IR35 Update following discussion group yesterday - survey request

[SueEllen]

Yup, I agree, but I do work on my own and all the contractors I've ever met work on their own (I get it's not just about me though). I also hear it a lot on here that we're forced to go LTD (presumably by the legislation rather than clients chasing personal assets) which suggests sole trader would a be route taken if an option.

What I'm suggesting is a structure that gives the protection of a limited company but taxed like a sole trader, thus restoring the options.

This is what IPSE are trying to flog which I don't back.

I would have been like you until I started networking and talking to other people who run businesses - while there are a lot of one man bands not all contractors are one man bands. Some people have expanded their companies permanently while others do it on occasion.

The close company route we follow makes it easy to take on extra staff etc when and if we want. There as having different types of company structures means more legislation, more paperwork to comply with that legislation and increased costs for us.

[fidot]

Whilst I agree that would be the case in some companies, I can think of several clients i have has that go out of their way to ensure contractors are not seen as part of the organisation.

Currently, there is no downside to a client doing that. This proposal wants to make the end client liable, so they are likely to err on the side of caution and declare everyone inside IR35.

[sociopath]

This is what IPSE are trying to flog which I don't back.

I would have been like you until I started networking and talking to other people who run businesses - while there are a lot of one man bands not all contractors are one man bands. Some people have expanded their companies permanently while others do it on occasion.

The close company route we follow makes it easy to take on extra staff etc when and if we want. There as having different types of company structures means more legislation, more paperwork to comply with that legislation and increased costs for us.

And in order to expand you need a flexible workforce. The resource and expertise requirements can also vary on a project by project basis. It also helps to be on approved suppliers lists. So if is acceptable for companies to win repeated work from clients why question the same principles for one man bands.

The emphasis should be placed on the arrangements i.e. Project Based Contracts. The arrangements should be signed off by end client. For example It is all very well having a contract between the LTD and Agency but does that reflect the upper agreement. An agreement of the arrangements signed off by all parties might put forward a stronger case and also flag any that are inside IR35.

I agree with Lisa that it would be better to go down the path of proving you are a business (and that doesn't just mean website and business cards). Would it be worthwhile suggesting a better BET rather than making sacrifices and hoping it will all go away?

[sociopath]

Currently, there is no downside to a client doing that. This proposal wants to make the end client liable, so they are likely to err on the side of caution and declare everyone inside IR35.

It depends on the question asked. What if we proposed to turn it around and instead asked the client to confirm that the working practices are in accordance with that document i.e. Agency contract reflects the working arrangements and your not going to be subject to SDC etc.

[BolshieBastard]

It depends on the question asked. What if we proposed to turn it around and instead asked the client to confirm that the working practices are in accordance with that document i.e. Agency contract reflects the working arrangements and your not going to be subject to SDC etc.

Yeah good luck with that thought.

Do you think the client will err on the side of absolving themselves of any potential action or shove it all onto the contractor?

'Supervision' can be anything as simple as 'making sure work was done to required standard,' or making sure the contractor turned up for the days billed.

[GB9]

Yeah good luck with that thought.

Do you think the client will err on the side of absolving themselves of any potential action or shove it all onto the contractor?

'Supervision' can be anything as simple as 'making sure work was done to required standard,' or making sure the contractor turned up for the days billed.

The example HMRC gave didn't have supervision anything like that.

If you are a developer and end up in a support pool of x people doing the same thing every day and have to work in the same way as everyone else and your work is reviewed for compliance then yes, you will probably struggle.

If you are a specialist bringing in skills that a client doesn't have and has no way of directing how you do the work etc. Then I don't see a problem.

Maybe you have only worked for the former but I have done the latter several times. I have had several clients that do not want a permanent member of staff in a short term project role. They have been more than happy to confirm this. Given this agreement on both sides then how could a contractor suddenly be found to be a disguised employee?

[SueEllen]

The example HMRC gave didn't have supervision anything like that.

If you are a developer and end up in a support pool of x people doing the same thing every day and have to work in the same way as everyone else and your work is reviewed for compliance then yes, you will probably struggle.

If you are a specialist bringing in skills that a client doesn't have and has no way of directing how you do the work etc. Then I don't see a problem.

Maybe you have only worked for the former but I have done the latter several times. I have had several clients that do not want a permanent member of staff in a short term project role. They have been more than happy to confirm this. Given this agreement on both sides then how could a contractor suddenly be found to be a disguised employee?

Because HMRC want their tax and both of you are evading it.

[GB9]

Because HMRC want their tax and both of you are evading it.

Do you work for HMRC?

I'm hoping your answer is deliberately flippant as it suggest that any company that wants a genuine business agreement is lying and all contractors are tax dodgers.

There do seem to be a lot of posters that struggle with the idea of a client that doesn't want an employee for reasons other than tax evasion. I assume these posters all declare themselves within IR35 and pay the appropriate tax.

[WordIsBond]

Her answer is not flippant, but it is not her own. It is exactly reflecting HMRC's attitude, and it is a very serious problem that has to be addressed or there will simply be another consultation, and another, until we are all PAYE employees.

The Ben-Jo example demonstrates that so clearly. The only thing that matters to them is that in Ben's case HMRC is taking less money than they do in Jo's. All of the other huge differences are just thrown out as irrelevant.

[GB9]

Her answer is not flippant, but it is not her own. It is exactly reflecting HMRC's attitude, and it is a very serious problem that has to be addressed or there will simply be another consultation, and another, until we are all PAYE employees.

The Ben-Jo example demonstrates that so clearly. The only thing that matters to them is that in Ben's case HMRC is taking less money than they do in Jo's. All of the other huge differences are just thrown out as irrelevant.

I know it's HMRC's attitude which is why I asked the question (flippantly).

As usual, contractors are guilty until we prove ourselves innocent. The trouble is there are posters on here who seem to think they are actually guilty and because they are, assume everyone else must be too.