But if it’s wrong, something should be done. Sole trader invoices should be treated the same as other suppliers not employees.
I agree but I have clients who are sole traders who have had tax and NIC deducted from their invoices to public sector bodies who don’t seem to understand the difference between PSC and sole trader. They claim the rules apply to all off payroll workers.
Many public sector bodies - NHS/Police - are extending the off payroll criteria to the self employed not just limited companies, so outside IR35. Is this by statute and if so where is it?
We've got away with it for long enough
Like it or not the EU has decided that too little VAT is being paid and disproportionately to low VAT Members. Get used to it. It is going to continue and apply to physical products at some point.
And don't think that leaving the EU is a solution. This legislation will effect non-EU businesses, hence Amazon changing the pricing on its e-books. No more 3% VAT.
It will be unlikely that a small business will want to spend valuable time trying to comply without help. Indeed HMRC have said they doubt if small businesses will be able to. We are still researching the 'partners' who will deliver a done for you solution. Some are mentioned here and there will be others. To my mind going through a third party makes absolute sense.
The best advice to anyone affected is look at your pricing carefully and work out how much you can pay for the done for you service. Then get on with building more products and sleep soundly knowing that your tax affairs are taken care of.
The traditional model is changing.....
As a sole practitioner using Xero for my clients I welcome this move. The traditional model of bookkeeping and accounting is changing and so it should; too many businesses fail because they don't understand their numbers and only use their accountant for year end work.
Cloud accounting means that all businesses can afford good systems and a good accountant/business adviser to mentor them. Lots of us are doing that already.
The accountants that will struggle in the future are the ones stuck in the past with Sage and the like that have not moved (successfully) into the new age and still think producing year end statutory accounts is adding value.
And if KPMG want to start offering cloud based services for £150 per month good luck to them; they may be able to assign a newly qualified accountant for that, whereas what our clients want from us is efficiency (the cloud and good systems) and experience.
This is a trend that will continue.