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transmogrification
means to change into a different shape or form, especially one that is fantastic or bizarre....
...and it might be worth noting that this is NOT Gordon Brwon's idea - it comes, strangely enough, from the back benches.
complications
more money squeezed out through complications
and of course, the more complications in the system, the more "loopholes" there will inevitably be, which will mean that the Treasury will need to add further complications to fix the loopholes, thus generating more loopholes ....
The root cause of the problem
Has nothing to do with legal entities nor the tax system. This Government is essentially bankrupt and Gordon Brown, forgive me if I ignore Darling, is looking down the side of the setee for loose change.
Brown is close to becoming a despot. He robbed me of a handsome pension fund in his first budget and he has robbed the general populace ever since. Unbelievably for a Labour Government, he is now robbing the poorer paid to placate the middle income earners who it's said put Labour in power in 1997.
The money raised has been partly wasted on pet IT projects which the populace doesn't need and hasn't asked for (ID cards and NHS system to name two). Our money is being wasted to support the vanity of Labour Ministers who have to be seen to be doing something. However, by taking their eye off the ball, the economy, they fail to realise that it's the pound in our pockets which generally decides national elections.
The current financial crisis is un-precedented in modern times. The Government has propped up the banking system to the tune of many billions, but couldn't find a few pence, in relation to those sums, to save MG Rover.
So let's make it clear again, we don't need a new legal entity and we don't need changes in the tax system. What we need is for the Government to lay off identifiable sectors of the community, especially IT consultants and more importantly spend our money considerably more wisely than they are at the moment! Perhaps then all this debate will die down and we can ALL return to running our business ventures without undue scrutiny from HMRC!
We don't need
a new legal entity. The search for the Philosopher's Stone can be abandoned.
What we do need, however is a tax system that works across the board for small businesses. In other words, that other myth, "the level playing field."
Phylosophical phylosophers
Simon,
However much you try to dress the situation up, the intent of HMRC is clear. They only want to target IT consultants, who by and large are the major group which uses incorporation as a business vehicle. Once again, let it be said that this manner of trading is forced on the IT consultancy arena by the agencies who act for clients.
HMRC sees the high earning consultancies and the level of control that is exerted over their financial affairs and wishes to stop it. Ah, but there's the rub. HMRC cannot directly target this group as such tax policy is illegal under EU law. So inevitably there is collateral damage.
Those involved in the collateral damage were largely unaffected by IR35 and the MSC regulations, which were an attempt by HMRC to directly target the IT industry. Now that a greater number are squealing, HMRC's attacks have become high profile.
Forgive me if I'm cynical, but your average "sole trader" was disinterested in the effects of IR35 and the MSC regulations, now it's your turn to take the medicine. These regulations are not about fairness. They are about good old fashioned Labour spitefulness.
I did read an article at the time IR35 was introduced which intimated that Cherie Blair was overhead to say that she deplored the level of remuneration some IT consultants could command. If this were so, then she clearly was unhappy about "ordinary" people joining the "well paid" club that she belongs to!
The solution is simple
I find it stunning that there needs to be a consultation at all. The solution is that all business entities must be subject to the same taxation rates regardless of their form.
There is a big bang solution, but one that would require political resolve to implement against the inevitable lobbying torrent.
Failing that the one sure fire way to reduce administrative burdens is to increase the level of system standardisation and automation.
Time travel ?
I am posting this comment, I believe, on Friday 18th April.
A comment made to an article dated 3 days in the future (21st April) !
Presumably the article was intended to be posted Monday 21 April, but somehow got posted 18 April or before ?