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Uber drivers are workers, UK supreme court rules

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In reply to Offwidth:

And not just while driving passengers, but while on the app waiting for jobs as well. That bit will particularly upset Uber I imagine. 

 Maggot 19 Feb 2021
In reply to Offwidth:

OK, I'll crack ...
What's happened to workers' rights going down the toilet post the B word?

15
 jethro kiernan 19 Feb 2021
In reply to Maggot:

On the back of the ruling I’m sure legislation will be passed to ensure that all workers enjoy the same rights as Uber drivers.  😏
 

2
OP Offwidth 19 Feb 2021
In reply to Maggot:

Who seriously claimed they would immediately 'go down the toilet' apart from some over excited fools? The decision is completely unrelated to the b word as far as I can see. As for things getting worse, I expect they will, but we might need to wait a few years for the clear evidence. Job security and average conditions were the worst in my working life when I retired, a year back, despite some small areas having improved (like paternity leave). The coming average decline in 2012 will be blamed on covid, yet the rich will still get richer.

Post edited at 15:28
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 jimtitt 19 Feb 2021
In reply to Maggot:

> OK, I'll crack ...

> What's happened to workers' rights going down the toilet post the B word?


Well in Germany Uber drivers for years have to be either employees or a registered business and in both cases have a taxi-drivers licence so Brexit has nothing to do with it.

 wercat 19 Feb 2021
In reply to Maggot:

> OK, I'll crack ...

> What's happened to workers' rights going down the toilet post the B word?


it's merely a decision by The Enemies of the People - surely it has no authority here in Brexain

Andy Gamisou 20 Feb 2021
In reply to Maggot:

> What's happened to workers' rights going down the toilet post the B word?

I'll get my fair share of dislikes for this (last time I mentioned this I did), but being in the EU definitely doesn't guarantee worker's rights.  Many countries might have signed up to EU directives in this area, but can seemingly ignore them with impunity.  For example, I live in Cyprus and the rights of workers (in the non public sector at least) are much poorer than in the UK in my opinion.  I'd be surprised if they were any better in countries like Romania, Hungry, etc. (and the local news channels that tend to include bits on other eastern EU countries seem to suggest they aren't).

 GerM 20 Feb 2021
In reply to Offwidth:

It will be interesting to see what implications this judgement will have for other companies and sectors. Many of aspects of the judgement will be familiar to many freelance outdoor instructors in the way they are engaged:

"The  judgment  emphasises  five  aspects  of  the  findings  made  by  the  employment  tribunal  which justified  its conclusion  that  the  claimants  were  working  for  and  under  contracts with Uber  [93]. First,  where  a  ride  is booked through  the  Uber  app,  it  is Uber  that  sets the  fare  and drivers are not  permitted  to  charge  more  than  the  fare  calculated  by  the  Uber  app.  It  is  therefore  Uber which  dictates  how  much  drivers  are  paid  for  the  work  they  do  [94].  Second,  the  contract  terms on which drivers perform  their  services are  imposed by  Uber  and drivers have  no say  in them [95]. Third,  once  a  driver  has logged  onto the  Uber  app,  the  driver’s  choice  about  whether  to accept  requests for  rides is constrained by  Uber  [96].  One  way  in which  this is done  is  by monitoring  the  driver’s  rate  of  acceptance  (and  cancellation)  of  trip  requests  and  imposing  what amounts  to  a  penalty  if  too  many  trip  requests  are  declined  or  cancelled  by  automatically  logging the  driver  off  the  Uber  app  for  ten  minutes,  thereby  preventing  the  driver  from working  until allowed  to  log  back  on  [97].  Fourth,  Uber  also  exercises  significant  control  over  the  way  in which  drivers  deliver  their  services.  One  of  several  methods  mentioned in the  judgment  is the use  of  a  ratings  system whereby  passengers  are  asked  to  rate  the  driver  on  a scale  of  1  to  5  after each  trip.  Any  driver  who fails  to  maintain  a  required  average  rating  will  receive  a series  of warnings  and,  if  their  average  rating  does  not  improve,  eventually  have  their  relationship with Uber  terminated  [98  -  99].  A  fifth  significant  factor  is  that  Uber  restricts  communications between  passenger  and  driver  to  the  minimum necessary  to  perform the  particular  trip  and  takes ,active  steps  to  prevent  drivers  from establishing  any  relationship  with  a  passenger  capable  of extending  beyond an individual  ride."

https://www.supremecourt.uk/cases/docs/uksc-2019-0029-press-summary.pdf

 kipper12 20 Feb 2021
In reply to Andy Gamisou:

There is a fundamental difference between EU Directives and Regulations.  Directives aren’t directly implemented but have to be adopted into national law, with flexibility in some areas about what can be implemented nationally.  Regulations are different, they are direct acting across all EU member states, and therefore ensure a completely level playing field.  This is why the impact of Directives can vary across the EU. 

OP Offwidth 20 Feb 2021
In reply to GerM:

Read that list and ask yourself how many of the points in the judgement apply to outdoor activity zero hour  contracts.

 jimtitt 20 Feb 2021
In reply to Andy Gamisou:

> I'll get my fair share of dislikes for this (last time I mentioned this I did), but being in the EU definitely doesn't guarantee worker's rights.  Many countries might have signed up to EU directives in this area, but can seemingly ignore them with impunity.  For example, I live in Cyprus and the rights of workers (in the non public sector at least) are much poorer than in the UK in my opinion.  I'd be surprised if they were any better in countries like Romania, Hungry, etc. (and the local news channels that tend to include bits on other eastern EU countries seem to suggest they aren't).


Why shouldn't other countries have poorer workers rights as the UK? Most do, the EU regulations are much lower generally than the advanced European countries.

 J101 20 Feb 2021
In reply to Offwidth:

Excellent thread on this on twitter.

https://twitter.com/garius/status/1362723609006006274?s=19

 neilh 20 Feb 2021
In reply to jimtitt:

How are all those Eastern European workers in Germany’s food sector doing on zero hours contracts. 
 

 jimtitt 20 Feb 2021
In reply to neilh:

Clearly better than the ones in Cyprus (or Uber drivers in the UK).

1
 jimtitt 20 Feb 2021
In reply to neilh:

And just in case you are confused the problem in the German slaughterhouses was not zero-hours workers but works contracts, that is the company contracts it's labour requirements to another company, mostly dubious East European ones. The workers had no connection with the original company and were not on zero-hours contracts (they would have enjoyed all the rights and privileges of a normal worker if that was the case).

Works contracts in the meat processing industry are illegal from 1st Jan this year.

Post edited at 15:41
 neilh 20 Feb 2021
In reply to jimtitt:

It just goes to show that even in Germany things are not perfect. 

 Justaname 20 Feb 2021
In reply to Offwidth:

Every Uber I've got into the drivers have raved about how lucrative and convenient it is compared to normal cab work, so for me I'm struggling to see the breakthrough 

1
OP Offwidth 21 Feb 2021
In reply to Justaname:

From the judgement:

"A  fifth  significant  factor  is  that  Uber  restricts  communications between  passenger  and  driver  to  the  minimum necessary  to  perform the  particular  trip  and  takes ,active  steps  to  prevent  drivers  from establishing  any  relationship  with  a  passenger  capable  of extending  beyond an individual  ride.""

Hence, your view sounds like exaggerated anecdote to me. I've had plenty of people explain to me why zero hour contracts are great for them but none could answer why it wouldn't be better to have exactly the same contract with sick pay, holiday pay and an optional pension contributions. That's in normal times let alone in a pandemic when most workers get near full protection and many gig economy workers almost nothing.

Post edited at 08:57
 neilh 21 Feb 2021
In reply to Offwidth:

zero hours contract employees can be offered pension schemes under auto enrolment. 
 

sick and holiday pay. Difficult one when your hours vary anyway. 
 

The issue is that flexibility where it suits an employee comes at a price .

the zero hours contracts I really object to are the van drivers who work for the likes of dhl etc . It’s a con . 

 summo 21 Feb 2021
In reply to neilh:

I didn't think DHL were so bad I wouldn't buy anything from a company that uses hermes though.

It's just a race to the bottom, every body wanting everything cheaper and faster, without a thought to the implications. I don't really care if Bezzos is starting a space program, when it's funded from money that should have been paid in tax so countries can fund their services properly. 

 Neil Williams 21 Feb 2021
In reply to summo:

The problem I find is that companies don't tell you who they're using.  I would always pay a few quid extra for DPD to be used but it's rare for companies to offer that in a way you can be sure.  Why not I have no idea.

 neilh 21 Feb 2021
In reply to summo:

They generally operate on a franchise basis. Van drivers Ming is the worst example offering hours contracts and abuses in the employent contract market. 
 

One of the ansswers is to have a strong economy with low unemployment. Then unskilled people will be in demand forcing companies to alter their employment practises. 

the other is to make sure you have a decent education system turning out people with skills.

Ad I said I do not like the contracts in certain sectors . But there is a place e for them  

1
 summo 21 Feb 2021
In reply to neilh:

Or change the tax system, which makes it harder for employers to evade their responsibilities by having lots of 'self' employed staff etc..

Hermes and amazon have very little foot print in sweden. To be self employed here you have to apply, you need to prove you have multiple employers and contracts, otherwise they'll say no. It stops companies dodging their tax responsibilities. There are still some zero hour type practices, but not on the scale of the uk. 

 TechnoJim 21 Feb 2021
In reply to Offwidth:

I have a question on what I think is a related subject, perhaps some of the brains on here can help? This being UKC I'm sure no-one will mind roaming away from the initial thread topic...

I've been self-employed for 12 years since I retrained as an electrician. I work for a few different companies but a good chunk of my work comes from one mob in particular. 

On Friday I received a call saying that as of April, this company won't be dealing directly with self-employed contractors. They'll be using an intermediary agency to book us, and this agency will take tax and NI at source. Or, alternatively, I can set myself up as a limited company (a lot of lads in my game do this already).

I don't have any issue at all being taxed at source etc, it already happens if I do jobs that fall under CIS, and I'm a firm believer that paying the tax you owe is a cornerstone of a functioning society. 

However, when I asked why this change was happening, I was told "because of IR35". My understanding of IR35 was that it was supposed, in part, to stop one-man bands setting up as limited companies to provide their services and potentially pay less tax, so I was curious as to why I was almost being encouraged to do this.

I might have grasped the wrong end of several sticks here! Also, should make it clear I have no axe to grind and I've never been tempted to set up as limited because it seems like loads more paperwork and hassle for no real benefit to me and the way I live and work.

Thoughts/wisdom appreciated.

Post edited at 11:20
OP Offwidth 21 Feb 2021
In reply to neilh:

I know ZHCs can have those extras.  I'm talking about foolish souls on minimum wage who have no protection or extras and yet think their contracts are great.

Holiday pay is easily dealt with pro-rata like in a standard job. You work n hours and earn a paid hour of leave. Sickness arrangements are important to show the contract is a genuine ZHC (rather than an abusive one): ZHCs often have regular hours and if you are ill for a regular slot you should not lose the contract. Sick pay could be arranged on occasional regular slots missed, if an employer really cares about their staff.

The issue isn't extra flexiblity comes with a choice, when there is no choice of an alternative.

 AJM 21 Feb 2021
In reply to TechnoJim:

I think the recent change to IR35 is that the employer's rather than the employee (or employees LTD co, or whatever) now has to make the judgement as to whether self employed contractors are in fact disguised employees. Previously the onus was on the employee to state they were genuinely self employed.

I'm guessing, but it may be that's what's driving it in that they think that contracting with a Ltd co allows them to certify it as genuine contracting out rather than disguised employment. I'm not sure I agree with them if so, given how some in my industry have interpreted this, but presumably there is room for interpretation...

 TechnoJim 21 Feb 2021
In reply to AJM:

Thanks man, that makes perfect sense in the light of some of the other changes within this particular company that have been happening over the last year or so.

Just feels weird to me, I most definitely don't want to be regarded as anyone's employee, although I'm very aware that my situation is different to that of an Uber driver or other gig economy worker. Don't want anyone thinking I'm trying to draw equivalence between the two!

Post edited at 12:01
OP Offwidth 21 Feb 2021
In reply to TechnoJim:

An interesting view of someone lobbying for wider action on poverty...  pragmatically seeking a better Britain for everyone.

https://www.theguardian.com/society/2021/feb/21/louise-casey-homelessness-t...

In reply to neilh:

> zero hours contract employees can be offered pension schemes under auto enrolment. 

It is an obligation to offer a stakeholder pension if the employee qualifies. From memory it is something like under £5k pa no pensiion, £5k-£10k the employee can ask but employer can say no, above £10k the employer must offer a pension. And there is an age thing as well

> sick and holiday pay.

Most of my staff are zero hours, they all get holiday pay and sick pay as, AFAIAW, it is the law.

 deepsoup 21 Feb 2021
In reply to TechnoJim:

I think working on actual gigs is one of very few fields where it really makes sense to be part of the gig economy!    (But even then not for everybody involved.) 

It seems like a real stretch though, delivering parcels, driving taxis etc., being considered a gig and the advantages of someone doing such a job as an "independent sub-contractor" as opposed to an old-fashioned casual employee seem to be entirely on the employer's side.

 deepsoup 21 Feb 2021
In reply to AJM:

> I'm guessing, but it may be that's what's driving it in that they think that contracting with a Ltd co allows them to certify it as genuine contracting out rather than disguised employment.

In the gig economy of actual gigs there was a big push this way about 15 years back or so.  Almost all the big hire companies supplying lighting, sound, video etc., equipment for touring concerts started to insist on freelance crew (so called 'roadies', though strictly speaking only backline crew are actual roadies) setting themselves up as a limited company.

As company directors as opposed to sole traders, incidentally, it's something that's lead to most of those people falling through the cracks and getting next to no government support over the last year.

 Ian W 21 Feb 2021
In reply to Graeme Alderson:

> It is an obligation to offer a stakeholder pension if the employee qualifies. From memory it is something like under £5k pa no pensiion, £5k-£10k the employee can ask but employer can say no, above £10k the employer must offer a pension. And there is an age thing as well

Basically yes.

> Most of my staff are zero hours, they all get holiday pay and sick pay as, AFAIAW, it is the law.

Absolutely yes. Although there can be odd situations with ssp for those on part time / variable hours such as student / weekend staff, but there is a legal requirement to pay hol pay and sick pay.

 summo 21 Feb 2021
In reply to deepsoup:

> As company directors as opposed to sole traders, incidentally, it's something that's lead to most of those people falling through the cracks and getting next to no government support over the last year.

They haven't fallen through the cracks, they've been excluded. Most deliberately set themselves up to pay less tax, they appear as owners/directors, not workers. They shouldn't be surprised that a hmrc scheme for employees or workers excludes them. They have benefitted for years paying less tax.  

2
 TechnoJim 21 Feb 2021
In reply to summo:

In the events/entertainment industry, as deepsoup mentions above, a lot of the bigger production companies won't deal with you now unless you're a limited company. I know a lot of folk who went limited in the last decade just to ensure they could keep working on their regular gigs and then couldn't claim any relief during the pandemic. 

Totally agree with you though that many people out there, in all industries, were using a limited company set-up to pay less tax for a long time.

 Duncan Bourne 21 Feb 2021
In reply to Andy Gamisou:

Heck. Workers rights don't even always guarentee workers rights.

OP Offwidth 21 Feb 2021
In reply to Ian W:

There is a minimum weekly earnings limit with a single employer to qualify for statutory sick pay.

 TechnoJim 21 Feb 2021
In reply to deepsoup:

> I think working on actual gigs is one of very few fields where it really makes sense to be part of the gig economy!    (But even then not for everybody involved.) 

> It seems like a real stretch though, delivering parcels, driving taxis etc., being considered a gig and the advantages of someone doing such a job as an "independent sub-contractor" as opposed to an old-fashioned casual employee seem to be entirely on the employer's side.

Absolutely. I asked my initial question in this thread as all of this seems to tie-in to a wider discussion around employee rights, fair taxation and working poverty.

Zero hour contracts that squash the rights of people who are already living quite precariously are disgusting and I'm delighted that the court has ruled against Uber's appeal. 

To a large extent, I can pick and choose who I work for on my own terms, it's an entirely different thing.

Post edited at 16:01
 TechnoJim 21 Feb 2021
In reply to Offwidth:

I shall have a read. The Graun was my paper of choice but I've been avoiding all sources of news for the past month or so as my head was melting.

 summo 21 Feb 2021
In reply to TechnoJim:

It does seem pretty common. Same with TV or radio folk(presenters) working as a company rather than an employee. It is technically legal of course, but if you've had 20 years paying less tax(plus no employers contributions, NI etc ), then you can't suddenly expect hmrc to bend over backwards to find ways to pay you when bad times occur, that's what savings and insurance are for. 

 TechnoJim 21 Feb 2021
In reply to summo:

Indeed, you can't have it all ways. 

 Maggot 21 Feb 2021
In reply to summo:

In my contractor days, I was strongly advised to go Limited, because basically, I could avoid tax.  Everything would go down as expenses.

Pay back time.

1
 deepsoup 21 Feb 2021
In reply to TechnoJim:

> Totally agree with you though that many people out there, in all industries, were using a limited company set-up to pay less tax for a long time.

Arguing for draconian punishments for those who minimise the amount of tax they're paying by entirely legal means is something usually attributed to lefties, not a word I'd use to describe Summo based on most of his previous postings!

I think that might be reasonable grounds for somewhat reduced support, I'm not so sure about zero.  There was some discussion around this on here back during lockdown #1, mostly involving self-employed builders and the like.  They at least have been able to get back to work since.  (Which is arguably insane during the current lockdown, but there we are.) 

People who earn their living providing specialised tech support for 'mass gatherings' have been prohibited from working by law for getting on for a year now, and it seems likely to be more like about 18 months by the time that changes.  (At which time I guess we'll find out how severe the effects of Brexit will be on whatever remains of the industry by then.)

Beyond <-this-> sentence, I won't even bother mentioning the hypocrisy of a chancellor who happens to be a fantastically wealthy former Goldman Sachs hedge fund manager frowning on the 'tax avoidance' of middle-income self employed working people.

Post edited at 17:30
 deepsoup 21 Feb 2021
In reply to summo:

>  then you can't suddenly expect hmrc to bend over backwards to find ways to pay you when bad times occur

There's a lot of middle ground between bending over backwards and offering no support whatsoever to the proprietors of small businesses that have been prohibited from doing their jobs by law for almost a year now (and counting).

 summo 21 Feb 2021
In reply to deepsoup:

If individuals stretched the tax laws to the nth to avoid paying tax and their employers, by effectively having them invoice each other as a company, deliberately lower their own tax commitment and employer obligations and so on, then why should hmrc bail them out. 

Some of the money folk were saving should have been saved for a rainy day and insurance taken out, which would be tax deductible.  

If companies had had paid employees,  then all options would have been open to them. They made a choice. Yes I agree it's tough. Those who've saved, covered themselves, invested etc will survive. I know an entertainment provider, lights, screens, music, special effects, fire, smoke etc... they have employees, not contractors and have invested more money into their business and diversified into outdoor events, drive in cinema etc.  

 SouthernSteve 21 Feb 2021
In reply to Maggot:

> What's happened to workers' rights going down the toilet post the B word?

I think this has been coming more generally for some time. Have a look at the IR35 regulations that were meant to come in last April. In future you can't turn up for a job like an employee and not be an employee! 

 TechnoJim 21 Feb 2021
In reply to deepsoup:

I think thee and me are probably on the same page. 

A reduced support scheme for those that have paid in less seems like a sensible compromise. 

Hard to make people feel invested in paying the full bhuna, tax-wise, when the gang in charge and their pals continue to operate by what seems to be a different code, and legal means exist to facilitate paying less in.

 deepsoup 21 Feb 2021
In reply to summo:

> Some of the money folk were saving should have been saved for a rainy day and insurance taken out, which would be tax deductible.  

It was, and they did.  It hasn't been a rainy day though, it's been a full year of total global shutdown with probably another six months or so to go.  I'm not sure what insurance you think was available that would have paid out even for existing jobs that were cancelled, let alone those beyond the first few months that simply never happened.

> I know an entertainment provider..

Yeah, clearly.  Ok then, no point me trying to tell you anything, I'm out.

 TechnoJim 22 Feb 2021
In reply to deepsoup:

It really has been a bad year. I'm a sparks but most of my work is in events. I lost all my gigs last year, I was able to find other work in the autumn but it's been a rum old time. So many people struggling.

Sounds like you might be in the industry too? Hope things aren't too bad for you dude. 

OP Offwidth 22 Feb 2021
In reply to summo:

Those traders running individual companies with their expensive accountants and lawyers and supercars and yachts were proper Bond supervillains eh? More likely you are an idiot and the only people who can stretch tax loopholes to anything like an nth degree, by necessity using shell companies based in places like UK administered tax havens, are people with serious wealth. Our chancellor can change tax law or spend more on tax enforcement if he feels the system is not working... making law that leaves hundreds of thousands of people with no income and no recompense for that seems brutally unfair to me and in economic terms hugely wasteful.

2
OP Offwidth 22 Feb 2021
In reply to TechnoJim:

Probably wise to stay away from most news for a while yet. Genuinely interesting and unusually informative stuff will get linked here and other forum users will confirm its worth a read. Best of luck with your work.

 summo 22 Feb 2021
In reply to Offwidth:

I've never said they are super villains have I? But if you deliberately set yourself as a director of a one person business paying yourself a dividend, then it's only done with one goal in mind. 

It's true hmrc could change the rules, but they don't need to. Those people creating such companies just need to accept they won't be treated the same as an employee paying income tax and NI, with an employer also making contributions. 

OP Offwidth 22 Feb 2021
In reply to summo:

Yes. That goal is to run a business. Such a business is allowed to issue dividends in law and claim genuine expenses back against tax .Some businesses of this type might fiddle tax or accounts but that is illegal evasion not nth level tax avoidance. It is nigh on impossible for such a business to nth level tax avoid.

"Those people creating such companies just need to accept they won't be treated the same as an employee paying income tax and NI, with an employer also making contributions."

Perfectly reasonable however that doesn't mean its fair or sensible that  one group will have massive support following new law which prevents them earning and the other group should get nothing.

Post edited at 08:29
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 deepsoup 22 Feb 2021
In reply to TechnoJim:

> I'm a sparks but most of my work is in events.

I spotted that on a previous thread, glad to hear you're getting by. 

I'm a rigger.  Our paths might have crossed at some point, though I haven't worked outdoors much the last few years.  I'm doing ok ta, no kids to feed, qualified for some furlough payments and spent a chunk of last year driving a supermarket delivery van.  I know a lot of people who're much worse off, but also a few who've found it a bit of a revelation being at home with their families and not away on tour for months at a time.

 TechnoJim 22 Feb 2021
In reply to deepsoup:

Aye, plenty of folk seeing a lot more of their families and looking to make permanent changes to the way they work once things pick up again. 

I'm hearing encouraging signals about work towards the end of the summer, can't see international touring getting going until at least next year though. I know a lot of lads on their way to Japan, no idea whether or not they'll actually go through with it.

 TechnoJim 22 Feb 2021
In reply to Offwidth:

Thanks man. I actually stopped looking at Off Belay and The Pub for quite a while as part of my news blackout.

I don't like that I've become someone who doesn't pay attention to what's going on but I ended up obsessing over every statistic, every pronouncement, every online response. No work and restrictions on going to the hills are not a good combo, as I'm sure a lot of people here have found.

Once you step away from the constant tsunami of information and opinion and get some fresh air, things generally seem much better.

 summo 22 Feb 2021
In reply to Offwidth:

> Yes. That goal is to run a business. Such a business is allowed to issue dividends in law and claim genuine expenses back against tax .Some businesses of this type might fiddle tax or accounts but that is illegal evasion not nth level tax avoidance. 

I never said anyone was fiddling accounts. It's an entirely legal process to minimise tax. But if you minimise tax for decades, you cant expect maximum support in return. 

There are loads of hmrc covid packages for businesses. But, if a business has no premises, assets, employees etc.. then it's really a business in name not nature. Folk who were self employed and had submitted tax returns for previous years have had support. 

OP Offwidth 22 Feb 2021
In reply to summo:

You claimed these one man band companies were involved in nth level tax avoidance, which is why I was sarcastic about supervillains. Instead of digging further the sensible route is to apologise and say you meant they were too often guilty of tax evasion or fraud (or on the subject of any avoidance, using very basic approved avoidance, a long way from what anyone sensible would describe as nth level)

Post edited at 10:40
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 deepsoup 22 Feb 2021
In reply to summo:

> But if you minimise tax for decades, you cant expect maximum support in return. 

Again you write as if there is no middle ground between 'maximum support' and 'zero support'.  "We can't be expected to do everything for these people, therefore we should do nothing. 

If a freelance technician who went ltd fifteen years ago (again, through no choice of her own quite likely, when all the large companies in the industry made it a requirement) has been paying only 80% of the tax they'd have been paying as a sole trader or an employee, why are they now entitled to 0% of the support?

And it's so weird seeing this argument from people* who have always seemed perfectly sanguine in the past about the much more arcane tax avoidance schemes used by the genuinely filthy rich.  Shell companies, offshore accounts, non-doms, and such.  Anyone who suggests they should pay their fair share is quickly accused of 'the politics of envy' and of course it's totally fine that the Daily Mail is owned by a holding company based in Bermuda (but administered in Jersey on behalf of the British aristocrat Lord Rothermere, who is famously French for tax purposes).

* - Speaking generally here, I don't know if this is you.

1
In reply to neilh:

Except from the first of Jan this year?

 deepsoup 22 Feb 2021
In reply to summo:

> But, if a business has no premises, assets, employees etc.. then it's really a business in name not nature.

It's more than business enough to be awarded a £20 million contract to supply PPE if the owner just happens to qualify for Matt Hancock's friends and family scheme.  No tendering process required, informal applications accepted by WhatsApp.

You say these self-employed people should have invested some of the tax money they'd saved in an insurance policy - what madness that seems in retrospect when all the insurance companies threw up their hands and refused to pay out Covid related claims on the grounds of 'force majeure'.  They'd have been much better off donating a few grand to the Tory party, bidding in an auction for a game of tennis with Honest Bob Jenrick or such.

1
OP Offwidth 22 Feb 2021
In reply to deepsoup:

" a business has no premises, assets, employees etc.. then it's really a business in name not nature."

More than that...these are entities that are fully legally formed under intentional legislation.... we claim as a country we want to encourage small scale entrepreneurs yet a government changes the law with no compensation at all for many; and others who would deserve some or more it if they didn't fall between timing cracks (like those who started a business early in 2020; or women owners who took a maternity break and discovered that reduced income was included in compensation calculations for their typical earnings). Many hard working people who stand to lose all their liquid assets with no compensation until they reach the savings limit to qualify for Universal Credit.

The latest on cases where covid cover was denied despite policy wording providing apparent cover and subsequent successful legal challenges:

https://www.bbc.co.uk/news/business-56032045

Post edited at 11:45
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 summo 22 Feb 2021
In reply to Offwidth:

You consider a self employed person making themselves a sole director of a company and paying themselves an annual dividend of profits normal? 

Yes, there are far worse, but if everyone was reducing their taxes by 10-20% it's  hardly surprising there is £2 trillion in national debt and all state services under funded tor decades, what do people expect!?

 summo 22 Feb 2021
In reply to deepsoup:

There is a difference between being self employed and paying income tax and NI, and a sole person becoming a company director and paying themselves a dividend. Under current covid  schemes the former will get government support. The latter is a tax dodge for both individual and employer. 

 Gustavo 22 Feb 2021
In reply to summo:

> There is a difference between being self employed and paying income tax and NI, and a sole person becoming a company director and paying themselves a dividend. Under current covid  schemes the former will get government support. The latter is a tax dodge for both individual and employer. 

Working through a Ltd company allows you to maximise take home pay, rather than pay umbrella company and agency fees. You still pay tax and have to comply with the law. Dividends are taxed, as are company profits. 

5
 summo 22 Feb 2021
In reply to Gustavo:

>  Dividends are taxed, as are company profits. 

At what rate? Less than paying income tax and NI? 

What about the so called employers tax contribution? 

What if the company, say amazon, offshore it's profits and only pays a fraction in the uk? 

If the one man company also invoices with VAT it lowers the so called employers end of year vat bill too, even though all they've really done is paid someone who should have been directly employed by them. 

The winners are the individual and company, the losers are any state service you want to fund through taxation. 

Post edited at 15:46
OP Offwidth 22 Feb 2021
In reply to summo:

Of course its normal. If it wasn't normal it wouldn't be allowed. It's often a choice of work life balance where the business is kept small to enable that with a bit of cash to spare. People running companies on a work life balance basis often have some independent income from elsewhere (pension or inheritance).

Your rant is a political one, I guess saying you would prefer the system should change.. a pretty odd view for a self proclaimed liberal.

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 summo 22 Feb 2021
In reply to Offwidth:

> Of course its normal. If it wasn't normal it wouldn't be allowed. 

I'm pretty sure these type of company set ups weren't initially visualised for one person self employed people, with no premises, assets, or staff. How can you really be a director of a company taking the dividend, when you are only person working there.

But that's the way it is. I just hope those who support these set ups and the companies which employ such individuals, never complain about under funded services, lack of government spending or so called austerity. A government can only spend the taxes it receives.

OP Offwidth 22 Feb 2021
In reply to summo:

You are just being ridiculous. The lost tax take from such companies is a drop in the ocean compared to major legal scams enjoyed by globalised companies in the UK and the tax avoidance and evation of the very rich. 

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 summo 22 Feb 2021
In reply to Offwidth:

> You are just being ridiculous. The lost tax take from such companies is a drop in the ocean compared to major legal scams enjoyed by globalised companies in the UK and the tax avoidance and evation of the very rich. 

Not really. How do you think those massive companies make so much money in the first place? How they employ folk matters. From the van driver to the radio 2 presenter, this type of tax minimisation makes a difference. 

If you doubt me, why not prove it with the maths? Say tax paid in total from an employee on £30k, versus £30k dividend? 

OP Offwidth 22 Feb 2021
In reply to summo:

Deepsoup has correctly pointed out that to trade in certain economic areas when providing specific one-off services you need to be a company to get the work. I've given another area where a company is run at small or no profit for lifestyle reasons. We live in a liberal democracy where this is quite rightly legally possible, with clear tax rules, so what on earth is wrong?  Why pick on single director single person businesses when any small to medium owner Director can get tax arrangements of the type you describe? Tax incentives are designed to encourage use, as without them the economy would be smaller. If an incentive is misused as a loophole them the government need to close the route of abuse. Yes tax take reduces in some areas but usually comes back elsewhere and the economy is bigger.

Post edited at 18:01
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 summo 22 Feb 2021
In reply to Offwidth:

> Why pick on single director single person businesses when any small to medium owner Director can get tax arangements of the type you describe?

Because they are a business with their own employees. The other is just a one man band. A self employed person can still invoice another company, going the whole 9 yards; directors and dividends etc.. isn't required. 

OP Offwidth 22 Feb 2021
In reply to summo:

The extra tax gain from employees may well be trivial. What is so wrong with being a one man band providing you don't work almost exclusively for one company (a breach of the tax law)

1
 summo 22 Feb 2021
In reply to Offwidth:

> The extra tax gain from employees may well be trivial. What is so wrong with being a one man band providing you don't work almost exclusively for one company (a breach of the tax law)

I don't think you understand. Being self employed, paying tax (income, NI, vat..). Isn't the same as setting yourself up as a company, being a director, taking a dividend and only paying cgt. 

OP Offwidth 22 Feb 2021
In reply to summo:

Of course I understand that. By being a company you separate your assets from the business, limit liability, widen the range of organisations who will use your services, protect the name of your business, have significant tax benefits (including on pensions) and much easier transfer of the business if your die. Often it's easier to raise funding or gain grants or get others to invest (for shares).

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 deepsoup 22 Feb 2021
In reply to summo:

> A self employed person can still invoice another company, going the whole 9 yards; directors and dividends etc.. isn't required. 

And so we come full circle.  While you are entirely correct in what you say, a sole trader most certainly can not do that when the large company in question has explicitly told them that they will not be sub-contracted on to any future project unless they do indeed go that 'whole 9 yards'.

"Dear self-employed person.  From such and such a date we will be subcontracting technical work to limited companies only.  We appreciate the excellent work you have done for us in the past, but will have no further dealings with you if you are not a limited company by then." 

This was the ultimatum presented to freelancers working in the sector by almost all of the large production and equipment hire companies around 15 years ago.

Besides which, the other benefit to becoming a limited company is having, y'know, limited liability.  It's hardly arcane for a self employed builder to do that.  It's not as if the white van is registered in Lichtenstein and they're renting their cement mixer back from the Bermuda-based holding company that somehow technically owns it.  (All of which wheezes our fabulously wealthy former investment banker chancellor seems to be completely cool with.  It's just - by the standards of any of our millionaire cabinet ministers - poor people he doesn't approve of avoiding taxes.)

 summo 22 Feb 2021
In reply to deepsoup:

I give up. We can discuss it again when the uk is £3trillion in debt and has even worse services. 

OP Offwidth 23 Feb 2021
In reply to summo:

I will happily march with a banner saying "summo was right" if any research evidence is produced on major tax losses from one person businesses compared to other pars of the economy. You are the weirdest self proclaimed liberal I've ever come across arguing against the legal structure and tax situation of that type of company.

Post edited at 09:55
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