IR35 Buddy - worth a closer look, maybe

[Qdos Contractor]

What about the 'buddy' concept - it looks as though totally artificial arrangements will be created purely to avoid IR35 e.g. 'advertising buddy' - there will be no actual spend on advertising as the contractor will just update their profile on the site occasionally - I can't see how HMRC would accept 'time spent' as equating to actual expenditure

It is stated on the site in a few places that the aim is certainly not about avoidance of tax/IR35, but in fact to offer assistance in demonstrating that you are outside of IR35.

Clearly anybody wishing to appear outside of IR35 when they should be 'caught' has access to the same tools. However it is our belief that they are only fooling themselves, would do it anyway and this would be obvious in the event of an enquiry.

HMRC were kept fully informed about the detail of the site and the various 'buddies', their opinion being that any investigation would look at the practices and circumstances overall.

[Craig at Nixon Williams]

It is stated on the site in a few places that the aim is certainly not about avoidance of tax/IR35, but in fact to offer assistance in demonstrating that you are outside of IR35.

Clearly anybody wishing to appear outside of IR35 when they should be 'caught' has access to the same tools. However it is our belief that they are only fooling themselves, would do it anyway and this would be obvious in the event of an enquiry.

HMRC were kept fully informed about the detail of the site and the various 'buddies', their opinion being that any investigation would look at the practices and circumstances overall.

Surely if you are outside IR35, you will be able to prove this by letting HMRC examine your contract and working practices?

Ready Mixed Concrete established that Personal Service, Control and MOO are the components of an employment contract and if one is absent then it is self-employment. Having and office or an advert isn't going to affect any of these factors - they will simply help you score points on the Business Entity Tests which are meaningless in the determination of IR35...

Craig

[Qdos Contractor]

Surely if you are outside IR35, you will be able to prove this by letting HMRC examine your contract and working practices?

Ready Mixed Concrete established that Personal Service, Control and MOO are the components of an employment contract and if one is absent then it is self-employment. Having and office or an advert isn't going to affect any of these factors - they will simply help you score points on the Business Entity Tests which are meaningless in the determination of IR35...

Craig

Yes, and the contract and actual working practices are fully reviewed as part of the 'passport' process (which is the part we are involved in). The site isn't based solely on the BET.

Whilst the BET itself won't determine a contractor's IR35 status, HMRC do clearly take it very seriously and have stated that if someone proves that they are 'low risk', the enquiry will be closed down. The aim of IR35 Buddy is to give you the tools to prove it.

[LisaContractorUmbrella]

There's plenty of boilerplate on the website which needs correcting / removing / updating, eg. all the "promotions" for accountants just go to a blank page and have a "Your Promotion Goes Here" kind of text hovering over the image.

That would make sense then if its a new venture

[LisaContractorUmbrella]

It is stated on the site in a few places that the aim is certainly not about avoidance of tax/IR35, but in fact to offer assistance in demonstrating that you are outside of IR35.

Clearly anybody wishing to appear outside of IR35 when they should be 'caught' has access to the same tools. However it is our belief that they are only fooling themselves, would do it anyway and this would be obvious in the event of an enquiry.

HMRC were kept fully informed about the detail of the site and the various 'buddies', their opinion being that any investigation would look at the practices and circumstances overall.

Yes but the site seems to be leading people to believe that if they sign up to the 'buddy' arrangements they will gain enough points to pass an IR35 test according to the BET's but what's being offered is wholly artificial and would appear to serve no other purpose other than give a contractor the appearance of being outside IR35 - HMRC's comment confirms that - the 'buddy' arrangement is irrelevant if working practices put the contractor inside.

The site also states that the 'buddies' will gain you points in the BET's

This about sums it up: "Your first six Buddies assist you with compliance, starting with a self-assessment of your current score on the BET with Business Entity Test Buddy. If your score is in the high risk category, but you are in fact genuinely self-employed, it may be that your contract documentation and working practices need to be modified to demonstrate your status in the event of an HMRC investigation. Four buddies enable you to do this. "

[malvolio]

Been half expecting someone to try this one on ever since the BETs came out. Shame it has absolutely no bearing at all on IR35, only whether or not you might be a preferential target for an investigation. Setting up clearly artificial avoidance measures such as buddying is only going to move you up the list of potentials, not down it.

Heigh ho..

[IR35Buddy]

Afternoon all

Thanks very much for your interest in IR35Buddy – we expected there to be some debate around exactly the topics that are being discussed here, and believe it or not we had the same debates ourselves when we were creating some of the buddies.

The very last thing that we want to promote is tax avoidance, or any misunderstanding that the buddies have been created to offer contrived solutions.

Each buddy has been developed to assist the genuinely self employed actually evidence that status to HMRC, when they are demonstrating why they believe themselves to be at a particular score.

[Clare@InTouch]

Afternoon all

Thanks very much for your interest in IR35Buddy – we expected there to be some debate around exactly the topics that are being discussed here, and believe it or not we had the same debates ourselves when we were creating some of the buddies.

The very last thing that we want to promote is tax avoidance, or any misunderstanding that the buddies have been created to offer contrived solutions.

Each buddy has been developed to assist the genuinely self employed actually evidence that status to HMRC, when they are demonstrating why they believe themselves to be at a particular score.

This isn't meant to provoke an argument, I'm genuinely curious as to the rationale behind the advice you give - but are you not just perpetuating the general misunderstanding about what really matters for IR35, legally, when you're implying that the Business Entity Tests are an indicative factor for employment status?

[GB9]

Yes, and the contract and actual working practices are fully reviewed as part of the 'passport' process (which is the part we are involved in). The site isn't based solely on the BET.

Whilst the BET itself won't determine a contractor's IR35 status, HMRC do clearly take it very seriously and have stated that if someone proves that they are 'low risk', the enquiry will be closed down. The aim of IR35 Buddy is to give you the tools to prove it.

Well, I wasn't going to bite, but now I am.

Why on earth are QDOS wasting time and effort on such total complete drivel? As others have said, it appears a rather shallow attempt in the first instance to get a higher BET score. And as they have also said, getting a higher score by getting an office buddy or whatever it is called will just be laughed at by HMRC.

Honestly, its nearly enough to make me ditch the policies I have with you and join the PCG, and that's something I have always sworn would never happen.

Do you care that you have really pissed off one of your clientele?

[jamesbrown]

This isn't meant to provoke an argument, I'm genuinely curious as to the rationale behind the advice you give - but are you not just perpetuating the general misunderstanding about what really matters for IR35, legally, when you're implying that the Business Entity Tests are an indicative factor for employment status?

I'd say so. Reviews of contracts and working practices are well-established, and I don't so what this offers beyond that (other than slightly more muddy water). The BETs are totally incidental. If the main argument is that this would somehow reduce the risk of investigation or stop it more quickly, rather than clarify status, I think that's pretty speculative based on what we (don't) know about the use of indicators. The concept of a resource is fine, but there are other resources already available (that are not profit-oriented).