New PCG IR35 Questionnaire

[northernladuk]

Then you're doing a damn good impression of someone who does.

If the PCG represent the whole of the contractor industry then perhaps someone who does speak for them should pop over to answer Kate's questions.

Agreed. I am getting a little nervous there seems to be no agreement here and am starting to wonder where the PCG is coming from in all this. I would hate to think I have joined the contracting equivalent of UNITE.

[Kate Cottrell]

Kate and Mal,

This is not the PCG forum - please do not allow this to spin off.

Kate - this is a public forum and you were out of line publishing Mal's details here. I do not expect that to happen again.

Sorry, to you, to Mal and to all. Please accept my sincere apologies for this.

Kate

[LisaContractorUmbrella]

Agreed. I am getting a little nervous there seems to be no agreement here and am starting to wonder where the PCG is coming from in all this. I would hate to think I have joined the contracting equivalent of UNITE.

Calm down NLUK they're not that bad! The PCG have a vested interest in contractors working outside IR35 as that is their customer base and I think that they have gained confidence over the last few years in their approach to the legislation as HMR&C don't seem to be investigating that many cases. It seems to be for this reason that they are almost opining that IR35 can be ignored, especially if you have taken out insurance. However, they don't take into consideration what HMR&C's intentions may be towards contractors - this industry has been legislated against with the sledge hammer and nut approach over the last few years and compliance has cost £billions and it seems to be simply because HMR&C can't put contractors in an employment box or a business box. The AWR legislation was designed to give employment rights whilst IR35 was designed to force people into the category of either employee or employer. From what I have read, the new IR35 tests have been designed to approach the problem not from the point of view of disguised employment but more from a business point of view - in theory this is a good idea but I cannot see that it will work as those practises that are adopted by SME's are unlikely to be adopted by one man Ltd co's unless it is a requirement of IR35 and if that's the case we are then back to square one. Personally I think that a straightforward test should be applied - sort of yes/no approach - e.g. if in any 12 month period you only have 1 client or spend more than 90% of your time working for 1 client you will fall inside IR35 - easily measured and people wouldn't be able to raise bogus invoices to friends or family for an hour's work just to get out of it - just a thought

[malvolio]

Sorry, to you, to Mal and to all. Please accept my sincere apologies for this.

Kate

No problem. Except I must point out that the CC don't run anything, that's for the BoD and the Executive. We merely aim to represent the broad membership.

@NLUK - The PCG position (the one I am largely echoing) is laid out on their website. They accept the HMRC tests are going to be used, they are unhappy with the scorings that may be applied to them and are concerned that they may not give a truly representative answer. They broadly support the one year experiment to see who is right and who is wrong.

My argument - not the PCG's, my own - is that if the risk assessments are to have a value they should reflect the overal reality of the number of cases found to be in or out of IR35. What Kate and I disagree on is (a) that number, (b) is that a fair basis for assessment and (c) how right or wrong I am.

HTH

[bobspud]

But you have not answered the questions Mal and now you have raised more! Why should you not take account of all those people in umbrellas? Do you think all those in umbrella companies are there for reasons other than IR35? Do you agree that some are there because they are clearly caught by IR35? Do you agree that sadly some have been forced into them by agencies and end clients? Do you agree that those that have paid up under IR35 year after year cannot be ignored or dismissed as being ill informed? Do you stand by your claims, as you often say, they would be outside IR35if only they joined the PCG?

We are back to the same old "one size fits all" problem. The fact is there are all sorts of of people working in all sorts of ways from the agency temp through to the professional contractor. How would you, Mal, differentiate? How can you have everyone or some % of these people being pre-determined that are all low (or even medium) risk of IR35 investigation? Do you think it is right to concentrate on a new system going forward rather than to keep dragging up events (and statistics) of the past 12 years? Were you in favour of the move to the business tests as opposed to ceasing to call for IR35 to be abolished? Are you pleased that there are going to be lots more investigations?

Finally I note that you are now content to wait and see what comes out of the next 12 months, so how does this fit with your business test frenzy (scaremongering?)when you know that the tests or the scores are not going to be changed until there are some concrete results?

Kate Cottrell

Kate / Mal,
would you mind explaining how this has helped the cause of the average Freelance Contractor?

For all the juicy work creation that has gone around in contract reviews and IR35 protection insurance. How exactly have we been benefited?

Seems to me not very much.

I set out to contract because I no longer wanted to be payed a pittance and told I had to ask permission to travel while my useless chief exec traveled first class and took multimillion pound bonuses.

Since I left that company I have provided my own tools/office/public liability insurance collected substantial amounts of VAT and payed corporation taxes as the law required. I have also wasted countless hundreds of pounds getting contracts reviewed and rewritten and generally messed about with to counter some spectre of the unknown.

Now we hear that the best the forum has come up with, is a set of questions that try (but by no means bind) the risk of the type of business I am in. Well thanks alot...

Can you explain how you think that chasing for the business of lots of small customers would make make me more of a business than if I decide to focus on turning over £170k helping one large well financed customer fulfil a string of multimillion pound projects? Surely not putting my company at financial risk through rash or poor decision making is a key tenet of the role of the company director?

[northernladuk]

Calm down NLUK they're not that bad!

I get that, just this discussion doesn't look that good, even if Mal says they are his views.

<snipped to save my eyes!!!>

- e.g. if in any 12 month period you only have 1 client or spend more than 90% of your time working for 1 client you will fall inside IR35

I hope to god you don't get your way

[LisaContractorUmbrella]

I get that, just this discussion doesn't look that good, even if Mal says they are his views.



I hope to god you don't get your way

No I agree with you, it doesn't

I am sure I won't and I realise that was a bad example but I do wish that HMR&C would work from a point of simple logic rather than trying to make everything so complicated that people almost feel duty bound to find a loophole

[bobspud]

. Personally I think that a straightforward test should be applied - sort of yes/no approach - e.g. if in any 12 month period you only have 1 client or spend more than 90% of your time working for 1 client you will fall inside IR35 - easily measured and people wouldn't be able to raise bogus invoices to friends or family for an hour's work just to get out of it - just a thought

I have a friend that does design work for a large industrial client. (he designs brochures and builds stands for their exhibitions) They are vast and world wide and he does so much work for them he neither needs or wants more external business. Under your example he would go from being a bespoke artwork house to an employee. I'm sure that he would be very happy with the simplification.

Also consider this thought. The average IT infrastructure project lasts a year, maybe 18 months on the big jobs. That involves designing the solution, signing it off, building it, then reviewing the build against the build specification, and then migrating the existing estate over to it. That sort of work is too hard to juggle 3 or 4 clients at once just to "look" like some idea notion of a business in a permanent employee civil servants head..

However the infrastructure houses that I perform this sort of service for want me to turn up for that project immediately then leave again just as fast when the last server cuts over to BAU. I tend to work on that ONE project and never see what goes on anywhere else in that organisation.... Thats what the clients want. a flexible resource that comes prepared.

All the faffing about with tax law loses the point that scores of big companies are already filling the shores with ICT's that don't pay tax and are ruining our industry. adding 10-15% extra tax onto my day rate hardly make me competitive...

[swamp]

I don't think business and public sector clients would be very happy if their contractors have to walk out half way though a project for "tax reasons".

Similarly one must pity a hard up contractor who could find one short contract in a year....

[northernladuk]

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I think Lisa's comment was a very rough example plucked out of the air to make a point. I don't think we should get hung up on the actual example and implications of it.