New IR35 Guidance hot off the presses

[apjr1970]

Hi.
I'm increasingly worried by IR35 and all the political and media attention being paid towards high profile figures who "dodge tax". The recent Business Entity test is, in my opinion, but a step on a convoluted road making life more difficult for freelancers and the way we work.
I am a PCG Plus Member, have been a member for close to 10 years now and through that receive various insurances. However, given the above I'm trying to check exactly what this does and does not cover. Can anyone tell me how the IR35 and PAYE insurance provided by PCG Plus Membership differs from explicit IR35 insurance from QDOS (or another provider)?

Thanks,
Andy.

[malvolio]

Hi.
I'm increasingly worried by IR35 and all the political and media attention being paid towards high profile figures who "dodge tax". The recent Business Entity test is, in my opinion, but a step on a convoluted road making life more difficult for freelancers and the way we work.
I am a PCG Plus Member, have been a member for close to 10 years now and through that receive various insurances. However, given the above I'm trying to check exactly what this does and does not cover. Can anyone tell me how the IR35 and PAYE insurance provided by PCG Plus Membership differs from explicit IR35 insurance from QDOS (or another provider)?

Thanks,
Andy.

Why not ask the PCG. The office are quite happy to explain what you're paying for. It's also listed on the main website under "join PCG".

However, to answer the question. As a Plus member, if you get a letter from HMRC talking about anything to do with tax investigations, VAT queries or anything else, tell the office, fill out the claim form and you get unconditional professional representation throughout, the idea being to stop it ever getting to an IR35 investigation.

Also, as I keep saying, unlike everyone else in the IR35 arena, PCG aren't a commercial insurance provider and they don't insure you, they insure themselves for the cost of supporting their membership. You also get the other key benefits such as jury service cover, agency default cover and the rest, and perhaps most importantly, a chance to have a say in how freelancers deal with HMG and HMRC at the highest level, which is how they aim to stop life getting more difficult for all freelance contractors.

[scooby]

Why not ask the PCG. The office are quite happy to explain what you're paying for. It's also listed on the main website under "join PCG".

However, to answer the question. As a Plus member, if you get a letter from HMRC talking about anything to do with tax investigations, VAT queries or anything else, tell the office, fill out the claim form and you get unconditional professional representation throughout, the idea being to stop it ever getting to an IR35 investigation.

Also, as I keep saying, unlike everyone else in the IR35 arena, PCG aren't a commercial insurance provider and they don't insure you, they insure themselves for the cost of supporting their membership. You also get the other key benefits such as jury service cover, agency default cover and the rest, and perhaps most importantly, a chance to have a say in how freelancers deal with HMG and HMRC at the highest level, which is how they aim to stop life getting more difficult for all freelance contractors.

WMS. I have both PCG and Qdos TLC35. PCG are there for much more (and having claimed, it v easy and great service), Qdos for my PII & IR35 cover and protection if HMRC win. slightly different products, but if you read the product descriptions, its easy to work out what you get.

[Sockpuppet]

Careful... Kate Cotterel pointed out that they do now generally win their cases. Though statistics show there aren't many cases. That doesn't include the cases that settle before the case gets to court.

The message is they now feel confident that they know who they can knobble. So it's a matter of making sure your defences are in place and note that you are now dealing with an experienced opponent.

If you're floating around on a longterm contract I think you're a prime candidate.

In the past you didn't need to worry too much about being a high risk candidate, because the chances of investigation were low, but now you do.

I presume if you have insurance you probably aren't a high risk candidate anyway.

I've been looking for this post to reply to. I 100% agree with the above. HMRC are winning more cases and I half reckon this is because they are choosing who to target.

Am I immune to HMRCs gaze. No. But given that I last well under ~1 year with most clients for a specific project then move on must make an investigation into me harder than someone who has been at the same place for 4-5 years. In literal terms its 4 times to the work to investigate me for the same reward (assuming all my contracts are inside) as opposed to proving one contract is inside.

[Precept]

IR35 Engagement Rules and Business Entity Tests

The HMRC 47 page guidance document may have attracted a lot of denunciation but it contains enough information to enable a reasoned response. I assume that PCG and other involved parties are already formulating proposals to be considered by the working party dealing with IR35.

A close and intimate view of the sometimes arbitrary elements of IR35 should have allowed the Working Party to seek clarification of its murkier intentions and I look forward to a constructive dialogue that takes this complex taxation issue towards a workable solution.

The HMRC Guidance for its part splits IR35 considerations into two elements: Engagement criteria and Business Entity tests, with Substitution, which was previously regarded as one of the fundamental Entity elements now appearing in the Engagement list with other factors like PII, Efficiency and Assistance.

The Business Tests, to use HMRC's own words "look at a business as a whole to gauge how likely it is that the business has entered into an engagement to which IR35 applies". It is here presumably, that the hitherto fundamental concepts of Mutuality of Purpose and Control reside, ready to be conscripted when conflicts require their additional firepower.

But I wonder how the Working Party are going to view Business Tests that may lack a certain precision in interpretation and more importantly certainty. How long will it be for instance, before Contractors are able to undermine the whole process of IR35by formulating contracts in such a way that they completely nullify the Business Test element. And if that were to happen would it undermine the whole edifice of
IR35.

[v8gaz]

Interesting that Kate clai8ms they win most of their cases, and yet she also claims that her company have never lost a case.

sniff, snifff....

[SueEllen]

Interesting that Kate clai8ms they win most of their cases, and yet she also claims that her company have never lost a case.

sniff, snifff....

Cases that that are settled against advice vs cases that go to court.

Cases that are settled aren't a win on either side regardless of what HMRC try and claim as some people will settle because they can't take the on-going hassle and stress a legal case entails.

[Sockpuppet]

Interesting that Kate clai8ms they win most of their cases, and yet she also claims that her company have never lost a case.

sniff, snifff....

Kate doesn't represent everyone at an IR35 hearing therefore its quite possible that she has never lost a case and HMRC are still winning more cases. Both can be true at the same time, they're not mutually exclusive.

Regardless Kate still knows more about IR35 both past, present and possibly future than anyone else on this board so I have a hard time seeing why people seem to want to give her a hard time. I know CUK is generally a hands off place regarding the rules on having a dig at someone but I guarantee we gain more from Kate posting here than she gains from us.

[malvolio]

Kate doesn't represent everyone at an IR35 hearing therefore its quite possible that she has never lost a case and HMRC are still winning more cases. Both can be true at the same time, they're not mutually exclusive.

No they aren't. However, going by published numbers, they aren't winning more cases, if anything nmore are beling left in limbo. The HMRC wins are at the tribunal level and are roughly 60/40 in favour of HMRC. Not overwhelming, either way.

Regardless Kate still knows more about IR35 both past, present and possibly future than anyone else on this board

I somehow doubt that. Several on here have been with it since the beginning and have studied all the case law

so I have a hard time seeing why people seem to want to give her a hard time. I know CUK is generally a hands off place regarding the rules on having a dig at someone but I guarantee we gain more from Kate posting here than she gains from us.

I don't. YMMV.

However, it's all about opinion. There are plenty of them...

[LisaContractorUmbrella]

I agree with Sockpuppet - I don't recall Kate ever giving advice that was not well thought out and helpful. IR35 is, to a degree, subjective and we all have our opinions and we are all entitled to them so any kind of witch hunt is out of order