IR35 Buddy - worth a closer look, maybe

[LisaContractorUmbrella]

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.

But you are not taking a contractors actual position with regard to IR35 and advising them on how to present evidence to HMRC - what you are doing is to say that their chances of being investigated will be reduced by using the 'buddies' as their score in the BET's will be improved. Yet the buddies are wholly contrived and artificial and do nothing to effectively support the 3 main IR35 criteria i.e. MOO, supervision, direction and control and ROS. IMHO this product will encourage new or inexperienced contractors who are inside IR35 to think that, by signing up, they will be able to work outside IR35. I have not investigated thoroughly but I can't find anything on the site that refers to the penalties that will be incurred should an IR35 investigation by HMRC succeed other than in a link to HMRC's site and nothing which explains how the service you offer works within the legislation itself.

[Clare@InTouch]

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).

Agreed. You want to stop an investigation in its tracks, simply prove you can cover one of the Trinity - Control, Lack of Mutuality of Obligation, or Lack of Personal Service. As much as HMRC would like it to be true, you don't need to actually send a substitute in order to pass the last of those (which would be worth 20 points), you just need to be able to (which they only give 2 points!).

[northernladuk]

Just waiting for CW to write an 'article' on someone offering an Office Buddies service now.....

[LisaContractorUmbrella]

Just waiting for CW to write an 'article' on someone offering an Office Buddies service now.....

CW hasn't but CC has

[GB9]

Had an e-mail from QDOS advertising it.....and i'm still fuming.

Hope they didn't spend a lot on it as I would say it is already dead in the water. What a waste.

[northernladuk]

CW hasn't but CC has

I wonder if we are our own worst enemies sometimes......

[LisaContractorUmbrella]

I wonder if we are our own worst enemies sometimes......

What do you mean - the fact that there's always someone in the industry trying to 'get round' something or another??

[northernladuk]

What do you mean - the fact that there's always someone in the industry trying to 'get round' something or another??

Exactly. Those trying to do it properly are constantly under scrutiny because of so many others trying to push the boundaries making us all target. I know an argument will ensue about what is 'doing it properly' as the salary/divis could be argued the same but those that try to be a proper business will know what I mean.

[LisaContractorUmbrella]

Exactly. Those trying to do it properly are constantly under scrutiny because of so many others trying to push the boundaries making us all target. I know an argument will ensue about what is 'doing it properly' as the salary/divis could be argued the same but those that try to be a proper business will know what I mean.

Couldn't agree more - I think this is an utterly ill conceived idea and, as you say, it just paints the target on our backs even bigger. I wonder how long it will be before someone gets a new 'buddy' in the form of an HMRC inspector after relying on this product to put them outside IR35

[Clare@InTouch]

Exactly. Those trying to do it properly are constantly under scrutiny because of so many others trying to push the boundaries making us all target. I know an argument will ensue about what is 'doing it properly' as the salary/divis could be argued the same but those that try to be a proper business will know what I mean.

There's nothing wrong with ensuring your tax affairs are arranged in a way that minimises your tax and takes advantage of all available reliefs, but it does put something of a taint on the industry when you hear stories of people using a limited company as a blatant excuse to avoid tax or take the mickey. We hear it often. My mate puts his dog through the company and his accountant lets him, why don't you?

Thankfully the majority are great and will listen to advice, but as ever there's always those who don't want to play by the rules or think we're being Tax Collectors by not recommending tax evasion.