[Closed] This Plimlico Plumber / Self Employed Contractor case

That was my take on what I heard on the Radio. He's had 6 years of the advantages of self employment, now he wants the firm to behave as though he was a FTE.

Suspect it might be more complex than that, though or it wouldn't be in court.

I know some of the Pimlico Plumbing Dynasty and they're far from the nicest people I've ever met.
Two sides to every story..

he wanted the right to reduce his workload to 3 days from 5 days after he had a heart attack they refused to do this and he argued he should be allowed to do this

TBH its a grey area where someone self employed basically works for only one company- they are not really self employed are they they are just employees with less rights.
I can see why the courts are getting stricter on this as the employers are just taking the piss.

IMHO asking to reduce your working week post heart attack has nothing to do with PAYE and is not unreasonable
Someone truly self employed could easily do as [probably]could someone employed its those stuck in the "netherland" who cannot

http://www.bbc.co.uk/news/business-38931211

[i]Suspect it might be more complex than that, though or it wouldn't be in court. [/I]

Yep, and expect more of the same coming through especially with the new off-payroll rules for contracting in the public sector.

he wanted the right to reduce his workload to 3 days from 5 days after he had a heart attack they refused to do this and he argued he should be allowed to do this

I suspect that as a 'proper' (for want of a better term) contractor he would ordinarily be able to manage his own workload. If you can't set your own working days you are effectively an employee under IR35 rules. If the subbie wins HMRC will want a slice of tax pie from them both! Could be a pyrrhic victory for the subbie.

Yep, and expect more of the same coming through especially with the new off-payroll rules for contracting in the public sector.

whats the consensus of potentially seeing contractor "rates" reduce because of this? I suppose it all depends on how niche you are/valuable, but it's always been given that if you work as a contractor, you take the good with the bad.

edit: Sandwich, good point on IR35 - potential to open a can of worms he may well regret.

If he were a real contractor, would'nt he just "sub" out the other two days ?

I too think the 'contractor' vs IR35 stuff is about to come and bite both companies and individuals.
I employ a network of Accredited Contractors - but none do more than about 30 days a year for us, and all work elsewhere (usually many other places).

I heard the owner of the plumber company interviewed and he advised he had taken advice from HMRC to ensure they weren't falling foul of IR35 rules. IF true, there would appear to be a dispaity.

And aren't most NHS consultants essentially subbies.

Yep, and expect more of the same coming through especially with the new off-payroll rules for contracting in the public sector.

We're dealing with this. Quite funny to hear people complaining "my accountant says I'll be paying 40% tax as a result, that's disgusting". You're a [i]looooong [/i]way into the 40% tax band, you [u]should [/u]be paying 40% tax!

And aren't most NHS consultants essentially subbies.

Do you mean senior doctors, or "management consultants"? If the first, then no, they're not as most are employed by the hospital, so they're a normal employee. The ones who work through agencies or their own limted companies will fall into the new IR35 rules though as they are, in all but name, employees. They can't send someone else to do the work, they have to turn up at a certain place at a certain time, they use the employers resources to do the work etc etc (although, of course, they'll all have been following the rules beforehand and paying their PAYE and NI contributions themselves won't they, so this won't make any difference...ahem....)

Although the changes only cover public sector bodies, not private companies providing public services. So when an NHS hospital gets charged more by workers to cover the extra tax, but the Virgin health centre down the road doesn't guess who's going to be slammed in the Daily Mail for overpaying and wasting taxpayer's money? 🙄

This is why we never have self employed contractors and only work with certain umbrellas who have IR35-proof contracts.

Does sound like he wants to have his cake and eat it, this trend in ruling will probably have a big impact elsewhere.

certain umbrellas who have IR35-proof contracts.

If anything is FAR from IR35-proof, it's an umbrella company

[i]Although the changes only cover public sector bodies, not private companies providing public services. [/I]

Hmm, not as simple as that...

TBH its a grey area where someone self employed basically works for only one company

Except it's not really a grey area is it. If it looks like a duck and it quacks like a duck, then guess what.

they are not really self employed are they they are just employees with less rights.

This (and I consdier myself a liberal capitalist!)

Hmm, not as simple as that

Is it not? (This isn't my day job btw, just something I've been involved in)

they are not really self employed are they they are just employees with [s]less [/s][b]fewer [/b]rights.

This (and I consider myself a liberal capitalist!)

This, and I consider myself a bleeding heart leftie grammar pedant 😉

Employee with fewer rights, or did you mean less tax...

The term contractor can cover so many types of employment and B2B services. In this case I'm sure it was discussed employment and Plimlico got the best deal.

In most IR35 situations it's the employer / client that gets to have the advantages and yet it's the employee / contractor that will get done by IR35.

As you say there's such a range, from people on £100's per hour to Deliveroo and Uber workers and the 'being screwed' level changes a lot between the two.

In the case of high paid contractors, I'd say that this:

In most IR35 situations it's the employer / client that gets to have the advantages and yet it's the employee / contractor that will get done by IR35.

switches to give the benefits to the worker. For example, the NHS is desperately trying to recruit consultants, but they know they can earn loads more and pick and choose their hours by working as a "contractor" through their own company, pay themselves minimum wage for the shifts and then get the rest of the money as "dividends", without paying their 40% income tax on it.

by working as a "contractor" through their own company, pay themselves minimum wage for the shifts and then get the rest of the money as "dividends", without paying their 40% income tax on it.

Well, they'll pay 20% corporation tax on the profits that their company makes, and they take dividends from the remainder, which are taxed at 7.5% up to £43k, 32% up to £150k and 38% over that, but yeah, carry on.

Haven't the church of England clergy been playing this blag for longer than anyone else?

Aren't they self employed but only work for the church? I believe they have some unique rules just for them.

Well, they'll pay 20% corporation tax on the profits that their company makes, and they take dividends from the remainder, which are taxed at 7.5% up to £43k, 32% up to £150k and 38% over that, but yeah, carry on

I don't know why the people I know of who will be affected by this were so up in arms then.

Because they'll pay (a bit) more in tax than they do now. I was just trying to dispel the myth that contractors pay no tax; they do, just not (quite) as much as a 'proper' employee does.

32%

32½%

But importantly, there's no NI liability (employee or employer) on dividends. That's worth quite a bit.

The new system - AFAIK - involves the entity that pays the contractor deducting income tax and NI from their invoices, just as if they were PAYE.

I like the optimism of the non-contractors predicting doom and heartbreak for all contractors.

[I]The new system - AFAIK - involves the entity that pays the contractor deducting income tax and NI from their invoices, just as if they were PAYE.[/I]

Yet not been able to set any expenses against these taxes (ie you're expected to have PI insurance in most cases, and need an accountant). Plus we don't get sick/holiday/pension pay etc, so you'd expect that we'd need more to cover these.

And employers aren't offering perm jobs either.

The entire working world is riddled with contractors who aren't. I'd be happy to see a whole bunch of them on PAYE and paying a fairer share of tax. Just maybe we'd be able to look after our old, have better public services and fund a few more hospital beds?

Not everyone who is working on ir35 is getting amazing contractor rates either, the 6 months I spent on ir35 8 years ago I was getting a pretty poor rate, it was just all that was available to tied me over. I would also add their was no mythical tax advantage from my perspective either.

I'm sure Charlie boy could pull a few favours......

https://www.theguardian.com/politics/2016/oct/03/tory-donor-backs-legal-challenge-to-brexit

I jumped ship last year from a regular employee to a "contractor" with a limited company setup and touting my wares to whoever will buy them 🙂 . I did it because I'm intending to retire fairly soon and wanted to maximise my income in the remaining working years of my career.

It's not possible to extract shed loads of cash from the company vehicle without paying lots of tax, as in *lots* of tax. I'm going to be putting as much as I can into my pension and paying myself enough to get on with life. After that, there will be some ££ left in the company but not much. With no redundancy/holiday pay/sick pay then I need a buffer to tide me over should I not be able to find that next contract.

So, yes, the contract rate is good but it's not all roses. If the public sector model gets rolled out to the private sector in a few years then I'd probably pack it in.

As I understand it the court ruled he was a 'worker' for the purpose of certain rights. I've seen similar decisions by an employment tribunal relating to subbies in construction meaning they were entitled to holiday pay etc.
Your status for tax purposes i.e. whether you're employed or self enjoyed is a separate decision and I think you could be self employed for tax whilst also being classed as a worker.