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IR35 and a lot of heated comments
You will have no doubt seen all the vitriol spilling onto the various forums that carry references to IR 35 Guideline announcements.
My view on this whole issue is influenced more by what is happening to the Contractor/Freelancer sector of the economy than the understandable attitude of HMRC.
In a recent report by Randstad it said: "the UK already has the greatest penetration of temporary and contract workers in the EU... and our expectation is that over time, the economy will see a gradual development of interest in the benefits of temping and contracting by both job seekers and organisations." (see SJD Accountancy site).
My own personal experience working in the building/maintenance sector suggests that increasing numbers of existing employers are allowing/shifting employees into independent status. At this rate of change it won't be that long before we have considerable numbers of seperate entities operating as Personal Service Companies registered with Companies House.
I cannot see how the Govt can maintain its current Taxation Policy with regard to what it terms disguised employment when the economic dynamics of the country determine that this is the new reality.
It may be that a new type of corporate entity has to be introduced to cater for this development but umbrella Companies are surely not the only answer to this conundrum. Its ironic that the Govt are praying for an upsurge in entrepreneurial concerns at the same time as stymying the prospect.
@KateCottrell: Please support "Contractor's Age test: Is C>SPA?"
Hi Kate Cottrell! May I politely request - when you attend the next HMRC IR35 Forum meeting - that you please ask the HMRC team members to introduce an additional / new IR35 Business Entity Test question, to those already published, of the form:
* "Contractor's Age test - Is the contractor aged greater than State Pension Age? (999 points if yes)".
Of course, if HMRC's proposed system can only deal with two digits, then score 99 points (if yes); as, for your easy reference, I previously set out in this AWEB link:-
https://www.accountingweb.co.uk/anyanswers/question/ir35-2#comment-558692
Here are some rationales to support a "Contractor's Age test", for consideration:
(1) IF HMRC really does support the Chancellor's Budget 2012 for growth, THEN surely it's better that people over State Pension Age (SPA) are in work, creating economic activity for the UK's economy, rather than on the street or buses, or causing extra public expenditure through pre-mature dementia/altsheimers/etc and associated NHS or care home costs.
(2) Haven't the necessary contributions needed by the state already been paid by and for such OAP workers, through the NIC records?
(3) Don't the advances in computerisation since the post WW2 introduction of the NIC scheme mean that employers can now efficiently distinguish between workers aged below and above SPA?
(4) With the intellectual/skills capital of workers > SPA, isn't it sensible to unleash same, especially as an ageing population demands sufficient workers, and immigration is now discouraged by HMG due to the costs of congestion, etc?
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