Posts by Doctor Syntax

UK.gov tells freelance techies to slap 20 per cent on fees as IR35 tax hike looms

"Also as others have pointed out.. If they class me as an employee Ill be looking for pension contributions, and will be invoking the working time directive when told I need to work more to get projects in early."

I think there's a precedent for this about 10 years or so ago. On the whole the contracting world didn't take kindly to a contractor nuking the client even if they thoroughly deserved it but the thought of having to cough up for employee benefits might concentrate the client's mind when it comes to assuring HMRC that this really is a contract for services.

Re: Looks like another good reason...

"...to turn the tax code into something like" etc

This is more or less what I suggested but you omitted one thing. There are a set of benefits to being a permanent employee. There are slightly less benefits being on a fixed time engagement such as an MP (5 years, no guarantee of renewal) and none with being a freelancer at risk. Those benefits have value over and above earnings and should be taxed as such so the permie gets to pay that tax as well.

BTW, how do you tax someone who has no earnings but makes a living by buying and selling at a profit?

"IR35 is a smell test: if it looks like an employee and smells like an employee then, for tax purposes, it is an employee; no matter what bit of paper it signed."

It's a good few years ago now there was a case where the contractor had one contract and the engager another. The contractor was too ill to contest the case properly, the tribunal actually had to be held in his home IIRC. The outcome was that this failed the smell test because the contractor was being bound by the agent's contract. If there had been a real dispute, of course, the agent would have been in breach of contract to one or even both parties*. But by picking a case where they weren't likely to get a proper defence HMRC got an extra test.

It should be possible to test contracts against business to business contract law as well as against employment law.

*Nothing exceptional about this in business terms. In this case the agent was buying one product (i.e. one set of terms from a supplier) and selling another (non-matching set of terms) to his customer. Unless a situation arose where the supplier wanted to invoke one of the terms that wasn't matched it wouldn't be noticed that the agent was selling something he didn't have. It was a commercial risk on his part. The same thing happens every day in other sorts of business. If you order a car from a dealer which isn't part of his stock he'll still give you a contract and take a deposit. He's going to order a car from the maker and is assuming the maker will supply it. In fact the maker could discontinue something in the spec, say the colour, or even the entire model; I've had both of those happen. The dealer is caught in the middle and has to negotiate a compromise or even risk being sued for breach of contract. There's no reason why this couldn't happen to an agent - which cross-examination should have brought out - and if it does there's not rational reason why it would make the supplier an employee of the client.

Re: > Just the first stage

"It's a subtle but important distinction."

Nothing subtle about it. The entire legal basis of trading is different. Please don't encourage the permies to think otherwise.

Re: What a good idea...

"Second is that my contracts are not nearly as secure as those of an MP."

On the other hand the MP's contract isn't as secure as a tax inspector's job. So here's a proposition which MPs should be able to support and which HMRC can't possibly object to as it incorporates one of their existing tools, taxation on benefit in kind.

1. We have a standard tax schedule for everyone.

2. We look at the security of each job e.g a 3 month contract with provision for early termination rate a little less secure than a fixed 3 month contract. That in turn is less secure than an MP's 5 year fixed term which in turn is a good deal less secure than a Civil Servant's appointment in HMRC.

3. We assign a value to the benefit security at the various levels.

4. We tax that security as a benefit in kind.

5. We use the tax from the benefit in kind to cut the tax levels on the standard tax levels substantially compared to their present levels.

MPs should be able to support that as it takes account of their relative insecurity. (Ministers' jobs are somewhat less secure than their jobs as MPs so this would also be allowed for). HMRC staff can't possibly object to their benefit in kind being taxed as it's something they routinely do to others.

In general people, except for MPs who benefit, should be paying about the same as now but the reasons for this are more transparent and permies who want to pay less can opt to forgo the security and the tax which goes with it.

Re: Seems an odd message

@Cuddles

I take it that you're a permie. Why? Don't your principles allow you to become what you perceive as a tax dodger? Or is it that you're not prepared to take the risk of acting like a business in return for being taxed as a business?

The whole sorry, long-running saga turns on the fact that businesses take risks, businesses are taxed differently to individuals, in part because of this, but that Civil Servants in the IR, and HMRC as it became, can't comprehend that an individual can work as a business.

Re: How to remain competetive

"Being charged vat doesn't really matter to a business, we just claim it back"

It depends on the business. Exempt businesses can't charge VAT, can't register and can't claim it back. They should know this, of course and expect it.

A small business which hasn't registered because of being under the VAT limit also wouldn't be able to claim it back. I'd guess this might be the situation Andy quoted - someone setting up a small B2C business but too naive to research the ins and outs properly, otherwise someone would have told them to at least consider the trade off between being able to sell VAT-free and not being able to claim VAT on purchases.

Re: 20% ain't gonna cut it. Working away from home

"Would they be entitled to expenses, travel etc?"

Yes, up to a period of two years (unless things have changed since I last had to look at it). The built-in assumption is that if a secondment lasts longer than that it's a permanent move and it would be up to the worker* to relocate their household. The same 2 year rule applies to contractors as well so a contract running for longer than 2 years becomes more expensive to operate as the tax allowance is lost. For a direct employee, of course, the employer would expect relocation costs to be paid, at least that's what happened to me is-it-really-25? years ago.

* This is a general rule, not just for Civil Servants.

"It's down to the end client to collect taxes, effectively through PAYE, before paying the contractor."

This is why Ltd Co contracting came into being - to remove that liability from the client in the event of a default.

Re: > Just the first stage

"it's a tax dodge."

I'm not too sure to whom you were replying as you didn't quote. But if it was to d3vy pointing out that Ltd Co vs self-employment was a tax dodge then you're wrong. The Ltd Co approach was forced because of IR* rules about tax defaults by self employed settling on the next link in the chain: the agency** or, in the case of direct contracts, the client. Having the contractor work via their own Ltd Co removed that liability. There seem to be areas where self employment still seems to be the norm but in general most clients are liability-averse.

There's also the point that the contractor is taking on risk. Imagine you're a manager in a large IT dept (or oil or any other area). You have a certain amount of more or less fixed workload for BAU plus a variable workload for projects or even seasonal fluctuations for BAU. How do you staff it? Even trying to budget for the fixed workload is problematic, people take sick leave, parental leave, holidays or sometimes just quit or retire. Add to that the project work & you are really exposed to risk. If you have a staff level set on the basis of hoping for the best you take the risk of being understaffed immediately someone is off or a new project arrives. If you set some higher staff level you take the risk of sometimes paying salaries to people for whom you've currently no work.

Your best solution is to add some freelancers into the mix. That means that if you have a surplus you can get rid of them quickly without redundancy payments and if you need more the recruitment process is usually much faster than recruiting permies, especially if you can keep HR out of the loop. The crux of this is you have transferred the employment risk to the freelancers.

Now the freelancer is carrying some of their clients' employment risk. This is a very different situation to the employees alongside whom they will be working whilst on contract. They are not employees, they are businesses, taking business risks like any other business and this is why, irrespective of whether they're a one-man band or a Crapita-scale giant they should be treated as such.

None of this, it seems, stops permies complaining about tax dodges. But, I ask, why do they say this whilst not jumping on the bandwagon themselves? Are they too high-principled to embark on similar "dodges" or is it possibly that they don't want to take on the risks?

* As it was then, this pre-dates HMRC

** This prompts a thought. If Uber etc are presenting themselves as an agency then maybe this puts them on the hook for defaults by their employees independently contracting drivers.

Re: Both feet, and the ankles

"allowing them to use the same tax structure (small salary and dividend) as they currently use."

Actually I suspect that this would get you looked at closely, especially if you were to then make payouts based in any way on relative contract earnings - and if such differentials existed over a long term then it would tend to instability.

The real advantage of this sort of business would be the ability to bid as a group for larger projects as a complete package. That would get you work that a solo contractor couldn't and if you're delivering a turnkey project for an overall fee there's no problem with one task being priced at a different rate to another.

Re: Both feet, and the ankles

"First you still have the issue of checking the tax but more important you wont be as cheap as the guy from Bangalore"

No problem. You outsource it all to the guys from Bangalore.

Re: Both feet, and the ankles

"when you have 4-5 people all with an equal stake in the company on different rates you would realistically only be able to take as much as the lowest day rate"

If you're setting up a company with multiple people you're really going to have to run it on business-like lines. You don't immediately take all the income out as dividends like the cowboys who gave the IR the justification for IR35. You pay salaries to all including sick pay and holidays. You also build up a surplus to cover for one or more of your consultants being out of contract for a while. You then pay dividends based on what's left over. Pretty well what a singleton should be doing if they're running on business-like lines.

BTW, I think you'd need at least 5. IIRC the original IR35 legislation specified a shareholding of >20% although it may have changed since I retired.

"I'm a permie, but I would answer NO to all four of those questions, so think again."

If you're in the UK you're being ripped off because the first two of those are illegal for permies.

1. Decide that their own contract that they force is bad from an IR3 perspective

2. Watch the contractor hike the prices by 25% or so

3. Watch their own profits go up due to the increased contractor rate.

One would like to see alternatives such as:

1. Offer genuine IR-proof contracts.

2. Take business from the now 25% more expensive bad contract companies.

3. Watch their profits go up due to the increased volume of business.

"HMRC and the Tribunals disagreed"

I always thought that the PCG didn't push hard enough. The case law was based mostly on people trying to get recognition as employees so it related to contracts of service.

Considering the balance of probabilities should have covered the probability of a contract for services by actually looking at such contracts in the real world by bringing in expert opinion from that world.

As an example, at one time the IR having on their website a contract template for provision of services to themselves. It included provision of a named key man clause. If they themselves didn't consider the inclusion of a named key man to be a problem in provision of services to themselves then a good part of the case law becomes irrelevant.

If compliance falls on agencies would it be too much to hope that the agencies start issuing genuine freelance contracts?

Wine 2.0 lands: It's not Soylent for booze but more Windows apps on Linux and Mac OS

Re: Mostly just games

"Things that you might actually use for something other than wasting time (e.g.: TurboTax, a version of Photoshop released this decade) don't get a lot of love"

Wine is also, AFAIK, supported by Crossover. That's a paid for package and the promotional blurb ("CrossOver Linux runs Windows productivity software, utility programs, and games all in one application") puts productivity first. People purchasing that should expect to get some love.

It's ironic that one of Crossover's Top WIndows Software packages, Enterprise Architect, is the one that I couldn't get running in earlier versions of Wine (or Crossover) without hacking it to remove the assumption that a 24 bit colour graphic driver could actually support 32 bit colour. Only when Sparx Sytems changed their splash screen could it be run on an unhacked Wine.

Re: All is Strange in MS Land

"does anyone know have practical experience / know how Wine stacks up with applications written for older Windows (stuff that works on 95, 98, Win2k) ?"

It varies. There's a compatibility database at https://appdb.winehq.org/

On the face of it the compatibility varies from release to release of both Wine and application. I suspect the real reason is that it varies, at least in part, with who reported a particular combination of Wine, application and hardware. The latter mattered - and maybe still does - because for a long time they refused to believe that a graphic system could legitimately report itself as 24-bit (Intel in millions of non-gaming laptops) and overrode that to 32 bit in the interests of performance and reported such to the application.

As a Wine user, with an application that would then send a 32-bit splash screen, I took advantage that it was open source. I undid that stupidity and didn't bother upgrading. Eventually I got a later version of the application that didn't break it and just accepted the distro's (Debian LTS) version of Wine.

However, there was one application that wouldn't even install in Wine and whose devs showed no interest in fixing it. It did eventually install and start but wouldn't run properly. I just ran it, when I needed to, in W2K in a VM - no connection to the net, no updates to break things and they were pretty well of the same age.

Dropbox: Oops, yeah, we didn't actually delete all your files – this bug kept them in the cloud

"You missed the irony in the previous statement "

No, I considered the previous statement very carefully. "In" would have been ironic but "into", being a different word, must mean a something different so I rejected the possibility of its being ironic.

Using the correct word is essential if you want to communicate what you mean. If you don't use the word that expresses what you intend to say you end up saying something different and should not complain if you're misconstrued as a consequence.

"put trust into the cloud"

Not possible. It's someone else's computer. You can't trust it.

Re: Dropbox has a very handy feature for NSA/GCHQ.

"This is very likely a change to Dropbox that has been subpoenaed on them, along with a gagging order, by the incoming Trump Presidency."

Don't forget US Gov already has their woman on the board there. Are you sure a subpoena is even needed.

Re: Why 60 days?

"Why does it take 60 days to delete a file when things are all OK?"

Probably to protect users from themselves. Remember that "deletion" on many desktop systems - not just Windows - is "move to wastepaper basket", not "rm $FILE". That's fair enough but it should also have the equivalent of "empty wastepaper basket NOW".

Re: Why

"what matter does the metadata mean in relation to a file that no longer exists?"

They made a mess of the deletion date so they don't know when they should actually clear it?

"at no time did any third party have access to the exposed files."

...unless they ask us for them.

Trump's FBI boss, Attorney General picks reckon your encryption's getting backdoored

Re: The irony

You most certainly can [verify the integrity of a message]. That's what PGP signatures are for.

Making such verification routine would cut down on a lot of fraud, ransomware etc. Email protocols ought to be moved onto something which incorporates PGP for this reason. There may even be some additional advantages....

Re: Back to MD5, et. al.

"At some point politicians will understand"

I've spotted a flaw in your thinking.

"Well the majority of Apple's money is already sitting in Ireland, so the head Office might as well be too!"

Are you sure you're just joking?

"60-70 year old guys having a drunken bar conversation about it. They're totally clueless but highly opinionated and think they can solve everything."

Yup, these youngsters in their 60s think they know everything.

Re: Fools

"A few years ago India blocked access to Github for a few days over the site hosting encryption code"

And they'd be wise to reflect on why it only lasted a few days.

Re: Because.....

"Maybe they should just publish their bank account details and be done with it."

And their tax returns.

"now I just weep for the future of technology."

Don't. There are enough countries out there whose technology industries have just been given a boost. What are the advantages of remaining a US corporation?

"The finest minds in cryptography have repeatedly pointed out the impossibility of building a backdoor for law enforcement into secure encryption"

It makes no difference how fine their minds are. It's politicians' minds on the receiving end.

US govt can't stop Microsoft taking its Irish email seizure fight to the Supreme Court

Re: As I recall...

"At last, someone who actually understands the problem here."

Quite a few of us do and have done all along. Some of us have also anticipated arrangements similar to those MS have put in place with DT in Germany.

"Add Microsoft, Google, Apple and Amazon together and you get a lot of data stored outside of the US."

If the US win this then there'd still be a lot of data stored outside the US but Microsoft, Google, Apple & Amazon wouldn't be involved except with set-ups like the MS/DT arrangement in Germany.

Re: @Six

An Irish court would say "There's an established procedure in place for this kind of thing - MLAT. Use it!"

Yes. That's would be the case going through the Irish court. It's courts all the way down.

" or do they just think that they've a case that's so weak or might not stand up in an Irish court?"

Very likely.

Re: bad news for Jacobs?

"That discrepancy actually exists in most countries"

However one of the bases of the colonials declaring independence was that this should not happen.

Re: So basically...

"Now for the fun part: Privacy Shield is a temporary agreement"

Irrespective of that, it's likely to fail in court anyway.

Re: @Oh Homer ... So basically...

"So there's no legal right for the US to gain access to this data as long as its never accessed from within the US."

As bid_D points out, there are procedures, at least if the US has any standing in the case. For whatever reasons they didn't use them.

Re: So basically...

"There have been processes in place for decades for the application for legal support for foreign jurisdictions in such cases. If the US Justice had followed those processes, they would have had the information by now"

In theory that's right. What I suspect is that either they didn't have a prima facie case to present to the Irish court or they didn't want to disclose the evidence they have in making that case.

It's that time of the year again: Texas school district blabs staff tax documents to phishers

"The school district says it will be offering all employees a year of free identity theft protection service."

How helpful of them to announce this. Now the black hats know open season starts in a year's time.

We're not quitting the UK: Microsoft quashes Brexit fake news

Re: Going nowhere

"Of course they will be staying, they are probably the easiest route into business data for the agencies as no other software needs to be installed."

Only as a UK office for UK-only business. EU customers will have to be served from premises in countries with proper data-protection regulations.

Continuous Lifecycle London: Save over 25% with early bird tickets

"Our best price for three days of DevOps, Containers, CD and Agile"

You couldn't afford to pay me enough to sit through 3 days of that.

I've got a brand new combine harvester and I'll give you the API key

Re: "I've got a brand new combine harvester and I'll give you the API key"

"I'd imagine El Reg was going for this particular beauty."

I just knew there'd be those who'd miss the reference. Youngsters!

Re: Whats the point of an autonomous tractor?

"The issues are whether the right crops are being produced."

I agree with you but a lot of other things have to be right to make this possible. The local population needs to be able to buy the local staples at a price that gives the grower a living and the country needs the export earnings. IOW it needs to be about making money as well as feeding people.

Cutting Hewlett-Packard Labs down to size

"less on blue-sky developments and more on things that have a foreseeable ROI."

The phrase you were looking for is "short term". Bye-bye HP. Once you were great.

Top UK judges rule: Government can't pull the Article 50 trigger alone

"Memo to all Leave scribblers:... you almost certainly will not get your own way in everything that you want."

If you did you'd end up wondering thy you wanted it. Or, more likely, you'd stridently insist you didn't.

Re: All this case result did was confirm...

"But it doesn't change the outcome unless suffcient Tory and Labour MPs defy the whip and block the Article 50 bill in a few days."

I doubt it they would. Insufficient Tories would - even if all the pro-EU ones did there are still the sceptics. And I don't think most Labour MPs would fancy their chances in the ensuing general election; maybe a few forward looking ones might consider that a defeat there would rid them of Corbyn but on the whole MPs don't go hastening an election where they seriously consider the possibility of losing their own seats. It's not as if they can all get jobs at Sellafield or the V&A.

A more likely outcome is that they'll demand more detail on what HMG intends to get out of negotiations; a pointless demand as, of course, what they're able to get will be unlikely to match their intent.

There's just an outside chance that such an extended debate might bring on a sufficient swing in public opinion to encourage some to think that they personally could survive an election were they to precipitate one but I doubt it's no more than an outsider.

The really interesting point comes in a couple of years' time when Parliament is approaching the vote on the outcome of the negotiations. The Supreme Court's decision here is predicated on the common acceptance that once invoked Article 50 is irreversible. But what happens if the outcome is sufficiently forbidding - and a substantial number of jobs have migrated overseas in anticipation - that Parliament actually votes against at that point?

Oh, the things Vim could teach Silicon Valley's code slingers

Re: Stability is for losers...*

"Elm sounds cool though, but how do I connect it to anything."

It's so long ago....IIRC we simply used it to read mail already deposited in the user's mailbox (~user/.mail ?, /usr/spool/mail/user ? can't remember). That could be either external mail coming in via ?sendmail (shudder) or generated internally through scripts piping to mail(1). There was a lot of the latter from the overnight batch. Outbound mail from it, IIRC, just worked but the whole set-up was configured before I came onboard and as it wasn't broken....

http://www.skrenta.com/rt/man/elm.1.html indicates that there is plenty documentation to help you.