IR35 Buddy - worth a closer look, maybe

[Craig at Nixon Williams]

I think that sometimes people give HMRC too much credit. I imagine the yes/no BETs are as much to make life simple for their staff as it is for the contractors. Tick their boxes and they'll toddle off and annoy someone else.

The people that carry out IR35 enquiries (and the likes of) appear to receive far better training (or know much more) than those that you speak to when you call the VAT helpline...

[Maslins]

Really????

Yes. If you think all HMRC staff are highly intelligent, well educated/trained individuals, I'm guessing you've never had to phone them up.

Most don't know their arse from their elbow, work from scripts with a "computer says no" mentality.

Ok so those challenging cases will be above standard call centre staff...but they'll still have set criteria (ie the BETs in this case) to work from, with yes/no boxes to help them get to their end answer.

I'm not recommending lying, I'm just saying (broken record I know) they work from tick boxes, they've told you what their tick boxes are, so tick their boxes!

[Maslins]

Until someone comes up with a contrived solution to manipulate the tick boxes in which case they have to investigate the affected areas in a little more detail.

Possibly. Out of interest, how do you feel this compares to cheap liquidations as a contrived solution to the changes to ESC C16? Tax benefits are realistically the only reason someone with >£25k cash and no creditors would go through a liquidation rather than a strike off.

That's manipulating the tick boxes, and when we set up MVLO we were very aware that if HMRC's rule changes didn't lead to the results they wanted, they'll likely change the rules again...but it may well be a good few years before they do.

HMRC set the rules, people tweak what they do to fit the rules (in this case the "buddies"). If HMRC don't like it, they can change the rules again...but in the meantime, what's the problem.

[TheFaQQer]

Yes. If you think all HMRC staff are highly intelligent, well educated/trained individuals, I'm guessing you've never had to phone them up.

Most don't know their arse from their elbow, work from scripts with a "computer says no" mentality.

Ok so those challenging cases will be above standard call centre staff...but they'll still have set criteria (ie the BETs in this case) to work from, with yes/no boxes to help them get to their end answer.

I'm not recommending lying, I'm just saying (broken record I know) they work from tick boxes, they've told you what their tick boxes are, so tick their boxes!

And if you think that those working in IR35 investigations are likely to walk away because you have an artificial arrangement which has a superficial appearance of being able to tick a few boxes, then that smacks of naivety.

There are three criteria to determine whether the contract falls inside IR35, which can bottle down to tick boxes - yet as anyone who has been through an IR35 investigation will tell you, that's not quite how it works in reality.

[v8gaz]

In the same way that HMRC would like to get the membership list from the PCG, joining IR35 Buddy seems crazy. What safeguards are in place / what is the legal situation to prevent HMRC easily getting hold of the membership list and looking at each one??

I do hope you're not suggesting that HMRC are ever going to get hold of PCG's membership data? Because that's just not going to happen - ever!

[LisaContractorUmbrella]

Yes. If you think all HMRC staff are highly intelligent, well educated/trained individuals, I'm guessing you've never had to phone them up.

Most don't know their arse from their elbow, work from scripts with a "computer says no" mentality.

Ok so those challenging cases will be above standard call centre staff...but they'll still have set criteria (ie the BETs in this case) to work from, with yes/no boxes to help them get to their end answer.

I'm not recommending lying, I'm just saying (broken record I know) they work from tick boxes, they've told you what their tick boxes are, so tick their boxes!

Actually we deal with the parts of HMRC that specialise in this industry and they are far from stupid and far more ahead of the game than you seem to think

[LisaContractorUmbrella]

HMRC set the rules, people tweak what they do to fit the rules (in this case the "buddies"). If HMRC don't like it, they can change the rules again...but in the meantime, what's the problem.

The problem is that the site will encourage new and naive contractors to take the tax benefits of working outside IR35 when the reality is that they should be declaring their income through PAYE - it claims to offer a form of protection which simply isn't there. It's all very well saying that it's all HMRC's fault but this will impact on contractors who believe that some 'buddies' will save them in an IR35 investigation which they won't. The site is totally misleading.

[TheFaQQer]

I do hope you're not suggesting that HMRC are ever going to get hold of PCG's membership data? Because that's just not going to happen - ever!

No - they would LIKE to, I'm sure.

[TheFaQQer]

The problem is that the site will encourage new and naive contractors to take the tax benefits of working outside IR35 when the reality is that they should be declaring their income through PAYE - it claims to offer a form of protection which simply isn't there. It's all very well saying that it's all HMRC's fault but this will impact on contractors who believe that some 'buddies' will save them in an IR35 investigation which they won't. The site is totally misleading.

If it's just careless, at least the penalties will only be 30%.

Unless HMRC want to push for much stronger penalties because they argue that it was a deliberate attempt to conceal.

[Maslins]

The problem is that the site will encourage new and naive contractors to take the tax benefits of working outside IR35 when the reality is that they should be declaring their income through PAYE - it claims to offer a form of protection which simply isn't there. It's all very well saying that it's all HMRC's fault but this will impact on contractors who believe that some 'buddies' will save them in an IR35 investigation which they won't. The site is totally misleading.

So situation we're presumably discussing is:
- HMRC provide tickbox BETs stating if you're low risk they'll close the case.
- naive contractor uses IR35 buddy to help them tick sufficient boxes to become low risk.
- HMRC then say "Hmmm...we don't like the way you've ticked them, so we're going to ignore our own guidance".

I personally don't see that happening, but unless I've misunderstood, everyone bar me is saying that's what they think would happen?

If HMRC did that, I'd love to hear the justification for going against their own attempt at "simplification" of the muddy waters that is IR35.