Loans from EBTs and other Trusts

[geoff from contracta IOM]

[QUOTE=LisaContractorUmbrella;1528083]

Simply because HMR&C have become more concerned in recent years with employment law in terms of contractor status rather than purely tax law and they no longer accept that a worker is employed or self-employed just because a contract says so

This is I guess where the tax specialist industry and those who work in it differ from most people. We don't gives a rats a*s what HMRC think, put out in their press releases or claim then try and bully people into believing.
We are only concerned with the law and how the courts enforce it as both HMRC and the taxpayer are bound by the same laws and the courts are their to keep us both honest. HMRC might seek to give a different impression to the public but not everyone swallows it. The principle of equity is the expectation that there is consistency in the application and enforcement of the law hence why case law is so important to our judicial system.
It also means people cleverer than me can examine existing case law to arrive at the expected outcome of a challenge and ensure that any arrangments meet the requirements.

[BlasterBates]

[QUOTE=geoff from contracta IOM;1528058]

None, when a plumbing company invoices you to fix your toilet why would what the company charges you bear any relation to what they pay their plumber who actually fixed the toilet ?

But for any contractor who negotiates the rate with the agency wouldn't be suitable for your scheme.

This only works for contractors you engage, nor for contractors who are looking for legitimately reducing tax after they have a contract agreed verbally with the agency. For them the only legitmate ways are Ltd or Umbrella.

[geoff from contracta IOM]

[QUOTE=LisaContractorUmbrella;1528085]

So your company negotiates the rate with the agency then?

I don't see the relevance ?

Are you aware of any law that prohibits third parties being involved in negotiating a business to business contract ?

Are you suggesting that those third parties must then be considered employees of one of the companies ?
If that was the case why would they not be as likely to be considered an employee of the agency ?

I think it would be beneficial to raise your eyes from the very narrow world of IT contracting and have a look around at how things happen in business as a whole.

[BlasterBates]

[QUOTE=geoff from contracta IOM;1528113]

I don't see the relevance ?

Are you aware of any law that prohibits third parties being involved in negotiating a business to business contract ?

The point is the contractor has a verbal contract with the agency for a rate they determine. That means the separation of contracts that is the main plank of your argument doesn't work.

If a judge asks you in court "do you Mr Contractor negotiate the contract with the agency" you coudln't say no can you, or else you'd be lying.

[geoff from contracta IOM]

[QUOTE=BlasterBates;1528115]

The point is the contractor has a verbal contract with the agency for a rate they determine. That means the separation of contracts that is the main plank of your argument doesn't work.

If a judge asks you in court "do you Mr Contractor negotiate the contract with the agency" you coudln't say no can you, or else you'd be lying.

I'll try and help with another analogy from a different industry,

If an individual negotiates a daily rate to say paint a building . The individual realises that it is too big a job for him so he approaches ABC Painting Contractors and asks them to assume the contract with the client and he will work as a sub contractor to ABC. Now lets further suppose that the painter uses the wrong paint and the client didn't want a pink building , who do you think is liable for fixing the mistake ?

Is the painter also to be considered an employee of ABC Paining Contractors because he negotiated a rate and then passed it to another company to be the contracturally bound party ? Or do you think this would be determined by the actual business relationship and the painters working practices and any agreement between ABC and the painter ? Do you not think we have thought about this ?

[BlasterBates]

[QUOTE=geoff from contracta IOM;1528125]

I'll try and help with another analogy from a different industry,

If an individual negotiates a daily rate to say paint a building . The individual realises that it is too big a job for him so he approaches ABC Painting Contractors and asks them to assume the contract with the client and he will work as a sub contractor to ABC. Now lets further suppose that the painter uses the wrong paint and the client didn't want a pink building , who do you think is liable for fixing the mistake ?

Is the painter also to be considered an employee of ABC Paining Contractors because he negotiated a rate and then passed it to another company to be the contracturally bound party ? Or do you think this would be determined by the actual business relationship and the painters working practices and any agreement between ABC and the painter ? Do you not think we have thought about this ?

If the job is too big for him and hence there is a legitimate reason then he probably wouldn't be the only painter on site. If however he was the only painter on site and the only purpose this business served was to give him loans I think HMRC and/or judge would take a dim view of it.

The BN66 people were told that the scheme had been vetted by a QC. We later learnt that the QC was a junior barrister, so I'm a little sceptical of the in depth legal thinking that scheme providers boast about.

[geoff from contracta IOM]

[QUOTE=BlasterBates;1528135]

If the job is too big for him and hence there is a legitimate reason then he probably wouldn't be the only painter on site. If however he was the only painter on site and the only purpose this business served was to give him loans I think HMRC and/or judge would take a dim view of it.

The BN66 people were told that the scheme had been vetted by a QC. We later learnt that the QC was a junior barrister, so I'm a little sceptical of the in depth legal thinking that scheme providers boast about.

No offence BB but I would probably still risk it over yours

Why would the courts care about the reason behind it if it is not revelvant to determine if the person is employed or self employed ? The point i'm making is that just because there is another party negotiating the rate for the job it does not have an impact on the the status of the relationship, the painter does not suddenly become an employee just because he negotiated the rate for the work.

[LisaContractorUmbrella]

[QUOTE=geoff from contracta IOM;1528107]

This is I guess where the tax specialist industry and those who work in it differ from most people. We don't gives a rats a*s what HMRC think, put out in their press releases or claim then try and bully people into believing.
We are only concerned with the law and how the courts enforce it as both HMRC and the taxpayer are bound by the same laws and the courts are their to keep us both honest. HMRC might seek to give a different impression to the public but not everyone swallows it. The principle of equity is the expectation that there is consistency in the application and enforcement of the law hence why case law is so important to our judicial system.
It also means people cleverer than me can examine existing case law to arrive at the expected outcome of a challenge and ensure that any arrangments meet the requirements.

But the blur between tax law and employment law has now become enshrined in case law Court quashes self-employed status at Autoclenz | AccountingWEB and Lawspeed News | Latest News > Employment status case law update so whilst I can appreciate your rat's a**e stance I can't help thinking that it is no different from sticking your head in the sand.

[LisaContractorUmbrella]

[QUOTE=geoff from contracta IOM;1528125]

I'll try and help with another analogy from a different industry,

If an individual negotiates a daily rate to say paint a building . The individual realises that it is too big a job for him so he approaches ABC Painting Contractors and asks them to assume the contract with the client and he will work as a sub contractor to ABC. Now lets further suppose that the painter uses the wrong paint and the client didn't want a pink building , who do you think is liable for fixing the mistake ?

Is the painter also to be considered an employee of ABC Paining Contractors because he negotiated a rate and then passed it to another company to be the contracturally bound party ? Or do you think this would be determined by the actual business relationship and the painters working practices and any agreement between ABC and the painter ? Do you not think we have thought about this ?

A good analogy but in order for it to be accurate in this case the contractor would have to have negotiated the rate with the end client and then called in a recruitment agency after the deal had been done

[geoff from contracta IOM]

[QUOTE=LisaContractorUmbrella;1528181]

A good analogy but in order for it to be accurate in this case the contractor would have to have negotiated the rate with the end client and then called in a recruitment agency after the deal had been done

Sorry I can't get my head around this one, lets pretend all the parties involved except Willie The Painter (i've just made that name up for him) are recruitment agencies if that helps ?

We could say he was asked to paint a building which are the offices of a recruitment agency if you like ?

We could say that ABC Painting Contractors are really just a recruitment agency that supplies painters if you like ?

Has he become an employee yet ?

We could pretend that his wife is actually a recruitment agent but I still don't see us getting any closer to him being an employee.