Quote:
Originally Posted by Bel
(a) I'm not sure what you are getting out here.. 
(b) the PCG haven't proven their case at all.
I think it's a bad idea to raise peoples' hopes without any evidence to go on. |
(a) Sorry, I thought you were up to speed on these issues. IR35 was mooted originally to prevent the Friday-to-Monday syndrome of an employee switching to being a freelance contractor doing his old job. Primarola made the case that in fact freelancers were incorporating simply to avoid paying tax - notwithstanding the contstraints of S134c (or S44-7 as it now is) - and decided to use IR35 as the tool to correct that utterly erroneous situation. There is still a need to prevent employers sacking workers and re-instating them as contractors to avoid employment rights costs like redundancy and holiday pay, but there is no way that should apply to the genuine freelance worker. Therefore IR35 can be retained but
only if it is correcly addressed to the very few relevant cases and not all 1.4 million freelancers
(b) £9.2m direct income since it became law, against a projected (in a written answer you can find in Hansard) £220m in additional NICs
per annum . Agreed we don't know how much is being paid unnecessarily by people who have been scared of falling foul of IR35. While HMRC are refusing to tell us that, using the number of umbrella users, the average rates and the difference between the inside and outside IR35 marginal tax rates it can be estimated at around £450m in PAYE and NICs in total. In the overall scheme of things, given the problems it causes, that is a pitiful amount. No it's not absolute proof, but only NL believe it a tax worthwhile continuing.