New IR35 Guidance hot off the presses

[LisaContractorUmbrella]

There's a press release from the PCG just gone out. Almost all the exernal advisors to the IR35 Forum are making the point, very clearly, that what they developed and what HMRC have launched are not even vaguely similar. If we are going to have tests - a point about which I am utterly unconvinced anyway - we need them to reflect the real world. Many people, including the PCG, spent time and money on expert advice to design a set of tests and associated scoring that provided the necessary clarity. These don't; all that work was simply ignored and we have HMRC's own effort instead.

Luckily, they are voluntary. I suggest everyone simply ignores them. I will.

But why does that come as any surprise Mal? HMR&C are not known for ball playing are they and they are expert goal post movers. At the end of the day these tests shouldn't come as a shock - they are pretty much what we have come to expect from HMR&C point of view

[dynamicsaxcontractor]

Like their scoring, 2 points for stuff they dont mind if you answer yes to do. 35 points for stuff they know most people wont answer yes to.

Its like inventing new games with your mates, if you score you get 1 goal and if I score I get 2....... Its like being a kid again, only difference is that not even I could get the scoring so unfair..... Come on, 35 points for your goals and 2 for mine.....

[bless 'em all]

The "Actual Substitution Test".

Interesting. If you got someone to do a tiny portion of your work, and paid them via your Ltd Co, regardless of whether your end client knew or not you score 20 points.

I need some test data, flat file, 3 fields ... 100 rows for a fiver anyone?

[psychocandy]

Let them. I have insurance and a 1400-to-6 win ratio on my side... IR35 hasn't changed after all, they still have to prove it.

The figures you quote. Is that whilst represented by PCG? Or just everyone?

[BlasterBates]

Reading the examples it's pretty clear that most contractors are borderline, i.e. unless you're working at home on fixed price. The things that would appear to push you over the edge is if you do muck in and generally help out on other tasks in the dept, other than a specific project. Also doesn't help if you can't demonstrate you correct things at your own expense and don't do anything in a home office. They seem to accept that substitution isn't realistic, but it still seems that they expect it in the contract. Even so they classify all that as borderline.

My feeling is that especially as some companies such as banks are pushing for contractors not to stay long that you need to negotiate some kind of deliverables as contractual obligations. In the end any costs such as working for nothing to get something finished off would be worth the savings in tax.

[ASB]

Given a lot of folk are on a "professional day" type basis surely it is but a short step to convert this to a fixed price arrangement with stage payments.

This then also expose the contractor to risk, extra hours/days = no extra pay (but they largely currently have that anyway by the pd approach). It also gives them the opportunity to profit. Short days when ahead - again the largely have this potential reward already.

[psychocandy]

The "Actual Substitution Test".

Interesting. If you got someone to do a tiny portion of your work, and paid them via your Ltd Co, regardless of whether your end client knew or not you score 20 points.

I need some test data, flat file, 3 fields ... 100 rows for a fiver anyone?

I was thinking that. Client needs documentation done. Pay your mate (or at least pretend to) £20 for doing it for you. Could you just get mate to give you an invoice? Or would a paper trail do like a transfer to account?

End client doesn't even need to know and wont care.

[malvolio]

The figures you quote. Is that whilst represented by PCG? Or just everyone?

It 's the ones I know about. I have not seen anything from QDOS for several years, but they seem to do OK. B&C claim never to have lost a case. The real numbers are probably rather better.

[northernladuk]

The fact that certain posters continually come up with these ridiculous 'pay your mate' schemes poves they are not a business IMO

[jamesbrown]

Given a lot of folk are on a "professional day" type basis surely it is but a short step to convert this to a fixed price arrangement with stage payments.

This then also expose the contractor to risk, extra hours/days = no extra pay (but they largely currently have that anyway by the pd approach). It also gives them the opportunity to profit. Short days when ahead - again the largely have this potential reward already.

I'd say the presence of specific deliverables would be a stronger indicator, with payment terms being more neutral.