Is going limited worth it if you are inside IR35?

[northernladuk]

Sorry, to make this simple.

If you are told to take time off as furlough. Is that an indicator of being inside or outside IR35 as you see it?

Bearing in mind furlough is defined as 'leave of absence' or 'vacation' it doesn't really apply to contractors... Where did this term come from?

Being told not to come in because there is no work is not a furlough. It is a business arrangement where your services are not required for one reason or another. It isn't absence or leave.

You have your terminology wrong. That is where the confusion has arisen.

[Chods]

Eh, didnt Dragonfly lose because of a fettered substitution claus and a control...

[Chods]

Bearing in mind furlough is defined as 'leave of absence' or 'vacation' it doesn't really apply to contractors... Where did this term come from?

Furlough is a term often used by banks to describe this scenario where they are told not to come in. It is applied to contractors. I have seen it happen on multiple occasions. Its a cost cutting exercise.

[northernladuk]

Furlough is a term often used by banks to describe this scenario where they are told not to come in. It is applied to contractors. I have seen it happen on multiple occasions. Its a cost cutting exercise.

They can all it what they want it doesn't matter. Their use is incorrect as you are not being given those things. You don't work you don't get paid. Simple as that. That shows the difference between a permie and a business so guess what pointer that is whatever the client wants to call it.

Forget that stupid term and it is black and white.

EDIT : If, when you get sent off site, you expect to get paid, then there is a problem.

[malvolio]

Sorry, to make this simple.

If you are told to take time off as furlough. Is that an indicator of being inside or outside IR35 as you see it?

I'll make it equally simple. It depends why. It also depends if you get paid or not. And it depends on who makes the decision. consider:

!. Client tells you to go home , you're not needed, but we'll pay you anyway.

2. Client tells you to go home, and we won't pay you.

3. Client asks if you can suspend your sevices for a while and you agree

4. Client has no work and sends you home unpaid

5. Client has no work and sends you home with pay

6. Client has no work so gives you something else to do...

7. You suggest to the client that you won't come in over Christmas

Get the point? It's not a black and white answer, but 3, 4 and 7 are probably OK, the rest, in varying degrees, are not. Assuming you are taken to court. And assuming you don't have a deent contract aligned to your real working practices. And assuming you have professional representation.

Getting bored now.

[LandRover]

Its going to get increasingly difficult for many going forward...

IR35 compliance team created in May 2012 has the capacity to manage well in excess of 1,000 IR35 reviews a year.

Contractors could be facing a huge increase in the number of IR35 reviews handled by HMRC’s IR35 compliance unit, growing from the 230 forecast for the end of the 2012/13 tax year to over a 1,000 in 2013/14.

Contractors may see HMRC IR35 reviews quadruple within a year, warns IR35 expert

[malvolio]

IR35 compliance team created in May 2012 has the capacity to manage well in excess of 1,000 IR35 reviews a year.

Contractors could be facing a huge increase in the number of IR35 reviews handled by HMRC’s IR35 compliance unit, growing from the 230 forecast for the end of the 2012/13 tax year to over a 1,000 in 2013/14.

Contractors may see HMRC IR35 reviews quadruple within a year, warns IR35 expert

So? Don't confuse motion with progress. They still have to prove you are inside.

[centurian]

Furlough is a term often used by banks to describe this scenario where they are told not to come in. It is applied to contractors. I have seen it happen on multiple occasions. Its a cost cutting exercise.

Banks are always a bit of a different animal. Banks do use the term Furlough to describe when they don't want people to come into work - and almost always means unpaid.

What they call it in their own internal documents is not important - it's how it is used.

At one end of the scale, if they say that they want to close the office over Christmas - and permie's and contractors should take the time off, this offers no help on IR35, although it probably doesn't hinder either. This has happened to me on a gig.

At the other end of the scale, if they say "There's nothing more to be done this week - don't bother coming in tomorrow, or getting paid - see you next week", you have IR35 nailed to the cross - previous court judgements have been won on this point, so this isn't just a gut feeling interpretation.

What most bank do - is somewhere in between. They tell you that they do not want you for x days, either a fixed set of dates, or within a short window and this only applies to contractors. This certainly helps with IR35, as it demonstrates there was clearly no obligation to keep finding work and paying you. But it isn't quite the silver bullet in the above paragraph.

However, some banks are now having "leave policies" for contractors saying that contractors must schedule a minimum amount of leave per contract. IMHO, this does not help MOO, because it sets out at the beginning what the expectations and obligations are.

[LisaContractorUmbrella]

So? Don't confuse motion with progress. They still have to prove you are inside.

I don't know Mal - with the introduction of the mandatory IR35 status declaration on the SA form it's going to be more a case of you proving you are outside if that's what you claim

[malvolio]

I don't know Mal - with the introduction of the mandatory IR35 status declaration on the SA form it's going to be more a case of you proving you are outside if that's what you claim

So the conversation will be something along the lines of "According to my working practices and in the light of both case law and this review from a respected professional I'm outside. Now what?". Or are HMRC going to take everyone who says they are outside to court regardless?