How does IR35 really work for IT contractors in financial companies?

[Sausage Surprise]

Hi, thanks for your response.
Well, still I don't exactly understand the situation.
If inside IR35 or in Umbrella there is no any advantage of being contractor. Same money. What is all the hassle then for? Contractor job is harder to find, much easier to loose.

Seems to me there should be something here. Either the banks/hedge funds prepare contracts to be IR35-compliant and in case of investigation take the side of their contractors or these investigations are so rear that in practice they will never catch you.

Otherwise I don't understand incentives of people to contract in financial IT.

You're a permie. I wouldn't expect you to and FFS it's "lose"

[SueEllen]

Hi, thanks for your response.
Well, still I don't exactly understand the situation.

Unless you know what their individual contracts say and their exact working relationship with your management then it's impossible to understand the situation.

Hell I don't never understand the exact working relationships of the individuals of the teams I've worked in unless they tell me.

As even if you are the same team your contracts can be different, just like as an permanent employee two people can look to be doing the same job but have different responsibilities, different hours, holidays, pay and benefits agreed with management.

[dimazigel]

I'm a contractor at the investment bank. It's all about luck. I heard some people were caught and now pay much more taxes than they used to. Some people were contracting for 10 years and tax man never checked their company. From what I heard HMRC fines for the last contract only. So it makes sense to change contract frequently. Lots of people buy PCG or QDos insurance to be fully covered in case they are caught. So contracting is a lottery. For me personally I gonna close my company next year and depart from UK. Don't wanna take this risk

[dimazigel]

Basically, there is no difference in working conditions between permies and contractors in invesment banks. It's all about luck. All of them are hidden employees. All the contracts are IR35 complaint but this peice of paper is a total scam. No one will allow you to substitute yourself.

[JamJarST]

I'm a contractor at the investment bank. It's all about luck. I heard some people were caught and now pay much more taxes than they used to. Some people were contracting for 10 yers and tax man never checked their company. From what I heard HMRC fines for the last contract only. So it makes sense to change conract frequenntly. Lots of people buy PCG or QDos insurance to be fully coverred in case they are cought. So contracting is a lottery. For me personlly I gonna close my company next year and depart from UK. Don't wanna take this risk

Where did you hear that?!?! Sounds like complete rubbish to me.

[Sausage Surprise]

I'm a contractor at the investment bank. It's all about luck. I heard some people were caught and now pay much more taxes than they used to. Some people were contracting for 10 yers and tax man never checked their company. From what I heard HMRC fines for the last contract only. So it makes sense to change conract frequenntly. Lots of people buy PCG or QDos insurance to be fully coverred in case they are cought. So contracting is a lottery. For me personlly I gonna close my company next year and depart from UK. Don't wanna take this risk

Do they have spellcheckers at IB's these days?

[dimazigel]

Where did you hear that?!?! Sounds like complete rubbish to me.

Yep. I agree. It sound rubbish, but I heard it from my colleague who was working with another contractor before and who was fined by HMRC. HMRC fined him for the sat contract only. Looks like they are lazy to investigate each contract. If you change you contract every 6 month it is very painful for them to interview each client. If you don't know but decision to fine must be made on a contract by contract basis. By the law HMRC can't fine whole business.

[JamJarST]

Yep. I agree. It sound rubbish, but I heard it from my colleague who was working with another contractor before and who was fined by HMRC. HMRC fined him for the sat contract only. Looks like they are lazy to investigate each contract. If you change you contract every 6 month it is very painful for them to interview each client. If you don't know but decision to fine must be made on a contract by contract basis. By the law HMRC can't fine whole business.

That is a totally different thing to only fining on your last contract though. Yes HMRC have to asses IR35 on a per contract basis but they can investigate as many contracts as they like.

[dimazigel]

Do they have spellcheckers at IB's these days?

fixed. If something except spelling does not look English I'm sorry for that since my native language is Russian

[dimazigel]

That is a totally different thing to only fining on your last contract though. Yes HMRC have to asses IR35 on a per contract basis but they can investigate as many contracts as they like.

Yes they can, but looks like it is time and money consuming for them. I think their target is to fine you for the last contract after that you are scared and pay taxes like you are within IR35