New IR35 Guidance hot off the presses

[LisaContractorUmbrella]

I think that this document has been published to save HMR&C time and money. If you read through the introduction what they are basically saying is that they will write to you to ask you whether you have 'thought about IR35'. They will then ask if, in your opinion, you are inside or outside IR35; if you say outside you will then have to prove it - so rather than them investigating your business through an inspection which takes time and money, you will have to provide documentary evidence to support your position. The revised tests and examples would be likely to be used in the event of a court case so that HMR&C could say that their position was made quite clear and that contractor had every opportunity to take their test which would have shown him that he was inside IR35 but he chose to work outside which is a clear case of avoidance milud. They are then in a better position to demand more in the way of interest, penalties etc etc.

Just MHO but seems to be the way that they have been going over the last few years

[malvolio]

I assume that "can finish a job early and still get paid the same" is a long winded way of describing fixed price work. I've done 2 small bits of fixed price work in the last 18 months. I don't see how that affects my IR35 risk on my main contract though.

Read it carefully. You cannot prove that you have been efficient and saved money by completing fixed price work, only by completing an effort-based deliverable early. Since fixed price work doesn't actually have a set amount of effort defined, only a delivery date, how do you measure efficiencies?

Equally, if I complete my 90 day (or 720 hours) gig by working an average of 7 hours a day, clocking up a total of 630 hours and still being paid the same, am I demonstrating efficiency?

Crock of beans, the whole thing.

[administrator]

I think that this document has been published to save HMR&C time and money. If you read through the introduction what they are basically saying is that they will write to you to ask you whether you have 'thought about IR35'. They will then ask if, in your opinion, you are inside or outside IR35; if you say outside you will then have to prove it - so rather than them investigating your business through an inspection which takes time and money, you will have to provide documentary evidence to support your position. The revised tests and examples would be likely to be used in the event of a court case so that HMR&C could say that their position was made quite clear and that contractor had every opportunity to take their test which would have shown him that he was inside IR35 but he chose to work outside which is a clear case of avoidance milud. They are then in a better position to demand more in the way of interest, penalties etc etc.

Just MHO but seems to be the way that they have been going over the last few years

Scary scenario

[Buzby]

I think that this document has been published to save HMR&C time and money. If you read through the introduction what they are basically saying is that they will write to you to ask you whether you have 'thought about IR35'. They will then ask if, in your opinion, you are inside or outside IR35; if you say outside you will then have to prove it - so rather than them investigating your business through an inspection which takes time and money, you will have to provide documentary evidence to support your position. The revised tests and examples would be likely to be used in the event of a court case so that HMR&C could say that their position was made quite clear and that contractor had every opportunity to take their test which would have shown him that he was inside IR35 but he chose to work outside which is a clear case of avoidance milud. They are then in a better position to demand more in the way of interest, penalties etc etc.

Just MHO but seems to be the way that they have been going over the last few years

completely agree, after what the Tories said in opposition I was hoping for something more concrete than this. but maybe that is the problem, this is HMRC who have published this and they don't like things to be black or white.

I think if you have no job protection, no sick pay, no company pension then you are outside IR35.

[rawly]

I was susprised, quickly adding up in my head my score, that I only got into the Teens!

The Point scoring seems very low for certain things, take Indemnity Insurance just 2 points! And it costs a fortune LOL! (Well almost a Days Rate anyway ;-O )

But I did see a nice Point Earner, simply naming 1 or 2 people as Substitutes. Interesting. I definately know a number of people I could exchange names with who have my skillset, and I could legitimately name and propel me into the Low Risk quite easily

[dynamicsaxcontractor]

I was susprised, quickly adding up in my head my score, that I only got into the Teens!

The Point scoring seems very low for certain things, take Indemnity Insurance just 2 points! And it costs a fortune LOL! (Well almost a Days Rate anyway ;-O )

But I did see a nice Point Earner, simply naming 1 or 2 people as Substitutes. Interesting. I definately know a number of people I could exchange names with who have my skillset, and I could legitimately name and propel me into the Low Risk quite easily

I was thinking of that as well, but why would I name my competition to the agent/client? I call upon them if I need to, not for the agent to call them to replace me......

[rawly]

I was thinking of that as well, but why would I name my competition to the agent/client? I call upon them if I need to, not for the agent to call them to replace me......

Well, if you also read on page 35 the example of "Hamish" - he named a substiute, and even though that named person was never used, the contract was 'clearly' outside IR35 because of this.

If the contract also states the use of the named sustitute is still by mutual agreement by all parties, you would still have a veto and so would the end client? So I don't see how he could actually do the work unless you approved it. Remember to pass this test you would also have to pay the substitute directly from your Ltd Company. So you have alot of control over this I'd have thought.

Now, would agencies be willing to complicate their contracts by adding other named people?

[dynamicsaxcontractor]

Well, if you also read on page 35 the example of "Hamish" - he named a substiute, and even though that named person was never used, the contract was 'clearly' outside IR35 because of this.

If the contract also states the use of the named sustitute is still by mutual agreement by all parties, you would still have a veto and so would the end client? So I don't see how he could actually do the work unless you approved it. Remember to pass this test you would also have to pay the substitute directly from your Ltd Company. So you have alot of control over this I'd have thought.

Now, would agencies be willing to complicate their contracts by adding other named people?

If you were to name a sub in the contract, how would you make sure the agent dont contact your sub direct? I cant see agents happy with a clause that stops them from contacting and using your sub for the specified project or other ones?

[rawly]

If you were to name a sub in the contract, how would you make sure the agent dont contact your sub direct? I cant see agents happy with a clause that stops them from contacting and using your sub for the specified project or other ones?

Obviously the scenerio I am suggesting is a mutual agreement between too fellow businesses. So, when I say there are a number of people I know of with my skillset, it would be beneficial to both our parties to act as named substitutes for each other.

Well, in my industry anyway we are very friendly. I am not suggesting you do this with a known advesary who is out to grab your work from you! LOL!

Anyhow, just a thought!

[scooby]

If you were to name a sub in the contract, how would you make sure the agent dont contact your sub direct? I cant see agents happy with a clause that stops them from contacting and using your sub for the specified project or other ones?

This is my earlier point... Culture needs to change and Agencies need us and therefore need to change to help us...