New PCG IR35 Questionnaire

[maxima]

My view has always been that as the IR35 legislation has not changed

thats the main problem here.. what really happened (and I am sure it was premeditated by power brokers and public forum was just a puppetry) is that IR35 legislation was hard and expensive to apply. now it is easier and cheaper to apply hence you will see the number of investigations grow 10 fold in next year and number of recovered payements against genuine freelancers as myself will grow 50 times in next 2 years...

the fact that legislation didnt change is simply sign of how the power work. it is harder to change law but simple to manipulate procedures and exploit the system to get most out of the existing law. IR35 obviously had a great potential but was obscured too much. they cleared the view and they are now going to enjoy it...

moreover if I was in charge I would do the same.

what WE had to do... We had to take the challenge and fight for legislation which splits freelancers from small business and fight for adequate taxation of this separate legal entity.

what we DID was that - we bought insurances, we hoped, we feared and sulked, we thought other people (Kate at al) will help...

we did it as LOSERS. and we lost.

so no need to cry now (includes me too )

[gingerjedi]

Any news on what will happen to newly caught contractors? Will they have an amnesty, will there be a third way? Or will they just screw you for every penny they think you should have paid over the past x years?

If they think I'm not a proper business that's fine but there still has to be some reward for the employment benefits we don't enjoy and all the additional costs of being a freelancer.

[swamp]

what WE had to do... We had to take the challenge and fight for legislation which splits freelancers from small business and fight for adequate taxation of this separate legal entity.

^^^^ this.

We should have argued for a variant of Schedule D.

[Boo]

I thought Friday to Monday referred to employees quitting their job on Friday and coming back on Monday as a contractor doing the same job? Could be wrong though.

No, you are right. Where Boo got that nonsense from is anyone's guess.

How could "Friday to Monday contractor" mean anything but a person who is a contractor between Fridays and Mondays ?

Consider : where you have worked as a permanent employee previously is irrelevant to your IR 35 status because if you start work as a contractor it is the working practices that determine IR35 status not your client. Ie, if you commence contracting at a new firm you still need to have compliant practices whereas if you commence contracting at your current employer you are not deemed to be caught by IR35 provided you are no longer working in the manner of an employee. It's harder to prove is all.

I got the info from somewhere or other back in the day when IR35 was first being proposed but there is an independant reference on another contractor site which I won't link to here :

the so-called Friday-to-Monday contractors where in essence salaried employees working fulltime during the week for an employer in the traditional sense. Some of these employees however had begun moonlighting at the weekend on a contract basis whereby they were paid a flat fee by there employers instead of the usual overtime rates.

The idea behind this, developed by the big consultancies, was that employers could avoid paying their staff time-and-a-half for overtime if they took them on as "external contractors". To disguise their identities these employees where encouraged to purchase off-the-shelf Ltd Cos in order that their names did not appear anywhere on the "external" contracts with their weekday employers.

This method of working allowed the employers to pay much less for out-of-hours working since the employee would put the money through the Ltd Co and avoid NI and most income tax. Although referred to as Mon-Fri contractors many of these employees would also channel their weekday overtime paytimes through their Ltd Cos.

I think the press must have got hold of the wrong end of the stick because stopping work as an employee on Friday and commencing as a contractor on Monday is not indicative that IR35 applies o the new relationship. It is certainly possible for a genuinely new business relationship to come into existance under those circumstances and in fact I worked at a firm where someone had done just that and worked from home bidding for new bits of work as opportunites in his specialism arose.


Boo

[Boo]

Perhaps you should take a look at the things they are doing in a bit more detail then; they are about a hell of a lot more than IR35. Or would you rather there was no representation of contractors in the various policy committees and we had no voice in the consultation on any and all relevant legislation? Had PCG existed in 1999 in its present form, IR35 would never have happened.

The PCG do jack for contractors. We would be much better off if they had never formed and as for the opt-outs and other results of the "representation of contractors in the various policy committees" it's enough to make a cat laugh to hear you singing their praises. Talk about shooting ourselves in the foot...

If the PCG had existed when IR35 wasfirst floated then who knows what state we'd be in ? My bet is compulsory salaries well up in the 40% bracket but then IR35 was implemented by professionals in order to catch the specific fish I mentioned in another post, and thank god for that, I say, looking at the mess the PCG has dropped us in every time it has a meddle.

The PCG mostly exists to benefit the myriad of parasitical organisations that indulge their feeding frenzy at our expense, agencies, specialist accountants and advisors etc etc, the list goes on and on.

And I've never understood the mentatlity that says £220 is a lot to pay to protect a £100k a year income stream...

£220 is a lot for the insurance which is available more cheaply elsewhere. And sourcing tax investigation insurance seperately from advice has the additional advantage that you can use your own accountant to represent you if it ever comes to that.

What I have said is that you and I earn our crust through our companies and find new clients, and take on all the risks that implies. People whose only client is their previous employer, and people who run companies to absorb earnings they get separate to their permanent day job, are not taking those same risks and perhaps shouldn't be looking to gather the same tax advantage (which isn't one, given how much we do actually pay end-to-end) as we do. If that means IR35 is the mechanism, then fine.

Having a single client, having a client who used to employ you, having clients in addition to employment are all irrelevant to your IR35 status.

Boo

[LisaContractorUmbrella]

Having a single client, having a client who used to employ you, having clients in addition to employment are all irrelevant to your IR35 status.

Boo

Not necessarily true Boo

[jamesbrown]

Having a single client, having a client who used to employ you, having clients in addition to employment are all irrelevant to your IR35 status.

Boo

Strictly, that's not true, as working practices matter. At least indirectly, a previous relationship of employer-employee can make it tougher to break from being considered "part and parcel." Not a primary factor, but you also cannot dismiss it. Further, these things are likely to matter in terms of being investigated (e.g. for the business tests), if not ultimately deemed employed.

[Lewis]

The PCG do jack for contractors.

They did a good job fighting S660. That helped a lot of contractors.

[swamp]

They did a good job fighting S660. That helped a lot of contractors.

The S660 was their finest hour. But they took the wrong approach against IR35.

[Scoobos]

I've enjoyed the other fringe benefits of PCG membership for a few years now, but I do back the sentiment that last year they became a bit of an embarrassment and deserved a vote of no confidence.

trying to make out, following failure, that attempting to sort out IR35 wasn't their primary objective.

Course it was, and they failed, at least admit to that, and gain credibility for the other things they do (which IMHO are "on the side" with IR35 being the primary concern)