IR35 - who are the actual targets?

[Wanderer]

When someone is made redundant they can get up to £30,000 tax free - the motive for the company in that case may well have been to save tax and NI! Plus on an ongoing basis they have managed to secure someone on the same rate, but they don't have to pay NI - they've saved 12.8% straight away, not to mention holiday pay, sickness, pensions...

Someone I worked with at a major blue chip company did pretty much exactly that. Took redundancy one day (a big pay off with the first 30k tax free) and turned up the next day as a contractor working for the outsourcing company that was brought in to replace him. Sat back down at the same desk on the same PC and did a six month contract there. Didn't even hand in his ID card or cancel his logon account....

He got money for nothing and fair play to the man. I don't think that HMRC would have taken too kindly to that arrangement though.