New PCG IR35 Questionnaire

[northernladuk]

I agree. IR35 does achieve its objective by acting as a detterant. Many people will err on the side of caution and assume they are inside IR35 even if not. That is why umbrella companies do such good business.

I beg to differ. I believe many contractors try and tick the boxes in their contracts and then sit happy thinking they are outside hence this whole carry on. That is why companies that offer IR35 insurance do such good business. If HMRC thought that most are err'ing on the side of caution they wouldn't be so aggressive in this area.

[JohnDoe]

An excellent point. The real deal is with the people that are not savvy enough or care enough to join the PCG. Using PCG numbers is like preaching to the converted.



Another good point but the whole idea is to try and lean on the 1 man companies who HMRC don't believe are a business in their own right. My gripe here is that even 'proper' business's don't have plans. Granted it is more likely these companies can go under but even when there is a plan in place it doesn't meant the company is being run properly. I am sure the scoring plan will take this in to account though as it isn't the be all and end all.

What percentage of Ltd Company contractors do you think are not even aware of IR35, let alone insured against it? I used to work with some contractors who were "running" their Ltd Companies through a very large non-chartered accountants who did everything for them (including paying their dividends+salary and overseeing their bank accounts). These guys were not in charge of their companies in any way and had no knowledge of things like dividend paperwork etc. They just left it all to their accountants to do. They only got control of their bank accounts after the MSC legislation came in.

[northernladuk]

What percentage of Ltd Company contractors do you think are not even aware of IR35, let alone insured against it? I used to work with some contractors who were "running" their Ltd Companies through a very large non-chartered accountants who did everything for them (including paying their dividends+salary and overseeing their bank accounts). These guys were not in charge of their companies in any way and had no knowledge of things like dividend paperwork etc. They just left it all to their accountants to do. They only got control of their bank accounts after the MSC legislation came in.

I am sure a large majority are aware. You cannot really get away from it. Even the large accountants have to ask the question of the contractor to understand how to do their books. Understanding it and applying it is a completely different story though. Some of the comments I get from the guys here makes my toes curl. How many apply and understand it compared to how many tick the boxes thinking everything ok is the real test.

Do these people understand that they are ultimately responsible is also another good question. They have to sign it off before submission so cannot palm responsibility on the accoutants. Another point for the 'are you running a business' test.

[Kate Cottrell]

Mal same questions

I'm only working with published numbers. PCG aren't the only ones defending IR35 cases, after all, inclusing, I suspect, more than a few who don't have representation. I'm more than happy to go away and see if I can get some better figures, if they are available.

The 10 cases won is your figure, not mine, being the losses at tribunal/specials appeals stage. And we really shouldn't take into account people paying IR35 out of fear or uncertainty of horribly imprecise, subjective legislation, nor those using umbrella companies who have other reasons than IR35 for doing so.

What I do agree with is let's see what comes out of the next year's results and then we can have a reasoned argument. Right now it's all supposition, on both sides.

And as an aside, £11m total income from a measure supposed to produce £900m a year isn't really a good success indicator, is it?

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

[malvolio]

Scaremongering? It's not me threatening "lots more investigations". I thought the idea was "more focussed investigations into high-probability cases". Heigh ho...

I've been very clear that the PCG set are an internal survey, and that the questions will appear on the HMRC website for everyone to have a go at. And I'm trying hard to agree with you that we need a statistically significant sample before we draw any conclusions on both the relevance of the questions to the real world and the scoring system used to evaluate the answers. And I'm betting an awful lof of umbrella users won't take any notice since they are employed and have no concerns over IR35 anyway.

Incidentally, who was is said "[we] have been working and winning status and IR35 cases for many years. We have never lost a case!"

[Kate Cottrell]

Scaremongering? It's not me threatening "lots more investigations". I thought the idea was "more focussed investigations into high-probability cases". Heigh ho...

I've been very clear that the PCG set are an internal survey, and that the questions will appear on the HMRC website for everyone to have a go at. And I'm trying hard to agree with you that we need a statistically significant sample before we draw any conclusions on both the relevance of the questions to the real world and the scoring system used to evaluate the answers. And I'm betting an awful lof of umbrella users won't take any notice since they are employed and have no concerns over IR35 anyway.

Incidentally, who was is said "[we] have been working and winning status and IR35 cases for many years. We have never lost a case!"

I wonder why you will not answer my questions? I and no doubt others will just have to guess why. This seems to happen every time I have asked you anything over the years!

Your quote is of course from the Bauer and Cottrell web site and still holds good thank you. We have never lost and more importantly never settled for a bean. We were also very pleased to discover, following the FOI request on the number of investigation cases from PCG, the very significant share of the investigation market we have held!

As for scaremongering, the new IR35 investigation cases and the new IR35 administration/guidance etc is what you wanted and campaigned for! With 12 IR35 cases in 2009 and 23 in 2010 there are many people who were quite happy with IR35 as it was. Maybe thats a question for you for another day.

Kate Cottrell

[malvolio]

I wonder why you will not answer my questions? I and no doubt others will just have to guess why. This seems to happen every time I have asked you anything over the years!

Your quote is of course from the Bauer and Cottrell web site and still holds good thank you. We have never lost and more importantly never settled for a bean. We were also very pleased to discover, following the FOI request on the number of investigation cases from PCG, the very significant share of the investigation market we have held!

As for scaremongering, the new IR35 investigation cases and the new IR35 administration/guidance etc is what you wanted and campaigned for! With 12 IR35 cases in 2009 and 23 in 2010 there are many people who were quite happy with IR35 as it was. Maybe thats a question for you for another day.

Kate Cottrell

You're confusing me with the PCG. I'm just a member, I don't speak for them, nor have I campaigned for anything (other than the repeal of IR35, just like all the other members). But AFAIK PCG have not given up looking to get IR35 repealed, they are merely being pragmatic and reflecting the current situation that none of the major political parties are supporting that repeal. It is still a bad and unworkable law and should be removed.

I'll answer the statistical questions when I've had time to do the research.

As for umbrella users, how many are using them because they don't know if they're in or out of IR35? Every time I've challenged an umbrella user that they're hiding from the risk of IR35 over the years, an awful lot come back with "I can't be bothered with a company" or "it's just easier" or "I don't earn enough to make a Ltd Co worthwhile". You cannot use them as a measure of IR35 compliance, merely, if anything, of IR35 uncertainty.

[Epiphone]

I'm just a member, I don't speak for them

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.

[Kate Cottrell]

You're confusing me with the PCG. I'm just a member, I don't speak for them, nor have I campaigned for anything (other than the repeal of IR35, just like all the other members). But AFAIK PCG have not given up looking to get IR35 repealed, they are merely being pragmatic and reflecting the current situation that none of the major political parties are supporting that repeal. It is still a bad and unworkable law and should be removed.

I'll answer the statistical questions when I've had time to do the research.

As for umbrella users, how many are using them because they don't know if they're in or out of IR35? Every time I've challenged an umbrella user that they're hiding from the risk of IR35 over the years, an awful lot come back with "I can't be bothered with a company" or "it's just easier" or "I don't earn enough to make a Ltd Co worthwhile". You cannot use them as a measure of IR35 compliance, merely, if anything, of IR35 uncertainty.

But Mal I think you wrote this!

<Mod snip to remove personal details>

About the author: Malvolio
Mal has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. He also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.
Mal's company dets

Oh and I thought you were/are a member of the PCG CC who, with the board run the PCG. Perhaps you have a brother.

You can call it pragmatic or whatever you like but I repeat you wanted the business tests and not abolition and you seem to have got them but maybe not in the form you were looking for!

Kate Cottrell

[cojak]

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.