New IR35 Guidance hot off the presses

[scooby]

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.

What gets me is, how do you apply a lot of what you said above to a PM (or other roles)? What clients are willing to sit and discuss / create the contract that is fixed price, but allows a review when it gets delayed. If i stuff it up, i expect to put the effort in to get it right, but as a PM its hard to prove it was my fault, especially due to the reliance on client resource (generally).

If the client turns round and asks for a little help on another project, would you be daft enough to say no, or would you use it as a relationship builder?? Substitution i get, in fact my business model is PM consultancy, and Im generally brought for specific skills they have got. A sub can be v hard to find and convince the client they are right for the role.

I think there is a culture change required right across the board. This could hurt agencies as well as us as its obvious that they dont get IR35 and do little to actually help us. they see us as being there to make money from, and they dont care for the positioning or upper and lower contracts matching etc.

For a B2B with no intermediary we need to go direct, clients need to accept this and change their view. Why do they feel ore comfortable with an agency? is this because agencies apparently vet cv's etc? I think given the option EVERY contractor would go direct... Maybe we need agencies that will vet and find candidates, but step away after that (they dont bring anything to the table after this...), leaving it direct business to business. similar to an estate agent who does "let and forget", they charge a fee to find and sign, then thats it for them till the next time...

[BlasterBates]

unfortunately it's the contractor's problem. I mean they don't have to care do they, it's not them who pay the tax.

This is the big problem, and can only be solved easily if demand outstrips supply so that they have to accomodate the contractor.

I think in the end you've got to wait and see how serious HMRC are in following cases up. The positive news is that contractors are border line so they'll obviously prefer to chase up the cut and dried cases.

The biggest defence was and still is the expense of investigating a borderline case, you just need enough defences (insurance, well written contract etc) to persuade any investigator that his time would be better spent elsewhere. Like Gnu's if there's enough of you the chance of being caught is then minimal.

[BlasterBates]

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?

That's not a bad idea. Though I would go on line and tender out a small piece of work, using a freelance portal. This would have several benefits.

1) you would learn how to specify sections of work that could be done cheaply, through a portal.
2) If can't be done cheaply then you learn yourself how to offer through the internet portal and make some money.
3) You become a bonafide business, building expertise up in doing fixed price pieces of work, via offshore companies bidding through an internet portal.

[Fred Bloggs]

I score 5 points, so am high risk. Given that I guess 99% of us are the same, then nothing has changed, we're all targets and HMRC doesn't have the resources to hit us all.

[BlasterBates]

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.

This got me thinking. Related to my above point on subcontracting work. If you're on a professional day, and you notice this needs more time than you've got during the day, as happens often. Then one possibility would be to do some useful work at home on generic problems you're trying to solve at work. That would be a big plus point I reckon. Particularly until it's clear that HMRC aren't taking IR35 as seriously as we're fearing and then you can slip back into the usual disguised employee practices.

[SueEllen]

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?

You need to pay more than that and refuse to pay up.

[d000hg]

If you actually use subs, you must score more than 2, shirley?

I did only skim it, but why do you think that?

[Scoobos]

The most absurd thing I've ever read through.

I mean, I scored 10 points (which is a heavy weighting when you think £300 of PII counts for a 5th of that, with 2 points) - for having to chase bad debt from an Indian employer in the last 12 months.

Seriously? people not paying me is a sign I'm in business? What's HMRC trying to say?

Absolutely nothing in there for do you pay your own sickness, training costs, relocate regularly, or any of the other MASSIVE RISKS I take in order to assist the UK powerhouses to get projects set up efficiently, with no long term commitment to employment.

This just gets my goat, if it wasn't for people like me, british business would be in a far worse position than it actually is.. <snipped out the rest of my rant>

I got over 20 points... but I'll be following mal's lead and just ignoring the whole stupid pea brained mess.

[Mr.Whippy]

The most absurd thing I've ever read through.

I mean, I scored 10 points (which is a heavy weighting when you think 300 of PII counts for a 5th) - for having to chase bad debt from an indian employer in the last 12 months.

Seriously? people not paying me is a sign I'm in business? What's HMRC trying to say?

Absolutely nothing in there for do you pay your own sickness, training costs, relocate regularly, or any of the other MASSIVE RISKS I take in order to assist the UK powerhouses to get projects set up efficiently, with no long term commitment to employment.

Exactly, I miss out on 10 points because I've not had the misfortune of an agent going bust or a client not paying.

I also score 0 points for the near-on £10,000 (not including lost billing time too!) I will have spent by the time my year end comes on various training & certifications to ensure that I'm in a better position to win more business and increase my earnings/turnover etc.

Great.

[Sockpuppet]

What confuses me is the "can finish a job early and still get paid the same".

How does that work for those of us that just adjust the hours to suit. SO this week I've done +20 hours because other people fecked up and I needed to do my bits at anti social times to suit. At other times i take it easy and do less hours after all its not in my interest to do 8 hours when I can do 4 and still do what is required.

Or are they going to focus on the "to finish early means all the risk and fixing must be done at the end of the project, managing the risk on an ongoing basis won't be allowed".