HMRC lose ir35 case

[Chugnut]

Depends on circumstance. Personally my non working spouse held a major shareholding. In the 100k example:-

Salary 2 x 5k. NI/TAX nill.
Gross profit = 90k. CT = 18k. Net = 72k
Dividends = 64k.

Higher rate tax nil. Retained earnings 8k - later extraction via ESC16 with no CGT.

Could have extract the 8k bringing 2k higher rate tax. Total tax paid in this scenarios would be 18k CT + 2k higher rate.

Extreme, possibly. But it was achievable. And won't be from March of course.

Whilst the above is perfectly legal, given the Revenue's increasingly aggressive stance on avoidance year on year, then an investigation in (say) 3-4 years time into the above method will be challenged with the adopted HMRC mindset at the time it's investigated, not the time it was adopted.

[ratewhore]

Whilst the above is perfectly legal, given the Revenue's increasingly aggressive stance on avoidance year on year, then an investigation in (say) 3-4 years time into the above method will be challenged with the adopted HMRC mindset at the time it's investigated, not the time it was adopted.

Agreed. Assuming the 64K dividend is split 50-50, Hector would be looking to see the non-working spouses contribution to the business...

[Chugnut]

Agreed. Assuming the 64K dividend is split 50-50, Hector would be looking to see the non-working spouses contribution to the business...

And what's the say the next line they'll start pursuing aggressively is the "unrealistic market rate salary" bollox again.

The fact that you follow your accountants paid-for professional recommendation in good faith to legally minimise your tax bill seems to count for diddly squat in HMRC's eyes. They're NOT listening.

[beaker]

It sounds like you can't simply cannot declare yourself outside of IR35 with any confidence unless: -

a) the agency supplies you the upper level contract (very unlikely since it is technically nothing to do with you) and the outside-IR35 indicators are present in both.

b) the agency supplies you confirmation in writing that nothing in the upper level contract will invalidate any terms in your lower level contract with regard to your IR35 position.

c) go direct - very difficult in many cases.

If you can achieve any of the above then I think you're there. Certainly defensible by PCG, QDOS, etc. Otherwise, it now seems that your own contract is worthless and all the working practices questionnaires in the world won't overrule the upper level contract.

I also think there is small print in the insurers docs which will void any payment in the event of other issues coming to light which would have prevented cover being offered in the first place. I would say this includes contradictory terms in the upper level contract.

Using Ardesco's analogy, I would never consider a builder to be my employee whether he worked in a team, on his own, subbed or didn't sub, but I would expect to check his work (called a snagging list FFS!) and provide updates on progress. Who wouldn't? Still not my employee though.

The builder analogy is an interesting one. You wouldn't hire a builder as an employee unless you intended to keep him around until forever for an ongoing stream of work. Without regarding the specifics of IR35, surely this is the key?

Does the client want a contractor to deliver a specific piece of work (probably within a specific time) for a cost (either fixed or T+M) and then say thank you very much, goodbye or do they want a temp, who will work like any other employee, fits in with the team, doesn't cause any fuss, accepts work as it comes and hangs around until the work level drops off or they are replaced with a permanent employee.

I know which one the agency would rather sell in. IMO contracting through an agency is not how a legitimate business would run, unless the contract for services is directly between the client and the contractor.

[maxima]

for simplicity I divide people on contractors, consulters and others.

Consulters are those who does 'proper' business - have office, hire people (even temporary for a project), advertise themselves or anyhow goes directly to end-client. I would say there are few dozen of such businesses in London which run by average Joe and employs 2-3 people. (I dont mean big consulting businesses). These people a losers who refused to accept to be contractor (see below).

Contractors (me for instance) are one-guy bands which effectively sells his/her own arse (knowledge, experience, health) to end-client through agents. There are thousands of them in London.

As I said a year ago and repeat it now (especially after reading this document - http://www.inlandrevenue.gov.uk/pdfs/ir56.pdf) - all contractors in my definition are under IR35 however they pose to be businesses, buying IR35 insurances and including fictious clauses in their contract (c'mon - how many of those used substitute in past 5 years? 2?)

I believe that 'contractors' are self-employed but the way we sell our services are different from what 'regular' businesses do (and that is defined at that pdf).

I said before and repeat now - current legislation lacks definition/clarification/instruction for a form of self-employement de facto and historically created by us - 'contractors' and end-clients who need that specific services which can be delivered by us only and not temp/perm employees.

This lack in the law hasnt been covered artificially as it is another possibility to skin the cow for the government.

[Archangel]

Have you been drinking?

You resurrected an old thread just to post nonsense?

Are you Denny?

[TheFaQQer]

Have you been drinking?

You resurrected an old thread just to post nonsense?

Are you Denny?

The post is far too short, not argumentative enough, and doesn't berate Mal. Can't be denny.

[r0bly0ns]

Have you been drinking?

You resurrected an old thread just to post nonsense?

Are you Denny?

Definately not, I managed to read nearly all of the post

[maxima]

Last post was : 17th January 2008, 11:24
I am no Denny neither I am Jesus. Just irritated that most of you still dont get the real problem.

[Archangel]

Last post was : 17th January 2008, 11:24
I am no Denny neither I am Jesus. Just irritated that most of you still dont get the real problem.

You need to get out more, but OK, I'll bite, what us the REAL problem then genius?