Private settlement over IR35 claim

[expat]

And by extracting the taxation from my bottom line, how am I suppsed to pay for the supposed employee benefits I theoretically enjoy from MyCo?

By billing enough. If your clients don't want to pay a high enough rate, perhaps they are looking for a disguised employee without the cost; and you should not deal with them.

[tim123]

Nevertheless, why should I now be expected to pay taxes because some Gorgon-inspired drone believes me to be sort-of-but-not-quite-employed by my current client? .

Because there is a law that says that you must.

Whilst you may have a point wrt complaining about being told how to distribute the turnover of your company, you have no justifiable complaint linking this back to whether you have, or haven't, received employee like benefits from your company's client.

tim

[malvolio]

Because there is a law that says that you must.

Whilst you may have a point wrt complaining about being told how to distribute the turnover of your company, you have no justifiable complaint linking this back to whether you have, or haven't, received employee like benefits from your company's client.

tim

What? Does not compute...

Read it again - why should I pay personal taxation on income that is not personal? Where does it say I have to pay more tax than I am legally required to do? What employee like benefits do you think I have received from my client, because I'm buggered if I can see any.

And just to be really pedantic, it is not a law, it's a regulation.

[maxima]

Ah. The one on the P35 that asks "Do you consider yourself subject to the requirements of the intermediaries legisation?" - aka the hands-up-I'm-caught box - and that is being extended from this year to cover the changes to the taxation rules aimed at killing off Managed Service companies.

As I am about to register my company - I havent seen P35 either.

May I ask you a question - what do you think - will expensive accountant (like SJD for instance) tick that box in a time?

[malvolio]

WIth SJD, you tell them if you are IR35ed or not and they tick the box or not accordingly.

[Mustang]

I think with all these sorts of things we have to make a stand. If you are outside IR35 fight the investigation - no point in just giving in!

My first contract resulted in me taking the client to Small Claims since they paid my invoices late and I charged them interest. They claimed I wasn't entitled to interest since it wasn't in my contract!! I won the case too!!

The law is there to protect - if we don't use it, we will get pushed around all the time.

OK - rant over!!

[tim123]

What? Does not compute...

Read it again - why should I pay personal taxation on income that is not personal? Where does it say I have to pay more tax than I am legally required to do? What employee like benefits do you think I have received from my client, because I'm buggered if I can see any.

And just to be really pedantic, it is not a law, it's a regulation.

mavilo.

What you are (IMHO wilfully) misunderstanding, is the whole point. The 'law' is one that makes all of the (residual) company's income, your personal income. So that is the part of the process that you have a complaint with.

This has nothing whatsoever to do with, whether you have, or have not, received employee benefits from your company's client.

As I said before, they moved this responsibility onto *your* company by paying it a rate which included those costs. So, it is your company that is expected to provide you with 'employment' rights, and it just so happens that all of the costs that the company is obliged to pay on you behalf are all deductable from the company's income before applying the IR35 rules, so you aren't taxed upon not receiving them.

I'm not saying IR35 is right, I'm just saying that you have no arguement with your client over it.

tim

[rootsnall]

Ah. The one on the P35 that asks "Do you consider yourself subject to the requirements of the intermediaries legisation?" - aka the hands-up-I'm-caught box - and that is being extended from this year to cover the changes to the taxation rules aimed at killing off Managed Service companies.

You mean, you've never seen it...?

I presume my accountant fills in the P35 and does not tick the box, I wrote a letter to him yonks ago saying I am outside IR35 blah blah blah. Otherwise, panic panic panic !!!!

[rootsnall]

I presume my accountant fills in the P35 and does not tick the box, I wrote a letter to him yonks ago saying I am outside IR35 blah blah blah. Otherwise, panic panic panic !!!!

Just looked up what a P35 is, I did fill it in online, best check what I put, I very much doubt I ticked a box without knowing what it was on about !? Panic panic panic !

[malvolio]

mavilo.

{snip}

I'm not saying IR35 is right, I'm just saying that you have no arguement with your client over it.

tim

For a start I am outside IR35 and have never yet been inside. I'm not claiming anything from anyone.

The point I'm making is that if a worker is going to be charged full PAYE and NICs on 95% of his income on the basis that HMG believes him to be a disguised employee, then why should he not also have the benefits accruing to an employee?

And the point of that argument is to demonstrate that IR35 is not only fundementally unfair, it is totally failing to achieve its objective, which was to prevent employers abdicating their obligations by sacking staff and taking them back as contractors - in effect it is doing precisely the opposite by taking away the worker's rights while still charging him tax as an employee.

And going back to the original point, anyone that signs up for IR35 without being very aware of the realities of the situation and being certain that they are in fact caught is not only a fool but a fool paying out 20% too much tax.