Legal advice: 'IR35 Fail' - what to do now?

[Sally BFCA]

Actually Sally that is a very simplified view and not terribly accurate. Recent cases have shown that HMR&C consider many other factors - if your statement was true the contractor in the Dragonfly case wouldn't have failed.

Yes I agree with you Lisa, but these remain important factors that will be first in line for consideration.

[LisaContractorUmbrella]

They are important factors but the following statement that you made was totally misleading and could lead new contractors into all sorts of trouble

"If any one of these is lacking then it is outside of IR35."

[ASB]

Yes I agree with you Lisa, but these remain important factors that will be first in line for consideration.

The 3 factors you mention are according to case law absolute. The issue is what HMRC will argue (sometimes successfully sometimes not) enables them to show those factors in the work of fiction they are in fact judging - i.e. the implied contract.

[Maxi Power]

Thanks all for the words of advice. I guess the general feeling is that I probably shouldnt get too obsessed with the legal advice and should go with my own instinct. Only problem is like a lot of people i just really dont feel like I have a clear understanding of my position - i certainly believe myself to be offering my services to a client rather than being a disguised employee but i also feel like working on a daily rate means i have to expect a certain element of direction from the client. Where that leaves me i feel none the wiser. Im pretty sure im going to put myself outside IR35though and stick the money in a high interest savings account and hope for the best.

[Maxi Power]

Of course, your PCG membership will cover that eventuality anyway - you do have one, of course...

Of course!! Certainly wouldnt want to face an investigation without legal cover

[Hex]

You have other options. You could get another tax law firm to review it (e.g. Abbey Tax or QDOS). Both can offer you insurance against all tax and penalties if they review your case and reckon you're outside. Both require you to fill in their own working practices questionairres.

I would pick one of these two and see where you get to. If they do pass you and you take the insurance then it will not cost you that much compared to the probable tax you will pay by declaring yourself inside.