Real life IR35 stories...?

**malvolio** · 4 February 2011, 14:06

Originally posted by LouC View Post

Friday afternoon question this...

There's always a lot of stuff going round about IR35, but in my 10 years of contracting I've never actually met a contractor who's gone through the IR35 mill.

So, has anyone here been through the process?
How did the revenue actually find out the information? (going down to client sites? asking the managers? etc)
What was the outcome?

I guess I'm an ostrich when i comes to IR35 - I always read through the contract to make sure there's nothing damning in there, but neither have I turned a contract down because it's not had a substitution clause in there. Maybe i'm naive, but I just think that the fact that i've never had a contract longer than 9 months, always pay my VAt and tax on time, have never taken sick, holiday or overtime pay - all the benefits of being a permie - that I'm not a disguised employee.

So, anyone got a real life story?
Lou

I could put you in touch with around 1700 PCG members who have. Does that help? Cases have run between four months and seven years, with an average of around 3 years. Costs vary but range between £3k and £18k for representation (although covered by PCG insurance of course). Right now, there are seven ongoing cases plus a further six scheduled for a tribunal. And, of course, these are only the PCG ones, there are bound to be others out there.

You also need to brush up your knowledge of IR35 before you decide to ignore it. OTher than RoS, none of your parameters are relevant.

HTH

**LouC** · 4 February 2011, 15:27

I do have some IR35 knowledge - I've been a paid up PCG member (Plus) for the last six years - and when I first started, I used to ask that there were RoS and MOO clauses in my contract, but like I said, over the years I guess i've just got lazy - mainly because i've never met another contractor who has been IR35 investigated.

Just out of interest, out of those 1700 PCG cases, how many were successful? (for the revenue?)

Originally posted by malvolio View Post

I could put you in touch with around 1700 PCG members who have. Does that help? Cases have run between four months and seven years, with an average of around 3 years. Costs vary but range between £3k and £18k for representation (although covered by PCG insurance of course). Right now, there are seven ongoing cases plus a further six scheduled for a tribunal. And, of course, these are only the PCG ones, there are bound to be others out there.

You also need to brush up your knowledge of IR35 before you decide to ignore it. OTher than RoS, none of your parameters are relevant.

HTH

**malvolio** · 4 February 2011, 15:37

Originally posted by LouC View Post

Just out of interest, out of those 1700 PCG cases, how many were successful? (for the revenue?)

Six, three of which were winnable had they taken professional guidance form the start and one which was sort of abandoned so Hector claimed a victory and PCG claimed a no decision made since it was supposed to go back for a retrial.

**LouC** · 4 February 2011, 15:57

Thanks Malvolio

**sy8111** · 4 February 2011, 16:06

Originally posted by malvolio View Post

Six, three of which were winnable had they taken professional guidance form the start and one which was sort of abandoned so Hector claimed a victory and PCG claimed a no decision made since it was supposed to go back for a retrial.

I am curious to know of what industries these cases are.

**malvolio** · 4 February 2011, 16:23

Originally posted by sy8111 View Post

I am curious to know of what industries these cases are.

Does it matter? PCG is 45% IT, 40% engineering and 15% a whole range of smaller sectors. I suspect the cases cover the same range. And IR35 is not related to industries, merely small businesses.

**Jubber** · 4 February 2011, 21:21

Originally posted by LouC View Post

Friday afternoon question this...

There's always a lot of stuff going round about IR35, but in my 10 years of contracting I've never actually met a contractor who's gone through the IR35 mill.

So, has anyone here been through the process?

Yep

How did the revenue actually find out the information? (going down to client sites? asking the managers? etc)

No - just sent me a letter saying that they wanted to conduct a 'PAYE Review' and turned up at my place on the agreed date. Took away all my books and contracts after asking me a list of pre-prepared questions off a sheet of A4.

What was the outcome?

Sent me a letter saying I owed them some money - not very much - can't even remember how much (this was back in 2004). The most annoying thing about the process was that he sent back all my books, receipts, contracts etc in a big box which the postman left sitting on my doorstep all day.

I guess I'm an ostrich when i comes to IR35 - I always read through the contract to make sure there's nothing damning in there, but neither have I turned a contract down because it's not had a substitution clause in there. Maybe i'm naive, but I just think that the fact that i've never had a contract longer than 9 months, always pay my VAt and tax on time, have never taken sick, holiday or overtime pay - all the benefits of being a permie - that I'm not a disguised employee.

IMO you'd be mad to turn down work because of the fear of IR35. Get the money then argue IF and when it ever happens. Mine was easy and pretty painless. There are others out there who I've read about in the press etc who have had a much worse time. I obviously meet a lot of contractors in my line of work and have yet to meet another one who has said they have had a visit.

ps There's a lot of people out there making a healthy living out of the fear of IR35 though.

**Wanderer** · 5 February 2011, 15:38

Originally posted by Jubber View Post

Sent me a letter saying I owed them some money - not very much - can't even remember how much (this was back in 2004). The most annoying thing about the process was that he sent back all my books, receipts, contracts etc in a big box which the postman left sitting on my doorstep all day.

Did you have to pay a penalty or just the taxes you avoided?

Originally posted by Jubber View Post

ps There's a lot of people out there making a healthy living out of the fear of IR35 though.

Including HMRC....

**gingerjedi** · 5 February 2011, 16:18

I'm curious to know how much the 1700 were earning?

I mostly do support and infrastructure stuff which doesn't pay as much as development or PM work, rightly or wrongly I assume I'm comparatively small fry so they leave me alone.

Real life IR35 stories...?