates loopholes to exploit.

    Personally I’d like to simplify the tax system – and introduce a wealth tax.

    Crucially we need a punitive tax on inherited wealth.

    We have a Tory party stuffed full of people who are where they are because daddy was rich.

    Let the cream rise to the top on merit – and not because papa paid for Eton.

    It would be amusing to see Mr Mogg and others living in a 2 bed semi on a council estate.

    • agricola
      Posted November 22, 2019 at 7:35 am | Permalink

      An accurate description of socialism, the dead hand of envy that would destroy the UK for good. A comprehensive misunderstanding of human nature, I pray that the UK citizenry have more sense and you and the marxist Corbyn are soundly rejected.

    • Martin in Cardiff
      Posted November 22, 2019 at 7:52 am | Permalink

      The injustice, Andy, is that wealth and property are not fairly distributed generally throughout the people to start with, not that it is possible to pass what you have, or some of it, to your descendants.

      The logic of inheritance tax taken to its conclusion would mean that every person would start out in life dispossessed, and its hard to see how that would be a good thing.

      What is needed is a progressive, fair, IHT system and a reform of trust law, to correct, over time, historical injustice.

      Words like “punitive” perhaps rightly attract Politics Of Envy criticism.

      • steve
        Posted November 22, 2019 at 7:18 pm | Permalink

        MiC

        Well said.

      • Iain Gill
        Posted November 22, 2019 at 7:27 pm | Permalink

        My dad worked 7 day weeks, in a job, plus 7 day weeks when needed to transform a ruined shell of a house into a family home. Why would his modern equivalents bother if it’s all going to be taken off the family.

        That house is not just a financial asset, it is also emotional to the family, as every nail and brush stroke was done by a much loved one.

    • Chris S
      Posted November 22, 2019 at 7:56 am | Permalink

      Andy,
      As usual, you fail to understand the facts and as a consequence, you draw the wrong conclusions.

      I have been self employed since 1992. As John says clearly, self-employed people have no job security and get no holiday pay, sick pay or out of work benefits. Their situation cannot be compared with those who are employed.

      In particular, they cannot be asked to pay the same NI contributions as employees as they would then be paying for benefits they can never claim. That would be a scandal that would make the PPI debacle look totally insignificant.

      Self employed people pay the same income tax rates and have the same personal allowances as employees. The only difference is that they can claim increasingly less generous allowances for using their home as business premises and for travel. The depreciation allowance for a car, for example, has not been increased for many years despite a big increase in purchase prices.

      You may find these facts to be an inconvenient truth. Perhaps you should try being self employed !

      • a-tracy
        Posted November 22, 2019 at 10:08 pm | Permalink

        Employers NI pays for what benefits. The small employer pays the SSP bill and the SSP holiday pay not the state, it pays 20% of SMP and Full SMP holiday pay. The self employed get Maternity allowance for 39 weeks if they pay just class 2 NI? Much lower than the 13.8% contributed by the small employer?

    • Edwardm
      Posted November 22, 2019 at 8:24 am | Permalink

      I’m sure one could make voluntary payments of their wealth to the government. Do you act as you preach ?

      JRM has indeed risen on merit – it is what one does in life after school that counts.

      • hefner
        Posted November 22, 2019 at 5:27 pm | Permalink

        Indeed Jacob Rees-Mogg is the perfect example of the equality of opportunities offered to all children in the UK. Or is it not?

    • margaret howard
      Posted November 22, 2019 at 8:35 am | Permalink

      Andy

      “We have a Tory party stuffed full of people who are where they are because daddy was rich.”

      Not forgetting our (unelected) House of Lords stuffed full of titled ‘Lords’ who inherited their position because some grandgrandgrandgranddaddy helped the Duke of Marlborough win the battle of Blenheim centuries ago.

      • formula57
        Posted November 22, 2019 at 2:56 pm | Permalink

        @ margaret howard – post New Labour’s ill-judged reforms, are not those ” stuffing full” the House of Lords Tony’s Cronies (and cronies of his successors in office)?

      • Edward2
        Posted November 22, 2019 at 3:36 pm | Permalink

        Big group of Lib Dems and Labour Lords too Margaret.

        Only 92 hereditary peers left out of 660 after the 1999 reforms.
        800 peers in total so most are life peers appointed by Prime Ministers.

        So to say the House of Lords is “stuffed full ” of inherited peers is completely wrong.

        • margaret howard
          Posted November 23, 2019 at 8:57 am | Permalink

          Edward2

          “800 peers in total so most are life peers appointed by Prime Ministers.”

          No doubt kicked upstairs for doing them various favours. Collecting £300 a day just for turning up and enjoying some of the best facilities in the city. Subsidised bars, dining rooms, arguable the best wine cellar in town and no doubt financial help to keep them in silk stockings and pumps.

          They make us the world’s laughing stock – Ruritania writ large.

          • Edward2
            Posted November 23, 2019 at 1:40 pm | Permalink

            First you claim the majority of peers are hereditary which is wrong.
            But instead of just climbing down and admitting you have made yet another false fact post, you return with a rant straight out of the letters page of a student union newspaper.

      • hefner
        Posted November 22, 2019 at 5:32 pm | Permalink

        Only 92 hereditary peers left among the total of 793. Wait another 2 to 3 hundred years to see some change … maybe.

      • Al
        Posted November 23, 2019 at 1:00 pm | Permalink

        I am less concerned about the remaining 92 inherited Lords, who have managed to avoid disgrace and govern fairly untainted by politics over the years compared to the current self-serving mass of 700 or more Life peers who were added after 1998, and who have rarely gained their title for more than knowing the right people or having the right party links.

    • Lifelogic
      Posted November 22, 2019 at 8:37 am | Permalink

      Well the self employed do not get the same benefits but some merit is similar taxation levels.

      Wealth taxes and high IHT are hugely misguided and just make the rich leave making everyone poorer. They destroy incentives to work hard or save and invest wisely too.

      If I have earned my money and paid tax on it why on earth should I not be allowed to leave it to my children or grandchildren or anyone else to help them buy a house. I am, after all, allowed to spend it on loose women, expensive holidays, yachts or Aston Martins? What is the point of earning it if it still not mine to do as I choose with it?

      • Fred H
        Posted November 22, 2019 at 7:52 pm | Permalink

        next time you are going to ‘spend it on loose women, expensive holidays, yachts or Aston Martins’ – please ask me to join you!

      • Fedupsoutherner
        Posted November 22, 2019 at 9:22 pm | Permalink

        Yes,LL. Does that include buying a new car if you so wish to do so? According to you that’s a waste of money. Well, it’s my money!! Point made.

    • Posted November 22, 2019 at 8:44 am | Permalink

      Strange that you do not mention the Labour politicians who send their kids to paid for schools, even more hypocritical. Punish the rest of the electorate but ‘they’re alright Jack’

      • Martin in Cardiff
        Posted November 22, 2019 at 4:55 pm | Permalink

        Yet again we have the worn-out, but now-standard misuse of the word hypocrisy.

        To seek to change the law for the better for the whole nation, including for yourself and for your family, yet at the same time doing your best as a family member within the law as it is here and now, is nothing whatsoever to do with hypocrisy. There is no moral inconsistency here at all.

        Labour want all of our young to have access to education of that standard through the State sector, and are working for it. There is nothing hypocritical at all, in anyone using private education until then, unless you say that no one should do this, which they do not.

        However, do not let that stand in the way of a groundless smear as usual.

        • Edward2
          Posted November 22, 2019 at 9:09 pm | Permalink

          There is quite obviously an inconsistency Martin.
          If you campaign against Grammar schools and fee paying schools then it is plainly hypocritical to then send your own children to such schools.
          Set an example if you are a leader.

          • Martin in Cardiff
            Posted November 23, 2019 at 8:22 am | Permalink

            No one is campaigning “against” grammar schools.

            They are campaigning against the lower quality schools which are inflicted upon the 95% of other pupils in the area.

          • Edward2
            Posted November 23, 2019 at 1:36 pm | Permalink

            Wrong again Martin.
            Many left wing Labour politicians say they want to end independent schools.
            Your beloved Labour Party debated such a motion at its conference.

          • libertarian
            Posted November 24, 2019 at 7:33 pm | Permalink

            Martin

            Why are you ALWAYS wrong on facts?

            In Kent where we still have grammar schools the Labour party actively set up a campaigning group and petitions to have them shut down. They never once mentioned any of the excellent comprehensives we also have or that fact that its a parental/pupil choice which type of school the kids go too

        • dixie
          Posted November 23, 2019 at 7:25 am | Permalink

          Usual bullshit from MiC/Andy.

          Hypocrisy – The practice of engaging in the same behaviour or activity for which one criticises another; moral self-contradiction whereby the behavior of one or more people belies their own claimed or implied possession of certain beliefs, standards or virtues.

    • Anonymous
      Posted November 22, 2019 at 9:41 am | Permalink

      Well I’d rather do it another way. Grammar schools and streaming with properly rated O and A levels and a return to free but limited university courses and proper apprenticeships.

      The last time we had this we had the greatest number of working class children promoted into Parliament and into high politics.

      Rarely does a social climb take place in one generational bound. It usually involves responsible parents who are economically and stable in their relationship (not necessarily rich.)

      The only states where your method of property confiscation has taken place have failed. It disincentivises people.

      • Anonymous
        Posted November 22, 2019 at 9:43 am | Permalink

        *stable economically and in their relationship*

        • Anonymous
          Posted November 22, 2019 at 9:47 am | Permalink

          I wager Rees-Mogg would fair better than you on a council estate and wouldn’t be there for long anyway.

          He has charm and ability.

    • Polly
      Posted November 22, 2019 at 11:34 am | Permalink

      That’s right…. heavily taxing the wealthy has been proved time and again the world over to be a massive winner insofar as creating wealth for everyone is concerned. After all, the wealthy always stick around to be raided and never head to somewhere else.

      That’s why Venezuela has proved to be such a huge draw with peeps from all over the world literally lining up for miles to get in…..

      Then there’s communist Russia, communist China and formerly communist Eastern Europe…. all hugely successful countries with wealth for all, quite unlike the capitalist low tax US where peeps just can’t wait to escape, as Donald’s wall to keep everyone in and stop them escaping to Mexico undoubtedly proves.

      Heavily taxing a nation to wealth and success sure is the way to go….

      Have a nice day Sir !

      Polly

    • libertarian
      Posted November 22, 2019 at 2:26 pm | Permalink

      Andy

      Oh if only self employed people could be the same lower taxes and get the enhanced benefits of PAYE

      Why should there be any further taxes on inheritance which has already had vast amounts of tax paid on it.

      You really are a messed up individual aren’t you, so green with envy and riddled with jealousy, perhaps if you hadn’t been such a failure in life… oh hold on you once told us that your kids would be fine because youre a multimillionaire who could take care of them…. hmmm… Walter Mitty springs to mind

      • steve
        Posted November 22, 2019 at 7:26 pm | Permalink

        Libertarian

        “perhaps if you [Andy] hadn’t been such a failure in life”

        That’s a bit strong init ?

        The guy might have a few weird beliefs (which he’s entitled to express just like the rest of us) but I don’t think it’s fair to call him in that way.

        Just my opinion, libertarian.
        Regards

        • libertarian
          Posted November 23, 2019 at 1:00 pm | Permalink

          Steve

          You are welcome to your opinion and I’m welcome to mine

          Andy claimed he sacked all of his staff before Christmas 2016 because of Brexit. Thats the actions of a failure in my book, not sure what you call it .

    • Fred H
      Posted November 22, 2019 at 5:57 pm | Permalink

      Ask Corbyn if he grew up on a council estate, and went to the local sec.modern.

    • acorn
      Posted November 22, 2019 at 5:58 pm | Permalink

      It is difficult to tax wealth, first, you have to find it, then find who the beneficial owner is and which tax haven it is tax resident in. About 35% of all wealth is inherited.

      The way to tax wealth is to tax non-financial assets that can’t move; land and property principally. High-value moveable assets – Rare Ferraris and Picassos, can be legislated to be non-moveable to any other currency/tax area without similar levels of taxation.

      If “leave” voters were as concerned about the free movement of capital as they are about the free movement of persons, then the 1% elite and their tethered politicians would start worrying big time.

      BTW. I am currently brainstorming some scenarios for combining Council Tax (CT) and Business Rates into one extended Council Tax. Basically, to be revenue-neutral, the new Council Tax would be circa 0.8% per year of the market value of both residential and commercial property.

      A business unit would pay a lot less; about a quarter of present rates. A £20 million Chelsea mansion would pay circa £160,000 a year. There would be no Band H upper cap as now. I am advised that the average US property tax is circa 1.1% of market value. 2.44% if you have the privilege of living in the State of New Jersey with a median home value of $320,000.

      • dixie
        Posted November 23, 2019 at 7:56 am | Permalink

        0.8% represents a 50% increase in CT against the average house value in Berkshire – hardly realistic and certainly not representative of the value of services we receive.

        • Edward2
          Posted November 23, 2019 at 5:07 pm | Permalink

          The left are always looking for more ways to tax us in order to enlarge the State so we are then more controlled by them.

          It is all about power and control.
          More taxes more rules more regulations more directives and more laws.

          • dixie
            Posted November 23, 2019 at 6:50 pm | Permalink

            I agree Edward, though it is clearly not just the left, the so-called conservatives are doing it as well.

      • a-tracy
        Posted November 23, 2019 at 10:13 am | Permalink

        Well if rich people got hit like that on local taxes, they might finally insist on improving the way local councils are run and how services are paid for. You can’t just raise taxes without anything to show for it or consequences. What does that person get for his £160,000 pa.

        • Edward2
          Posted November 23, 2019 at 8:22 pm | Permalink

          If it were me having to pay that amount of extra tax per annum them I would leave the UK and live in a more welcoming country.
          As I reckon most of those affected would too.

  15. agricola
    Posted November 22, 2019 at 7:25 am | Permalink

    I did not have to contend with IR35 having ceased my activities so long ago.

    The only reason I became a limited company was to give credibility among customers to my activities. For the self employed life was tough, my analogy of walking a high wire with no safety net was accurate. Government in moving from doing nothing by way of support to moving in to make life more difficult for the self employed are killing the golden goose. Goverment needs to realise how large tax paying businesses germinate, often from the enterprise and vision of one self employed person. Were I doing it again I would move my tax base to somewhere less onerous.

    • Lifelogic
      Posted November 22, 2019 at 7:42 am | Permalink

      Not just the tax but all the admin. of employing even just one person. The VAT, companies house, HMRC, employment contract laws, recruitment red tape, filing deadlines and fines, maternity costs and admin, the work place pension lunacy, health and safety, endless threatening letters making you a criminal (just for filing something a day late perhaps because you were ill or something). Plus government endlessly moving the goal posts. You are advised to set a company up one way and they change the rules the next so that becomes the wrong structure. You change again costing time and money and they move the goal post yet again.

      Government is a vast parasitic and pointless job creation scheme for jobs in the state sector and compliance people and lawyers in the private sector. They are suffocating the productive at every turn and killing productivity, reducing and exporting real jobs. Then the idiotic ministers who cause this like Philip Hammond complain of poor productivity!

    • Old person
      Posted November 22, 2019 at 1:58 pm | Permalink

      You are not alone there. I retired and closed my company down in 2005.

      The main reason was uncertainty on tax status, and the fact that some jobsworth, working at HMRC, could determine your tax status without having the necessary knowledge of what the work entailed, or the legal expertise to fully understand a business to business contract. And, any HMRC ruling was just an opinion and could be changed later.

      Just look at HMRC chasing presenters on the TV channels for six figure sums of tax, twenty years after IR35 started.

      JR. I am sending an email, with a copy of a letter attached that I posted to the Rt Hon Tim Yeo MP (the then Shadow Secretary of State for Trade and Industry), on the 9th February, 2003. It addresses most of the issues of your post.

      The uncertainty over Brexit is probably having the same anti-business effect on fledgling start-ups.

    • Al
      Posted November 22, 2019 at 4:11 pm | Permalink

      Absolutely agree – freelancers are hugely talented and are found in pretty much any recently successful UK growth industry.
      IR35 will deter this behaviour – killing the golden goose.

      • libertarian
        Posted November 23, 2019 at 12:54 pm | Permalink

        A1

        Correct

        The creative and digital industries especially are almost entirely project based ( gigs) . The Film, TV, Music, IT, Digital, and all forms of creative businesses are driven by freelancers . IR35 will continue to kill this off for absolutely no valid reason.

  16. Shirley
    Posted November 22, 2019 at 7:31 am | Permalink

    I know from direct experience that many would prefer to be an employee than a contractor. Many, but not all, are forced into freelancing as a limited company or to pay the exorbitant fees of umbrella companies.

  17. BCL
    Posted November 22, 2019 at 7:50 am | Permalink

    As with all tax, some abuse the system and there are grounds for trying to tackle that. However, the impetus for “going IR35” is usually from the “employer” who wants to save employment costs. The conversation is “we’ll take you on if you do it through your own company”. Most of the benefit accrues to the “employer” and all of the risk lands on the contractor. HMRC set it up so that way deliberately so that the contractor faces the consequences of getting it wrong. HMRC knows that more often than not the “employer” will have the time and resources, not to mention the will, to fight the case where the individual contractor won’t. It really is very unfair but then again there’s no equity in tax so that’s OK.

  18. Posted November 22, 2019 at 8:21 am | Permalink

    I work on IT as a contractor. Most of my roles are to support the deployment of global IT systems that take years to test, integrate and deliver successfully. When it’s delivered, the client and I part ways as the contract is delivered and they don’t need a huge IT delivery workforce one delivery is complete. While I do the odd contract on the side, through my limited company, the nature of my specialist work is generally longterm to a client.
    I’m not sure of the impact of IR35 to this pattern of work, but comments like they PM has promised a review’ fall into the same bucket as ‘I’m working with Heathrow for the last 3 years to get them to change the flight pattern over Berkshire’ and ‘I’m working to stop the extra 9000 properties being built around wokingham’.

    • libertarian
      Posted November 23, 2019 at 12:51 pm | Permalink

      Aaron

      Agreed , I started my business career as an IT contractor, I did a two and a half year project designing, installing and project managing a European infrastructure for a bank . At the time there was no IR35 however if I had done this once IR 35 came into force I would now not have the businesses that grew out of my original freelance role, that pay huge amounts of tax and employ 100’s of people

      ALL political parties Tories, Labour and LibDems hate self employed and small business people . They pretend its about not paying the right level of ENI or paying yourself with dividends etc, but THEY devised the utterly stupid tax rules, so maybe rather than stop us , how about you scrap the 10 million words that currently make up the obtuse UK tax code. They hate us and attack us ( the tories are as bad , under them we’ve had VATMoSS, Reverse VAT, Massive Business Rates hikes, staircase tax, raised tax levels on dividends and NI, and soon the ending of low entrepreneurs relief as well as rafts of other hidden duties and taxes)

      Politicians hate people that aren’t dependent own the state for their wellbeing , it really is a s simple as that

  19. Edwardm
    Posted November 22, 2019 at 8:41 am | Permalink

    What is needed is overall simplification of the tax system.
    As you say, recognition needs to be given to the uncertainty and costs involved with self employment and individual entrepreneurship, which should be encouraged.
    In the case of IR35, it shouldn’t apply to freelance contracts less than a certain period, say about 30 months.

  20. Lifelogic
    Posted November 22, 2019 at 8:45 am | Permalink

    Tory party pledges 3% surcharge for overseas buyers of English homes!

    I was already coming to the conclusion that Javid was unsuitable to be Chancellor so he now confirms it. Firstly almost all overseas buyers will already have a property and so will be paying 3% SDLT on top already. So is this another 3% on top of 15% taking the top rate to 18%.

    TURNOVER taxes are a very bad way to tax people and at this level they are insane. Why would you want deter wealth people from coming to England to spend their money and send them to Paris, NewYork, Zurich or Milan?

    • Lifelogic
      Posted November 22, 2019 at 8:52 am | Permalink

      Doubtless more misguided attacks on Non Dom and other rich people to come too from Javid soon too. He clearly seems to want to be as dire and misguided as were Major, Brown, Darling, Osborne and Hammond perhaps the misguided civil servants have Brain washed him. We are far too highly taxed already far lower rates will give you more income and grow the tax base and not less. Do some thinking you silly man.

    • MG
      Posted November 22, 2019 at 4:43 pm | Permalink

      Whats the betting that ‘overseas buyers’ will also include Ex.Pats that are British Citizens and this will make it harder for them to return.

  21. Roy Grainger
    Posted November 22, 2019 at 8:49 am | Permalink

    My retirement income comes from dividends paid by companies whose shares I hold. This income used to be tax-free but the Conservatives decided to start taxing it, even though it came from share purchases with money that had already been taxed, and then they reduced the tax-free threshold from £5000 to £2000 without notice which meant my tax-planning was ineffective. And the reason they did this was because the BBC forced their millionaire “talent” to set themselves up as one-man personal service companies and they all started paying themselves with dividends from these companies and the BBC avoided NI contributions. And John you voted in favour of these changes. So let’s not have any lectures from you about the “fairness” or otherwise of IR35 – no-one believes you will do a single thing about it.

  22. Iain Gill
    Posted November 22, 2019 at 8:55 am | Permalink

    I see the tax perks from operating through a personal service company as little more than compensation for opting out of being entitled to unemployment benefits for gaps between work, in that tax year. I wouldn’t mind similar perks being offered to PAYE workers if they made a similar agreement.
    A lot of people want little more from the benefits system than a safety net in case of serious illness or injury, their entire industry shedding jobs, and something that will look after their kids if they die. If the government could get those basics right it would help.
    People should be encouraged to build up savings to be able to cover gaps in employment, and that needs action against all the disincentives against savings, primarily the barriers to claiming benefits if you have a little savings.

    • Iain Gill
      Posted November 22, 2019 at 10:26 am | Permalink

      Discount rather than compensation I should have said.

    • Iain Gill
      Posted November 22, 2019 at 7:22 pm | Permalink

      Opting out of sick pay, and various legal protections too

  23. Posted November 22, 2019 at 9:10 am | Permalink

    Well said!

  24. Kevin
    Posted November 22, 2019 at 9:13 am | Permalink

    This election seems bizarrely detached from the circumstances that made it necessary.

    We had an election just two years ago in which “our other priorities” were discussed along with pledges to honour the People’s Vote. A Conservative government was (approximately) returned to take charge of the “other priorities”. As regards the People’s Vote, however, in the past several months we have seen quickfire legislation, prorogation, court action, “unprorogation”, a prime minister threatened with imprisonment, and his expressed preference to “die in a ditch” rather than comply. Yet we do not seem to be talking about any of this. Do we want a Parliament that continues to behave like this? If we do not, how does anyone propose that we stop it from happening again?

  25. MG
    Posted November 22, 2019 at 9:18 am | Permalink

    IR35 as implemented by Gordon Brown and Dawn Primarolo all but destroyed the UK IT Contracting industry and encouraged the outsourcing of IT contracts abroad resulting in a general loss of critical skills for the UK. It did not result in increased revenue take for HMRC. It also suited large corporations as it made it harder for small and middle sized companies to grow and compete with them (a number of large corporations started out as consultancies and grew into other areas, this became almost impossible to do with risk of being destroyed by HMRC for falling foul of the vague IR35 rules which appeared to be made up on the fly).

    Many years ago there used to be an acceptance that Taxes should be applied equally across professions and industries. This was abandoned under IR35 with initially draughtsmen,I.T. staff and engineers being targetted. A blind eye was turned to sportsmen, media personalities salesmen and other professions for some reason, though judging by the recent howls of pain for some BBC radio presenters this policy has now changed, perhaps they should have seen this coming instead of thinking it only applied to others.

    IR35 as it stands is a strong distincentive to entrepenurial activities whilst failing to prevent exploitation of low paid staff by large corporations. It should be replaced with tax rules that prevent the exploitation of workers forced to register as self employed or contractors against their will.

  26. Gareth Warren
    Posted November 22, 2019 at 9:40 am | Permalink

    I have spoken with self employed people and they do find tax stressful.

    At the same time I see the scam with contractors getting treated as self employed. Here I believe someone emplyed for 6 months should not be made cheaper through taxes then a permament employee.

    Geniune self employed people are the plumpers and lift service people, their jobs typically take less than a couple of weeks and they do indeed have to pay their own way in holidays. Our tax system needs simplifying, contractors should be treated like permanent employees as regards to costs which simplifies things.

    • Iain Gill
      Posted November 24, 2019 at 10:30 am | Permalink

      No genuine freelancers are often mobile and work at the other end of the country for short term assignments.

      Indeed many on PAYE are really freelancers as they move through short term often overlapping assignments, forced into PAYE by employers who fail to understand.

      Whether you are frelance or not should be independent of what the employer thinks you are doing. If they are hiring and firing for their peak workloads they are using freelancers.

  27. Stred
    Posted November 22, 2019 at 10:11 am | Permalink

    It really tells us something when the party of financial competence, enterprise and low taxation is embarrassed when a state expansion, greencrap pushing socialist party steals a march and proposes reducing onerous taxation on the enterprising. The only conclusion is that the Tories have long been the party of the civil service and funnelling money from the private sector to the state employed where salaries are very high for the upper ranks and perks and pensions are high and secure.

  28. Ian @Barkham
    Posted November 22, 2019 at 10:19 am | Permalink

    The Tax system in society always deteriorates into a meaningless mess and bureaucratic nightmare when you have a Government that tries to manipulate it for political ends.

    If the purpose of tax is to provide the framework(infrastructure, security, etc.) for a dynamic society were an individuals potential can be reached and flourish. Therefore a growing and productive Country. It has to be based on everyone contributing equally.

    Once Governments try to manipulate it for political gain, it collapse as avoidance becomes part of the preoccupation.

    I do wonder if the BBC in employing freelancers are paying tax(VAT) on these ‘purchases’ like the rest of us have to pay when we buy services from outside professionals?

  29. agricola
    Posted November 22, 2019 at 10:58 am | Permalink

    It is estimated that the top 5% of income tax payers will pay 50.1% of this tax in the year 2019. This does not of course take account of the VAT, IHT, and Stamp Duty they might contribute durin the course of a year.

    Labour intends that this 5% will pay even more to fund Labour’s wild outdated schemes. Does Labour think that these providers of their profligacy will hang around to be milked even further. A greater danger to the future UK it would be hard to find.

  30. Everhopeful
    Posted November 22, 2019 at 11:18 am | Permalink

    Off topic …or very much on topic maybe.
    Local Tories “ We called to see you today”….not a ring or a knock at the door. So nobody saw anyone.
    AND they left a letter for someone in another street.
    What happened to all the efficient local party organisers? They were second to none!!
    And they won elections.
    Loyal foot soldiers ….held in disdain.

    • Fred H
      Posted November 22, 2019 at 5:50 pm | Permalink

      Everh ……I imagine the foot soldiers are no longer.

    • steve
      Posted November 22, 2019 at 6:41 pm | Permalink

      Everhopeful

      Maybe they were too embarrassed to actually knock on the door. I mean, seriously how the hell do any of these political party representatives look anyone in the eye after the way their MP’s have screwed this country over ?

      “AND they left a letter for someone in another street.”

      Probably too scared to go down that street, and hoping you will have more spine than they do and deliver it for them. Send it back with a note saying; ‘show some guts and deliver it yourselves’

      Personally I’d have simply chucked in the fire.

  31. Ian Wragg
    Posted November 22, 2019 at 11:31 am | Permalink

    I’ve just listened to Farage and his Brexit Party manifesto. I must say after the sheer nonesense of Liebor , Lib dems, Greens etc, what a breath of fresh air which is truly welcome.
    His ideas for the HoL, HS2, Foreign Aid and immigration which should be Tory ideas will attract many Labour votes.

    • Dominic
      Posted November 22, 2019 at 6:25 pm | Permalink

      The Tories are more concerned in keeping the BP out of the Commons even if that means legitimising a rabble of rancid, racist Marxist goons

      The Tories could destroy Labour tomorrow on issues that reveal Labour’s brutality, ruthlessness, deceit and malfeasance but they won’t enter into territory that’s been demonised by our liberal left media. So it’s truth under the carpet, ignore their crimes and focus on crappy issues like spending other peoples money and groaning on about the bottomless, unionised pit that is the public sector

      It’s always been party before nation with the Tory party except the great Lady who wasn’t a Tory anyway

      • Mark B
        Posted November 23, 2019 at 7:07 am | Permalink

        +1

    • steve
      Posted November 22, 2019 at 7:02 pm | Permalink

      Ian Wragg

      I don’t think very much of Farage, he has a tendency to try and convince people he’ll fight for them and country…..and then runs away in yellow trousers.

      However I did listen to Anne Widdecombe on LBC the other night. Lots of remainers phoned in to have a go, she despatched every single last one of ’em.

      Ms Widdecombe is as formidable as a Ninja and she doesn’t take prisoners. She is also openly unafraid of PC and tells it like it is.

      In my opinion she, or someone very much like her should be running the brexit party.

      I have the greatest respect of this highly esteemed woman. Our country needs more of her kind.

    • steve
      Posted November 22, 2019 at 7:12 pm | Permalink

      Ian

      “…..which should be Tory ideas will attract many Labour votes.”

      Except that many hard core Labour voters will now still vote Labour, since he [Farage] legged it from the fight in those areas.

      These people will not vote conservative simply because Farage withdrew candidates. Which could potentially see Corbyn in No 10.

      Very clever move, Nigel. Very clever indeed.

    • Posted November 22, 2019 at 9:13 pm | Permalink

      Agreed, Mr Wragg – but it’s not a ”manifesto”. As the Brexit Party says: ”…a manifesto is little more than a set of vague promises that its authors have no intention of keeping….”
      Let’s have more ”contracts” if this is how they are presented.
      I really DO wish that BJ had been the man to put forward these kind of proposals. And I do wish that he’d been man enough to speak to us on 1 November about the difficulties. He ignored us and treated us with contempt. If he gets the same in return, then that’s not surprising.

    • Fedupsoutherner
      Posted November 22, 2019 at 9:16 pm | Permalink

      Ian, Yes, I like it too. It’s about time the useless Tories started thinking along the same lines. Boris has just been waffling on the TV. It’s enough to put off voters. Why doesn’t the Tory party highlight the really bad things about the EU and Corbyn? Could it be because they don’t really want to leave the EU? Bunch of cowards.

  32. Javelin
    Posted November 22, 2019 at 12:10 pm | Permalink

    The unintended consequences of this is that IT contractors move from company to company every year or two and bring the best practices into the business.

    I have seen new contractor rejuvenate a business simply by bringing in fresh ideas.

    Training staff is a nonsense because those that can’t do teach – so you’re taught by people with 3rd rate skills.

    IT will stagnate in the UK without the merry go round of senior IT staff bringing in best practice. The loss will be slow and subtle and then it will be too late.

    • Iain Gill
      Posted November 23, 2019 at 8:26 am | Permalink

      the country needs people with rare skills to be prepared to move geographically, and work in different parts of the country on temporary assignments.

      it is ridiculous to expect people working on temporary assignments to be paying for hotels and travel etc out of taxed income, this puts them at a significant disadvantage to the consultancies and outsourcers who can pay their workers money for hotels and travel tax free.

      temporary for me is anything up to at least a couple of years, as you cannot really move the kids out of school to a completely different part of the country for any less than that or they become nomadic and will not get a decent education

      and often at the start of such projects the end date is a guess, so again moving your kids around when the project could end in a few weeks or months is a silly idea, so it has to be staffed by someone living in a hotel or B & B

  33. Posted November 22, 2019 at 12:20 pm | Permalink

    As a single person Ltd company, I was caught by IR35 as a freelancer. I was originally a Sole Trader but was forced by the agencies to work as a Ltd Co or they wouldn’t deal with me.

    I don’t support Friday to Monday arrangements where an employee leaves on Friday and then returns as a freelancer on Monday morning. I think this is wrong and abuses the system. By the same token, IR35 is invidious – a measure introduced by Gordon Brown to screw self employed people.

    Freelancers are a valuable asset to the country and economy. If you are an expert in your field, then you’re probably going to go freelance, ironically hired in by big consultancy firms because all their staff with expertise have gone freelance!

    IR35 can be got around anyway of you know what you are doing with the contract wording. The problem with it is that it limits choice for the freelancer and many companies will not accept variations on the contract wording.

    This is particularly true of Government work and effectively means that IR35 limits the expertise available on Government contracts. This makes it, to a degree, self defeatingfor the Government.

    As an aside, you probably don’t remember that we met whilst PSA was being privatised many years back and you were the minister in charge? Happy days!

  34. Rule Britannia
    Posted November 22, 2019 at 12:21 pm | Permalink

    The employment rules do not say that a single source or length of engagement are important factors in ’employment status’. Case law has eventually got that part right, so it is not correct to take a position that people are not self employed if they “earn their income from a single source”.

    That is in fact the nature of all work. HMRC claim that a plumber is self employed because he has many clients at the same time. That is factually incorrect, a plumber has one client after another (he cannot be in two places at once, after all) the only difference is in the length of time it takes him to complete each engagement.

    A plumber can fix a dripping tap in an hour and be on to the next piece of work, whereas in professional spheres the work undertaken often takes many months and involves establishing working relationships with other people whose work is related.

    These people cannot pay the same NI as everyone else, since agencies will not deal with self-employed people any more (there are other pieces of legislation which may dump employment taxes on the agency if a person working through them as a self-employed status is deemed to be otherwise). They will only deal with Ltd Co structures which lets the agency and end client off the hook, ensuring that any retrospective action is the worker’s to deal with.

    Once in a Ltd Co structure, the worker has only two choices – (1) pay all as salary or (2) pay dividends and some salary.

    Option (1) means they have to pay all BOTH employees and employers NI,

    Option (2) means that they can pay little in NI directly, but the dividend taxes substitute a tax for employees NI, at higher rates this is highly punitive.

    Note that all income tax in all bands is paid. There is a daft theory in the ill-informed media that dividends avoid paying tax. They don’t.
    What happens is that at HMRC receive a personal tax return for each individual and they extrapolate an effective gross salary across all sources and issue a demand for the difference.

    Furthermore, any dividend taxes must then be paid again in advance for the next year.

    In the meantime, many of these people are staying away t work miles from home and paying the costs of doing so from their remuneration, with HMRC imposing an artificial 2 year limit on their ability to do that. Why??? A cost of staying away is just that, it reduces the income available to live on, so it is hardly a “perk” in any sense and is most certainly a cost of doing business.

    And why can’t all workers claim expenses? It is the cost of doing business for us all. Would we rather people sat in their home towns waiting for work to come to them?

    Very, very few people understand these issues – including the Treasury and HMRC! The best solution, is to get rid of Employer’s NI (and probably roll up Employees NI into income tax). Then we don’t need these silly artificial “employment statuses”, we are all just workers on the same basis.

    I am certain that the current dog’s dinner of a tax system was not designed for a worker to be hit with both forms of NI in addition to all the income taxes in all its bands. IR35 is a truly horrible piece of legislation in that regard.

    • Rule Britannia
      Posted November 23, 2019 at 12:23 am | Permalink

      Sad that the only comment that has any real understanding of IR35 is not published, presumably considered too long.

      If you expect to write a piece on a very complex subject and receive short responses, then what is the point in responding at all? The views of most people on this are very ill-formed, but that’s hardly surprising given the ridiculous complexity of the tax code in general and the issues around IR35 in particular.

  35. BillM
    Posted November 22, 2019 at 1:13 pm | Permalink

    I guess the “Few well paid” might include those high earners in the BBC who form their own company to draw their BBC salary and take a basic wage as an employee of the company their own, then hand themselves a huge dividend at year end. For example, they can draw £50K as a salary taxed at 20% then pay themselves a dividend of say, £100K which is taxed at just 15%. That clearly is an abuse of the system and makes it bad for the qualified plumbers and electricians, etc who do not earn at that level.
    Clearly SJ is right, The circa 2 Million self-employed tradesmen in the country should have preferential tax treatment to match that of these higher earners.

    • a-tracy
      Posted November 23, 2019 at 9:43 am | Permalink

      Bill you’re wrong about the dividend tax rate. In the case you state you’d be at least in the higher rate band which would mean you would pay tax at 32.5%, you may even fall into the higher band at 38.1% which is a claw back of your personal allowance. On top of that dividends are paid out of taxed profits.

      • BillM
        Posted November 24, 2019 at 7:36 pm | Permalink

        Well an income of between £12501 and £50K attracts a tax of 20%. From £50,001 to £150K the rate is 40%
        Check out https://www.gov.uk/tax-on-dividends
        and https://www.gov.uk/income-tax-rates
        Do you still maintain that I am wrong?

        • BillM
          Posted November 24, 2019 at 7:50 pm | Permalink

          It seems I have exaggerated the dividend tax on the basic rate of income tax.
          It is no longer 15% it is just 7.5%. That is awful.

          • a-tracy
            Posted November 26, 2019 at 12:25 pm | Permalink

            You get a dividend personal allowance of £2000 then pay 7.5% after already paying 19% CT.

            Compared to a personal allowance of £12500 then 20% tax and 12% employees National Insurance.

  36. HMRCVictim
    Posted November 22, 2019 at 1:20 pm | Permalink

    “The PM has promised to review it [IR35].”

    Please can you elaborate John?

    I know that Boris Johnson promised a review of the Loan Charge Scandal – which is wholly separate and was due to report back by now, but has been delayed by the General Election (perhaps too late for any changes to be implemented in time to help the tens of thousands impacted, but that’s a discussion for another day).

    However, I am not aware of any such promised review for the IR35/Off-payroll Tax legislation that has been widely expected to be rolled out in the next budget to the Private sector. It’s caused chaos in the public sector with rafts of contractors leaving projects, hospitals struggling to staff rota gaps and trusts resorting to using arrangements that HMRC have said are tax dodges in themselves. However HMRC have declared the public sector roll out “a complete success” and that they intent to now do the same in the private sector. Already, many major financial firms have set deadlines for all contractors working via their own limited company to leave. The only way they can remain is by joining “umbrella companies” and taking a chance that they are not engaged is anything that might incur the wrath of HMRC in years to come (such as those people who are now facing the Loan Charge) or take an approx. 30% overnight effective pay cut and be deemed an “employee for tax purposes” but with no employment rights.

    I truly hope that the Conservatives are committing to such a review, which is sorely needed, and will announce that the private sector roll-out is on hold until it has been completed.

  37. Denis Cooper
    Posted November 22, 2019 at 1:35 pm | Permalink

    Off topic, it is reported that Leo Varadkar would be happy with the kind of new deal that Labour would negotiate with the EU:

    https://www.independent.co.uk/news/uk/politics/labour-manifesto-corbyn-brexit-second-referendum-ireland-varadkar-a9212586.html

    “EU ‘open to’ Corbyn’s Brexit policy, says Ireland’s Leo Varadkar”

    Which is not surprising, because as he says:

    “… a customs union with the EU, or closer alignment with the single market, that’s something we’ve always been open to … ”

    In fact it is almost exactly two years since the Irish EU Commissioner Phil Hogan publicly demanded that at least Northern Ireland, and preferably the whole of the UK, should stay under the rules of both the EU Customs Union and the EU Single Market:

    http://johnredwoodsdiary.com/2019/08/23/the-irish-border-issue/#comment-1048110

    “Mr Hogan, the EU’s agriculture commissioner, said Ireland would “play tough to the end” over the border issue, and said it was a “very simple fact” that “if the UK or Northern Ireland remained in the EU customs union, or better still the single market, there would be no border issue”.”

    http://johnredwoodsdiary.com/2017/11/26/the-irish-border-with-northern-ireland/#comment-903216

    “On the TV this morning it was stated that the UK government is “desperate” to move on to trade talks, but this would be vetoed by the Irish government unless the UK government committed to keeping the UK in both the Single Market and the Customs Union.”

    In other words, Labour are proposing a comprehensive surrender to the unreasonable demands of the Irish government and the EU, rather than the two (slightly) different partial surrenders negotiated by Theresa May and Boris Johnson.

    Of which the latter is actually the worse, as it risks the break up of the UK.

  38. Bob
    Posted November 22, 2019 at 1:42 pm | Permalink

    A small simplification would be to align the payroll year to the calendar year, i.e. 1st January to 31st December instead of 6th April to 5th April.

    Also, abolish tax codes and replace with a simple figure, i.e. 12500 instead of 1250, and have a tax code which is a factor of 12.

    These minor tweaks would remove some unnecessary minor complication without costing a penny.

    • steve
      Posted November 22, 2019 at 6:27 pm | Permalink

      Bob

      “Also, abolish tax codes and replace with a simple figure,”

      Better idea – abolish tax for those who are dissatisfied with the services they receive. After all you wouldn’t pay hard earned money for something in a shop that was crap. So if the country is being poorly run, you shouldn’t have to pay for it.

      Also it should be so that you don’t have to have your money taken off you without permission. Under any other circumstances that would be theft.

      And since the BBC and ungrateful SNP seem to think Scotland has it’s own government, which would make it a foreign country…….why, therefore, do we have our tax offices there ?

      HMRC and other services associated with England should be repatriated in my opinion. Let the Scottish voters rightly blame Nichola Sturgeon for the loss of jobs.

      ‘We want independence but we want to keep the pound and all other perks as well’

  39. Posted November 22, 2019 at 1:45 pm | Permalink

    Let’s have legislation ensuring that no self-employed person pays tax until they receive the minimum wage. Some of the shop-keepers in my properties hit a calamity with the VAT threshold and are effectively working for nothing.

    • steve
      Posted November 22, 2019 at 6:02 pm | Permalink

      Lynn

      “Let’s have legislation ensuring that no self-employed person pays tax until they receive the minimum wage”

      I confess to not being a tax expert, but, that surely is the case isn’t it ?

      For example if you earn less than the tax threshold you don’t pay tax. I would suppose the minimum wage approximately correlates to the tax threshold.

      Again, I’m not an expert. But what I do suggest is that we’re all paying too much tax for what we receive back in terms of publicly funded services, rich and low earners alike.

      • Bob
        Posted November 24, 2019 at 1:34 pm | Permalink

        @Steve Fact Check
        The min wage based on a 40 hour week is 17k p.a. which is £4500 over the tax free threshold.

  40. Tony English
    Posted November 22, 2019 at 3:32 pm | Permalink

    A possible consequence of IR35 is actually a reduction in permanent work. Why would you ever hire an employee when you can rid yourself of the costs associated with employment and all the employee protections. Simply insist on hiring people inside IR35 via an umbrella company and save yourself the employers NI also. One simple cost per week/month per ’employee’ and that’s it.

    Then when you are finished with them, terminate the contract (often contractors have zero notice periods) and move on

  41. Arnie from Newington
    Posted November 22, 2019 at 3:45 pm | Permalink

    The difference between the tax paid by employed people and self employed people is too big at present and needs narrowing.

    • Steve from Wokingham
      Posted November 23, 2019 at 3:02 pm | Permalink

      So being taxed 32.5% on dividends taken from a ltd company after already having paid 19% corporation tax on the source of that money is not enough? oh and the 20% VAT that the invoices generate for HMRC..

      • Arnie from Newington
        Posted November 27, 2019 at 8:28 pm | Permalink

        Corporation Tax and VAT are not personal taxes.

    • libertarian
      Posted November 24, 2019 at 7:24 pm | Permalink

      Arnie

      Seriously you want employed people to pay as much tax as the self employed, are you sure . Or as I suspect you dont have the remotest clue about taxes

      • Arnie from Newington
        Posted November 27, 2019 at 8:29 pm | Permalink

        I can assure you I am a tax expert.

  42. P.H.Crawford
    Posted November 22, 2019 at 3:52 pm | Permalink

    IR35 is due to the Treasury’s predatory attitude to tax collection and the conflation of tax avoidance, which is perfectly legal, with tax evasion, which is not. I have a close friend who has worked as an independent contractor for many years, mainly because he prefers this method of working. He tells me that much of the work is either going abroad or to the large firms of contractors. Even more sinister, where independents are now being offered fixed-term contracts by the firms they are currently working for, this is being used to justify HMRC pursuing them for back taxes, arguing that being given a contract proves that they were in effect employees all the time. The Government should initiate an immediate review.

  43. John P McDonald
    Posted November 22, 2019 at 5:20 pm | Permalink

    The basis for defining if you are employed by a company should only be if they have an employee contact with you ,they pay national insurance for you, pay you for holidays and sickness and deduct tax and National insurance from a weekly or monthly wage which they pay you directly.
    Just because you have a contract with the company to provide services on a daily basis as requested by the company does not make you an employee of that Company in my view.
    The Labour Government introduced IR35 and with it a legal definition of an employee which is based on how the Company directs an individual to carry out work on their behalf and has nothing to do responsibility for them in terms of wages, Tax collection etc.
    It was common practice in the Oil, Gas and IT industries to employ one person
    Ltd companies.
    The labour Government did not like the fact that any profit made could just be paid as a dividend and split between a husband and wife who would be 50% shareholders /Directors.
    The profit was taxed and likewise any Dividends paid.
    The real issue was National Insurance which could be avoided and also it was not necessary to draw a salary which could be taxed at a higher rate then would be the case if monies received solely from dividends.
    The problem could have been fixed by changes to Company law in regard to Directors remuneration in regard to Dividends and minimum NI payments. They must be PAYE employees of the their company as well as Directors and receive a minimum PAYE salary.
    So are MP’s PAYE for all their income from Parliamentary Duties ? How many MP’s wife’s are their secretaries ?
    So being a one person limited Company is not encouraged by IR35. You must only have very short term contacts with many companies and not land a nice 6 month or 12 month contract with say BP.

  44. Fred H
    Posted November 22, 2019 at 5:49 pm | Permalink

    OFF TOPIC….
    Today via Royal Mail I have received a letter, addressed to me, from Dr P.Lee – standing for LibnoDemocrats in Wokingham. Also a full colour single page from Jo Swansong. I have never voted Liberal or Libxxxx..etc in all my life.
    The colour pamphlet is now the 5th different one – yet no other party has delivered anything to my door.
    How is this excessive campaigning and cutting down of trees being sanctioned and paid for I ask?

    • Fedupsoutherner
      Posted November 22, 2019 at 9:12 pm | Permalink

      I’ve had a leaflet from my conservative MP. Not bad but the only choice seeing as the Brexit party isn’t standing here.

    • Ian @Barkham
      Posted November 22, 2019 at 11:57 pm | Permalink

      The liberal undemocratics were out of the box early in Wokingham, before even the election was announced. So election spend gets blurred. The social media spend for Lee is said to have big and misplaced- Woking however, and its constituents are confused as why they were targeted.

      As you will be aware DrP Lee promised in writing to the electorate in his previous constituency that he would deliver Brexit deal or no deal. So he is to be trusted and believed.

      The theory for Wokingham is that as the undemocratics have 17 councillors against the Conservatives with 19 so Wokingham will be a pushover.

      Jo Swinson will be the UK’s next PM, as the mantra is – “democracy is what I say it is, not what you the people vote for”

    • Not again!
      Posted November 23, 2019 at 12:04 am | Permalink

      Trees are a nuisance. They burn down periodically eating oxygen, causing rainfall elsewhere wherever the smoke ends up. Kill massive amounts of wildlife. Breed rats where Local Authorities are forbidden to poison them. Brilliant idea. Houses surrounded by Ratdom and a fire hazard.

    • Ian @Barkham
      Posted November 23, 2019 at 10:24 am | Permalink

      To day Saturday,

      Weekly round up. This week the Un-Democratic Liberals have now delivered 2 direct letters to family members, and 3 circular leaflets. This is on top of the half a dozen or so already received in the previous weeks.

      It would appear the limit on campaign money offers good value nowadays

  45. Ian @Barkham
    Posted November 22, 2019 at 6:28 pm | Permalink

    A smidgen of subject. Party Political Broadcasts as in debates, as we know are a bit contrived and pointless. But, it does seem strange that individuals that are not standing in the election and so will not get elected to the UK Parliament, are given equal standing to those that are.

    Does that mean the Broadcasters have just placed someone at the podium out of devilment and as their are similarities with their own left wing ideology and amusement?

    The defense might be related to party leadership. But, MP’s cant have it both ways – when they switch parties the excuse is the people voted the person not the party. So they don’t need to stand down or call an election.

    The Westminster bubble doesn’t get why they are seen as a despicable bunch of hypocrites.

    Back on subject – why then are they saying they are special when it comes to tax and expenses as well.

  46. Richard Hobbs
    Posted November 22, 2019 at 7:13 pm | Permalink

    You say “Why don’t they pay National Insurance under the employer/employee scheme that applies to the rest of us…”. Yes, and if when they retire they have to go and live abroad, to look after sick parents say, they can suffer under the ‘frozen pension arrangements” just like my wife and self. We have been receiving the same miserly amount for 15 years now despite having paid NI contributions for 40 years whilst working in UK. If, J. Corbin gets in (hope not) then we can try and hold him to his promise to uprate, something the Tories don’t seem interested in. After all, we are only hard up old people and don’t count for anything nowadays!

  47. Lindsay McDougall
    Posted November 22, 2019 at 7:40 pm | Permalink

    Now that Labour’s manifesto and funding have been published you have the opportunity to trash them thoroughly. Doing that successfully is the key to the Conservatives winning a landslide victory.

  48. John Fitzgerald
    Posted November 22, 2019 at 8:18 pm | Permalink

    Why don’t they pay National Insurance under the employer/employee scheme that applies to the rest of us with a single employer But of course those that are trapped by IR35 invariably do pay the employer/employee NI and that is what is so unfair about this legislation brought in by Blair / Brown which should have been repealed long ago! I am now retired and thank the lord I am as I searched Jobserve yesterday against my specialisation and it returned 1 position! Unbelievable!

  49. ukretired123
    Posted November 22, 2019 at 8:26 pm | Permalink

    I regard IR35 as very important subject indeed!
    Self-employment is key to any country’s future.
    More so in the digital age which empowers the individual, not just the big companies.
    Productivity is unleashed, creativity is unleashed.

    Becoming self-employed is an immense step for any individual like a parachute drop with lots of unknowns, unless you have good backers and a facilitator government.
    The last time such a government existed was Mrs Thatcher in the late 1980s when I was fortunate to experience it.
    Since that time I noticed less interest by governments in helping folks become self-employed and resentment by Gordon Brown’s introducing IR35 as larger organisations were abusing it to avoid direct employment taxes.
    As a result the original idea to promote self sufficient employment was turned into a stick deterrent.
    I used to go abroad to work paid in foreign currency to prove I was definitely genuine and subject to business risk! Crazy…
    IR35 assumes you are non “bona-fide” and need closer scrutiny by HMRC. Uncomfortable!

  50. Rhoddas
    Posted November 22, 2019 at 8:55 pm | Permalink

    Brown as Chancellor first introduced IR35 and extended it, with the Tories climbing on the bandwagon afterwards unbelievably , Osborne then Hammond. Shame on them all! Having been a contractor for 20+ years I have an intimate insight into the difference between being a contractor vs employed :

    * No holiday pay, no sick pay
    * No employer pension contribution, no death in service benefit
    * N0 company sharesave scheme or car benefit / social / gym benefits
    * No permanent contract – maybe a 3 or 6 month, with no redundancy/severance payment.
    * Often limited access to company intranet and information necessary to provide services they require; often required to provide own computer/comms.

    Therefore there is clearly no close comparison of terms with being an employee and therefore no justification for paying tax/NI equivalence to an employee status. Contractors have to cover sickness risks and holiday loss of fees, provide their own pension / SIPP.

    Treating them and their fees as employees is a nonsense, repealing IR35 would be fairer to genuine contractors, with as others have commented a few very targeted measures to avoid disguised employees. If there was employer NI rates based on headcount (employee and contractor) then this could resolve the taxation collection the Government feels it needs to collect.

    • Mark B
      Posted November 23, 2019 at 6:33 am | Permalink

      Hear, hear.

      . . . a few very targeted measures to avoid disguised employees.

      As I alluded to above. We just need to deal with a few rotten apples.

  51. Fedupsoutherner
    Posted November 22, 2019 at 9:11 pm | Permalink

    Anyone else love the Brexit party’s People’s Contract? I especially love getting rid of the House of Lords and Cutting Foreign Aid. Well done Nigel. Common sense from someone at last.

    • agricola
      Posted November 22, 2019 at 9:45 pm | Permalink

      Agreed, Nigel was the first coherent voice I have heard on the subject of Brexit and many other subjects. His contract with the people makes sense. Obviously the BBC left him out of their stitch up Panorama programme. Far too toxic for guardianista BBC.

    • Posted November 22, 2019 at 9:52 pm | Permalink

      Yes, FuS. I do – I love it too. And I really do sincerely wish that BJ had been the man to produce something like this. He wasn’t even man enough to speak to us on 1 November, about his ‘unavoidable’ failure.
      Since it seems we are stuck with the Tories or nothing (in some places, like mine), then it’s a pity he needs to be shown the way by what he sees, no doubt, as the ”opposition” rather than allies in Brexit.
      But then – as he isn’t a Brexit believer – no doubt he won’t see it that way. How sad.

    • Lifelogic
      Posted November 23, 2019 at 5:01 am | Permalink

      Well it is very good indeed not much I would take issue with apart from retaining the current rather dire, free at the point of rationing and delay NHS and the building of more new subsidised council houses. Both are unfair competition to other more efficient providers. We need fair competition freedom and choice in housing, relaxation of planning and fair competition in healthcare with far more people encourage to go privately. If people really cannot pay the rent or their medical bills you give them assistance to pay. We should not provide it free or subsidised for people who can afford to pay though taxation. A very good performance by Nigel on TV thursday PM. Amazingly hostile and ill informed questioners where did the BBC get them from?

      Nothing about going for cheap, reliable, on demand energy and not subsidising the renewable lunacy/religion. The people to have rights to referendums like the Swiss is a very good plan. The people are far more wise, closer to the coal face and impartial than our fairly dire, group think MPs. Anyone who want to be an MP should be regarded with some suspicion for having that desire. Parliament is with lawyers, PPC graduates, geographers and other people who have never held a proper job down.

      It is right on the dire Supreme Court and the Lords. Both stuffed with dire group think pro EU, big state, anti-democratic socialists.

      • Lifelogic
        Posted November 23, 2019 at 5:03 am | Permalink

        Parliament is stuffed with Lawyers, PPE …. I meant.

    • Mark B
      Posted November 23, 2019 at 6:30 am | Permalink

      And as for the Telly Tax ?

      🙂

  52. agricola
    Posted November 22, 2019 at 9:17 pm | Permalink

    My god how infuriating is F Bruce on Panorama. Jumping in and out like a demented frog. Her interuptions were ten times that when Boris was on compared with the other candidates. She was appalling. It was a BBC stitch up both in audience selection and the planted questions. The colusion between Bruce and the selected questions and questioners. The BBC are overdue for swamp clearance at the first opportunity.

  53. Iain Gill
    Posted November 27, 2019 at 5:39 pm | Permalink

    Labour has both stunned and elated IPSE’s self-employed hustings with a surprise pledge to entirely abandon IR35 reform in the private sector.

    https://www.contractoruk.com/news/0014347labour_surprise_pledge_scrap_ir35_reform_april_2020.html

    So that only leaves the Conservatives going ahead with this nonsense, both Libs and Labour have promised to abolish.

    Really the Conservatives need to get their act together.

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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