The great IR35 swindlle

[richy]

Just wondering.. am I the only one that thinks the existence of the "IR35 risk" has spawned a whole industry of support and insurance services? None of these services add anything to the industry, just become part of the "cost of doing business"

My ltd co regularly receive marketing offering insurance:

"IR35 - STILL ALIVE"
"Govt vowed to 'improve its administration'. This is proving to be concern for many experts" - £324 - bargain!

"Fee protection insurance" - my accountants firm regularly send me these. cost is usually ~300 for ltd co!

They all strike me as a little bit of fear-mongering. We could after-all get insurance for loads of things, "drain blockage insurance" etc etc. the marketing plays on fears in my view

IR35 has been around for 10 years, and has barely "raked in" anything for HMRC. What I wonder is, if after the tories got in, and well known industry organisation still didn't manage to get it off the rule book.. what's the point in keeping all these organisations and fears going?

Anyway.. my own view is that if corp tax for little ltd co's was nudged up from 21% to the rate larger ltd co pay (28%) there would be less difference between PAYE (inc NI etc) compared to declaring divs. Sadly tax rates not being simplified in this fashion.

I welcome other's viewpoints. Thanks, rich

[malvolio]

If you look at the membership of the IR35 Forum, there is one seat occupied by a body that doesn't make their living from IR35. Guess who...

With a total direct tax take of £12m since 2000 (check the PCG website...), something is keeping IR35 alive. Most likely it's the monies being paid by all the people who have been scared into either paying up under IR35 or using umbrellas. Usually for no good reason. So consider...

If you want to maximise the take up of a given tax (or any other legislation) you either make the rules binary so nobody escapes (think speeding or drink/drive limits) or so wooly you can deem anyone you fancy as being in scope. The latter has the benefit of driving people to comply who might not otherwise do so.

IF you want to justify the existence of this nonsense law, you focus on the Friday-to-Monday only-doing-it-to-avoid-tax brigade and don't care that you're screwing the 99% of contractors who are simply trying to earn a living. Check out the last Budget.

If you want to preserve your expensive, high margin market for employed consultants, a good move would be to add to the operating costs of the independents the clients might use in preference since they are around one third the cost.


Of course IR35 is a nonsense law driven by commercial self-interest. Haven't you been listening?

[xoggoth]

We seem to be ruled by lawyers and accountants who perpetuate complexity for their ends.

[tractor]

..

We seem to be ruled by lawyers and accountants who perpetuate complexity for their ends.

The market was created for these kind of 'services' based on FUD and they just took advantage of it. Many of us have been saying for a long time that IR35 is optional and you are right, the money to be made from IR35 is not from those caught by it but by those who are scared into compliance.

[JoJoGabor]

The reason I got insurance against IR35 was to do with tue potential risk. for my £250 ish per year I will hopefully protect myself against a fee of £x0000's which would wipe my whole life out, cars, house, wife (potentially)

The potential downside of not insuring a blocked drain is losing what, £200 max? I can live with that, but not the potential life changers

[DonkeyRhubarb]

A better analogy would be comparing it with home buildings insurance. The premiums of a few hundred quid a year are similar, as are the 6 figure sums at risk.

The chances of getting stung by IR35 are probably about the same as your house burning down.

The risk may be miniscule but the consequences of either event would be life changing if you were uninsured.

[psychocandy]

The reason I got insurance against IR35 was to do with tue potential risk. for my £250 ish per year I will hopefully protect myself against a fee of £x0000's which would wipe my whole life out, cars, house, wife (potentially)

The potential downside of not insuring a blocked drain is losing what, £200 max? I can live with that, but not the potential life changers

£120+VAT with PCG membership

[malvolio]

£120+VAT with PCG membership

Or perhaps he means £220 plus VAT for Plus, which is actually a far better package.

[TheFaQQer]

£120+VAT with PCG membership

Or perhaps he means £220 plus VAT for Plus, which is actually a far better package.

Neither of which pay out any penalties if you are found guilty. Which is the gist of this thread, no?

[HeadlessChicken]

Have there been cases where a contractor ltd company has been caught by the 'dreaded IR35' ? (or too personaly/sensitive to be discussed over public forums)

Tried searching previous posts, but could not see this being discussed. Would be good to know from real cases of companies being caught by HMRC - what happens, how much companies have lost, pain of the process etc...

Thanks in Advance.