'Employer is in UK or in existence'. What do we mean by 'employer'? Is this an umbrella company that set up the scheme for a self-employed contractor? Or are we talking about an employer in the traditional sense?
So many problems with this proposal it's hard to know where to start.
Client-led status disagreement process - so client says 'we think IR35 applies'; contractor says 'I don't think it does'; client says 'we've decided it does - disagreement process concluded'.
No employment rights or benefits - Employment tribunals are sympathetic to individuals claiming worker status. Making a claim for holiday pay costs nothing. Individuals will be motivated to make a claim because they disagree with the IR35 status determination and the client-led disagreement process ... well, see above.
Small company exemption - we (IPSE) actually support this (in fact we support an all company exemption), but it's going to be difficult for contractors and agencies to know whether the client is a small company.
Shifting the tax liability - it troubles me that one of the entities in the chain could suddenly become liable because another entity has phoenixed.
Information sharing through the chain / shortcuts etc - this all seems like a massive ball-ache. Maybe it's just me but why is a Tory government imposing this on business to protect a few quid of revenue. We need to move away from IR35 which everyone hates and no one understands - there must be a better way.
Also, I agree with other comments on here that this will create more non-compliance in other areas e.g. loan charge, MSCs, lots of 'small companies' springing up and supplying contracted out labour etc
My answers
'Employer is in UK or in existence'. What do we mean by 'employer'? Is this an umbrella company that set up the scheme for a self-employed contractor? Or are we talking about an employer in the traditional sense?
Thanks for that useful summary Rebecca.
So many problems with this proposal it's hard to know where to start.
Client-led status disagreement process - so client says 'we think IR35 applies'; contractor says 'I don't think it does'; client says 'we've decided it does - disagreement process concluded'.
No employment rights or benefits - Employment tribunals are sympathetic to individuals claiming worker status. Making a claim for holiday pay costs nothing. Individuals will be motivated to make a claim because they disagree with the IR35 status determination and the client-led disagreement process ... well, see above.
Small company exemption - we (IPSE) actually support this (in fact we support an all company exemption), but it's going to be difficult for contractors and agencies to know whether the client is a small company.
Shifting the tax liability - it troubles me that one of the entities in the chain could suddenly become liable because another entity has phoenixed.
Information sharing through the chain / shortcuts etc - this all seems like a massive ball-ache. Maybe it's just me but why is a Tory government imposing this on business to protect a few quid of revenue. We need to move away from IR35 which everyone hates and no one understands - there must be a better way.
Also, I agree with other comments on here that this will create more non-compliance in other areas e.g. loan charge, MSCs, lots of 'small companies' springing up and supplying contracted out labour etc