New PCG IR35 Questionnaire

[LisaContractorUmbrella]

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.

Please see above

[JohnDoe]

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?

Well said!

[swamp]

Well said!

For me the real issue is how the Government expects contractors to operate. Everyone should remember that contractors never wanted to incorporate in the first place. Since ~1978 when we were no longer permitted to operate as sole traders, the limited company route became the only viable option. As it turned out this route meant we paid less tax, albeit with much more paperwork and accountancy costs. This is not our fault though, and I'm sure most contractors would be happy to work as Schedule D sole traders once more. (Actually I believe HMRC would prefer our large day rates + VAT were sitting in a traceable Ltd company bank account, even if it meant less tax take.)

IR35 was an attempt to kill contracting stone dead and give the likes of Anderson Consulting a leg-up. It didn't work because of the inept implementation of IR35 and we earned a 10 year reprieve. Now the Conservatives, who always seemed on our side, seem likely to hammer the final nail in the coffin and destroy contracting.

Now I wish we could stop all this guff about being 'in business' or not. None of us are 'in business' any more than the man in the street is 'in business', but none of us are employees of our clients either. We are contractors. Give us a fair structure to operate under. That is all we have ever asked for.

PAYE + employers' NI or Ltd + IR35 is not a fair structure. They do not remotely reflect the risks and rewards that contracting involves. Implement IR35 2.0 by all means if it stops executive tax dodgers or public sector pay band restrictions, but give us contractors a reasonable alternative.

Meanwhile public sector clients, government departments and large companies, many of whom are heavy users of contractors, can look forward to paying CAP and Logica et al £2,000 per person per day when they want to get a job done. And they will have no guarantee that they will get anyone any good.

[scooby]

ongoing mumblings... IR35 Business Tests Proving Testing - Contractor Weekly

[Bagpuss]

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.

To be fair the details are on the PCG website under consultative council, which is freely available to the public.

[maxima]

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?

completely agree. I was trying to raise the similar points for years here but was always rebuffed by Malvolio pointing effectively that if you are not a 'genuine' business than you have to pay IR35. Although I believe that there are bunch of people who are not that kind of business but still are entitled to get adequate tax relief (adequate to the effort and risk).

You may want to call us entrepreneurs or whatever but we must not be taxed as the permies lot.

Unfortunately in the crucial moment when we could have a chance the people who more agreeing with HMRC point of view (ie tax whatever you can take) stood up and helped the taxman to turn the wheel.

And now we can go and

[maxima]

Now I wish we could stop all this guff about being 'in business' or not. None of us are 'in business' any more than the man in the street is 'in business', but none of us are employees of our clients either. We are contractors. Give us a fair structure to operate under. That is all we have ever asked for.

precisely!!!

[bobspud]

completely agree. I was trying to raise the similar points for years here but was always rebuffed by Malvolio pointing effectively that if you are not a 'genuine' business than you have to pay IR35. Although I believe that there are bunch of people who are not that kind of business but still are entitled to get adequate tax relief (adequate to the effort and risk).

You may want to call us entrepreneurs or whatever but we must not be taxed as the permies lot.

Unfortunately in the crucial moment when we could have a chance the people who more agreeing with HMRC point of view (ie tax whatever you can take) stood up and helped the taxman to turn the wheel.

And now we can go and

To be fair Mal came back to me privately and explained his view. I never heard anything out of Kate though...

Maybe she was too busy counting her thirty pieces of silver ...

[Kate Cottrell]

To be fair Mal came back to me privately and explained his view. I never heard anything out of Kate though...

Maybe she was too busy counting her thirty pieces of silver ...

Sorry Bobspud. I am happy to reply publicly but do wonder what you have been told privately. Maybe Mal will tell us.

My personal view is that the calls for the abolition of IR35 or later calls for the use of business entity tests (previously rejected by the OTS and the Government) has resulted in little help for the average Freelance Contractor. Indeed with the previously extremely low levels of IR35 investigations some would consider the situation now to be far worse. The fact remains that the IR35 legislation has not changed so there is still a need to consider your IR35 status on a contract by contract basis. What has changed is that for those taking the business tests and scoring (and proving) to be low risk means that HMRC will close the review as soon as possible. Guidance and HMRC assistance will be improved and we should see an end to investigations going on for many years.

HMRC were tasked with improving the administration of IR35 and measuring the results of this new approach. As has always been obvious to many they can only do this by opening lots of new investigations which will be run by new specialist HMRC IR35 teams. The business tests were not HMRC's idea and are a small part of the whole process. My view has always been that as the IR35 legislation has not changed this has never been an opportunity to change IR35 and it would be naive to think otherwise. Others disagree.

Kate

[TheFaQQer]

HMRC were tasked with improving the administration of IR35 and measuring the results of this new approach.

As someone who makes their living fighting IR35 cases, is there something not quite right about asking you what should change with the system?

Do you not have a vested interested in keeping IR35 as confusing as possible, so that those that are investigated end up paying for your services?

Just asking like.