Is there an argument for keeping IR35?

[Emigre]

No, but there is a good argument for moving towards equality in the way income in all it's varying forms is taxed.

It is bizarre in my view that different sorts of income are charged at different rates. It is of course blindingly obvious that anybody who can control what "sort" of income they receive will do so.

Quite. Can I interest you in a scheme that converts income into capital gain?

[ASB]

Quite. Can I interest you in a scheme that converts income into capital gain?

By some strange coincidence I ran one of those for about 25 years. It also had a tendency to convert turnover into investment income at some points. Many years ago it had a tendency not to do this. The existence of the investment income surchange was, of course, purely a coincidence.

It is quite remarkable how MyCo's remuneration policy has tended to comprise of maximum rentention for me and smallest for the government. Can't think how that can possibly have happened.

[PhilAtBFCA]

IR35 - Better the devil you know ?

Maybe it would help if we had some way of defining self employment status ?

HMRC will not give a cast iron way of defining self employment, and so the uncertainity exists in regard to IR35.

IR35 is about proving a hypothetical employment relationship, not about proving self employment ( yes, there is a small difference ). Even defining employment is only done with respect to case law, although in some respects if you look at the preminent case on this, Ready Mixed Concrete V Minister of Pensions 1968, it is clear what needs to be in place for an employment relationship to exist.

Neither employment or self employment is defined in legislation from a tax point of view, and changing this may well provide more certainty.

But I can also see where HMRC and any government ( or potential government ) are trapped. If they produce clear legislation that says exactly what self employment and employment is, then everyone would use that to the best of their ability to construct arrangements that are the one they require. That could be worse for HMRC revenue than the current situation !

Phil