HMRC, IR35 & 'Small Fry' contractors

[Schrodinger's Cat]

Is HMRC even bothered about ‘small fry’ contractors? Over the past 5 years I’ve worked with probably 100 support guys on or around the £20 per hour mark with a ltd co and none of them seem bothered by IR35 and some haven’t even heard of it.

As far as I can tell it’s pretty hard to work in a support environment and not be caught by IR35 yet most people I know are happy to declare themselves outside.

Does HMRC have to justify if a case is value for money for the tax payer when it decides which contractors to pursue? Is it in the public interest to try and investigate someone who is only earning £40k with so little to gain? From what I’ve seen over the years the evidence suggests there’s next to no chance of being investigated.

[thunderlizard]

Yes, as with any tax investigation: they are supposed to weigh up the amount they think they could get (which they are pretty good at estimating) against the amount they think they would have to spend before they get it (which they are awful at estimating).

[BolshieBastard]

HMRC will use a statistical analysis, probably based on the NI Number when sampling which cases to investigate.

When 'your' number comes up, they start sending you probing letters and together with the answers you give, will probe more.

Of course this wont be the only information they use but generally speaking, that's how it starts off.

[malvolio]

Statistically, there's around 1.2m potential candidates for an IR35 case and around 15 new investigations a week so the odds are fairly good anyway. Thre are a lot more tax inquiries though - any apparent anomaly in a return can trigger one of them - and any of them could turn into IR35. So keeping the paperwork 100% correct and covering all the bases contractually is the way to go.

Incidentally, you can do support work and be outside IR35. Why wouldn't you be able to?

[jigsaw]

Incidentally, you can do support work and be outside IR35. Why wouldn't you be able to?

One of my contracts is support work. One of my professional contract reviews (for insurance purposes) concluded, in the context of the amount of control the client had over me:

"Support roles by their nature tend to mean that the work controls you and they are often on an ongoing basis with no clear deliverables determined at the outset of the assignment which does limit the amount of control available to you."

BS I know but that seems to be the view some will take.

[blacjac]

Support Role duty:

handle support calls for system X

OR

handle all support calls that come in from y department


Developer Role duty:

Develop system x

OR

Develop all systems needed by y department


I fail to see how one needs more D&C than the other....

If you are contracted to support system x and you get asked to look at system Y, then you can say no.
If you are contracted to support department y and get asked to look at a support call for department x, then you can say no.


AIUI D&C for IR35 purposes means they can make you do something that you are not contracted to do.

If you are contracted to do all support calls for any system that come in from any source. Then that is not D&C in my opinion as that is what you are contracted to do.

IANAL though.....

[malvolio]

Yep, that's how I see it as well (and IANAL either...)

The other wrinkle is the insistence that you have to be there for certain hours equates to D&C. Well, duh - no point being there when the users aren't, is there, and if you were a permie you would still have to be there at the same certain times, so what's the difference?

[expat]

Yep, that's how I see it as well (and IANAL either...)

The other wrinkle is the insistence that you have to be there for certain hours equates to D&C. Well, duh - no point being there when the users aren't, is there, and if you were a permie you would still have to be there at the same certain times, so what's the difference?

Surely if your presence is required by the demands of the work that you have contracted to do, not by arbitrary demands of a manager, then you are not under D&C, you're just doing the job?

[Sockpuppet]

Surely if your presence is required by the demands of the work that you have contracted to do, not by arbitrary demands of a manager, then you are not under D&C, you're just doing the job?

Exactly. My client has no D&C over me. I can decide my hours (and I do change them to suit me). I have started as early as 3am and as late as 6pm.

As long as I do a "reasonable amount of work" they sign for the day. Of course the operation here is 24/7 so that helps but even if I was 9-5 whats the point of turning up if the people I need to see are not here.