Accountax

[tim123]

Then you're asking the wrong people. QDOS and the PCG cannot possibly know how many contractors there are out there who are just blindly ticking the "outside" box and hoping, because they probably aren't members\customers and will never seek their advice, even in the event of an investigation!

But they do know how many are applying for insurance and being rejected as unsuitable.

So far on this thread it appears to have been claimed that this number is zero. I don't believe that. I can fully accept that there are commercial reasons why people won't put a number on it, but what I find unreasonable is the, apparent, continual denial that it is a non-negligible number.

Those who are working inside IR35 are irrelevant to this discussion because they are paying the tax and therefore will never get investigated!

Then you are having a different discussion. I am discussing the ratio of people who have been advised that they are inside/outside IR35, some of these people who are in the first category, are in the group above.

tim

[tim123]

Then their win\loss figures really cannot be misleading in any way.

But as I say above, you can't compare those figures to the HMRC figures of win\loss, because you don't know how many go through without representation and just pay up. And as far as I'm concerned, they're irrelevant to me because they're not bothering to try to protect themselves sufficiently.

The missing figure here. The one that I and the other poster (forget who) are trying to establish is:

How many of those that "go through without representation and just pay up" did so because when they come to make a claim on the PCG scheme, the insurer advises them to do so because they have no chance of a win?

These people are not irrelevant to the discussion.

tim

[tim123]

We're way off topic here, but afaik, and I could well be wrong, the case involving Anax imperator centres on the client repudiating the terms of his signed contract - which included the RoS clause that would have passd the "unfettered" test

I think this "we're off topic" is a cop out. When did that ever bother anyone here?

But on the substance, I still fail to see how an appeal about the "client repudiating the terms of his signed contract" is a mis-application of existing case law (which was the original point of contention on my part).

It needs to be remembered that a party to a contract is fully entitled, in law, to break the terms of that contract, provided that he is prepared to pay the other party's losses for so doing.

ISTM that all his repudiating of the clause entitles you to do, is sue him, not to assume "specific performance" with another party.

tim

[tim123]

There are 4 grounds to the appeal, of which one relates to substitution and one to control. .

These would appear to be appeals against findings of fact.

ICBW but the judge appears to have come to his conclusion on these points after questioning witnesses. Judges don't interview witnesses to make findings of law, they do that by squirreling away at their law books.

tim

[tim123]

I see this thought train. And worryingly I agree with it.

The question then becomes what makes it exercisable ?

A simple answer might be "you're a one man band, ergo it is not". That would be dangerous in my view but does seem to be the way some thought is going.

We always had sub clauses, we were also a one man band. Does that make them unexercisable. Of course not. If we wanted to send a sub, we would try and find one. (and on a number of occasions we did farm work out).

It seems to me that the presence of clauses in a contract is no longer relevant. If they are not exercised the commissioners are simply going to infer what the client says they would demand - provided it is not totally incompatible with the lower contract.

The bar for exercisable now seems to be "actually happened". Barking in my view.

IMHO: what makes a subs clause exercisable, is the existance of a ready and willing substitute that the client is prepared to accept. They don't have to work for your company, but to satisfy "Taunton" you do have to engage them directly and bill the client as if it was you doing the work.

It never was the case that presence of a subs clause in a contract was enough. That was a hope of the IR35 'industry' and one that they thought that they could prove by case law (as appropriate cases came up). And here is one such case, and on first view it seems that the judge was not interested in that interpretation.

I'm not quite sure what it is that you think is "barking". There has been no change in the legal position, the only thing that has changed is there is now evidence that the people who have been telling you that "a subs clause is enough" are wrong (which they always were, but you didn't know it).

Now that it is an issue, perhaps it is better that we get clarity on this, or perhaps not.

tim

[Qdos Contractor]

But they do know how many are applying for insurance and being rejected as unsuitable.

I don't know what that number is. We obviously have to reject the odd application for insurance, as do all companies. However, as has been mentioned by others, the majority of contractors who come to us are aware of IR35 and know the basics of what is positive and vice versa. It isn't often that a contractor comes to us asking for assistance in an enquiry and there is absolutely no basis for us to argue his/her case.

It is obvious from MKM Consulting that we do take on cases in which victory is unlikely. So far, apart from MKM, we've managed to win them. To reiterate, we'd only reject outright if there was a negligible chance of success. It's something you rarely see when you look at each case on its merits.

[Cheshire Cat]

I don't know what that number is. We obviously have to reject the odd application for insurance, as do all companies. However, as has been mentioned by others, the majority of contractors who come to us are aware of IR35 and know the basics of what is positive and vice versa. It isn't often that a contractor comes to us asking for assistance in an enquiry and there is absolutely no basis for us to argue his/her case.

It is obvious from MKM Consulting that we do take on cases in which victory is unlikely. So far, apart from MKM, we've managed to win them. To reiterate, we'd only reject outright if there was a negligible chance of success. It's something you rarely see when you look at each case on its merits.

Question for Qdos: At what stage do you "reject the odd application for insurance"? I'm assuming that contractors need to have their insurance in place with you (and contracts vetted and agreed) prior to HMRC starting an investigation. After all, I don't apply for home insurance after being burgled, I have the insurance in place first, against the risk that I am burgled in the future.
So I guess that if you reject an application then the contractor is never a customer of yours. What I am after is a clue to how many of your customers, once signed up and paying their premiums to you, end up paying out to HMRC either because you refuse to represent them or because the case is lost?

I understand your figure of 1200 wins and 2 losses is for your existing customers (who were already insured when the HMRC investigation started). How many, if any, of your customers have paid out to HMRC after being investigated? Is that what the number "2" represents, or is the figure higher?

I'm waffling a bit, but what I'm getting it is once you've approved my insurance cover with you, and assuming I've provided accurate details, there should be no scenario in which I have to pay out to HMRC. Is that correct?

[Ruprect]

IMHO: what makes a subs clause exercisable, is the existance of a ready and willing substitute that the client is prepared to accept.

IMHO this is carp. If you were accenture and you had a consultant (A) in with a client X (for the sake of argument lets assume that this is the only consultant they have with the speciality that the client requires), and then a year later engage another client to which they want to send A. They have a substitution clause with client X, so they then recruit consultant B and send them in to client X.

At the point the contract is created there is no knowledge of the existence of the ready and willing sub, yet the clause can be exercised at a later date. Why is this any different for contractors?

[Qdos Contractor]

I'm waffling a bit, but what I'm getting it is once you've approved my insurance cover with you, and assuming I've provided accurate details, there should be no scenario in which I have to pay out to HMRC. Is that correct?

Yes, that is correct. Unless you have made any clear misrepresentations on the application form (which has never happened).

The rejections I refer to are if someone applies for TLC insurance who has no chance of ever being considered compliant (i.e. no subs, control etc etc). This is at the initial risk assessment, not at the point of a claim.

A TLC policy holder has never paid out on the liabilities and we've never refused representation. That's the point of the risk assessment.

[THEPUMA]

These would appear to be appeals against findings of fact.

ICBW but the judge appears to have come to his conclusion on these points after questioning witnesses. Judges don't interview witnesses to make findings of law, they do that by squirreling away at their law books.

tim

No the appeal will be that Hellier misapplied the law based upon the facts he determined.