IR 35 Contractor vs Permie Vs Business

[martinluther]

I am really confused what does the HMRC want to prove?

Does it want to prove that someone is Permie disguising as a contractor or is it trying to prove someone is Temp/Permie posing as contractor. I have been contracting for over 15 years and have not quite understood this. Temp is more or less same thing as contracting? Or Temp is Employment and Contracting is Business.

One more thing I cant understand if a contractor is not protected by employment rights, how can then HMRC turnaround and claim otherwise.

WTF....it seems so complicated. Reading through the case law, apparently you can still be IR35 in, even if you employ 50 people (that is kind of ridiculous for HMRC to claim in its case study).

It it just me drunk on Friday evening or IR35 is still that same pile of ......

[adubya]

This is why IT35 is a crock.

[northernladuk]

You seriously need to try get it.. It's not hard. 15 years ago it was pretty black and white and the days of proper contracting but times have changed and you have to change with it else you will be up to your neck. It isn't just how you handle yourself it is the change in how the clients perceive you that you have to keep on top of. Many clients just see it is the normal way to resource now so you better learn what it is about quick to keep yourself out of it.

I can't even begin to explain all that.....

[northernladuk]

I am really confused what does the HMRC want to prove?

That you are not masquerading as a contractor to get access to the tax advantages when really you are a permie and should be taxed as one. They are after their tax money.

Does it want to prove that someone is Permie disguising as a contractor or is it trying to prove someone is Temp/Permie posing as contractor. I have been contracting for over 15 years and have not quite understood this. Temp is more or less same thing as contracting? Or Temp is Employment and Contracting is Business.

I don't know where to start with this one Forget temps.. try not to compare that. Different kettle of fish and you will complicate matters. They are trying to find out if you are a permie that is pretending to be a proper business and avoid tax. Your last sentence sums it up.

One more thing I cant understand if a contractor is not protected by employment rights, how can then HMRC turnaround and claim otherwise.

Because your working practices may deem it so. So many people come on here and want to change the way they are paid from permie to LTD because they get to keep more but keep doing the same job. If we all did that HMRC would lose a packet. So there job is to prove you are a permie.

WTF....it seems so complicated. Reading through the case law, apparently you can still be IR35 in, even if you employ 50 people (that is kind of ridiculous for HMRC to claim in its case study).

That is a bit of a throwaway statement. There must be reasons. It is on a contract by contract basis. I don't know the case in question but if theoretically you could run a business of 50 people but then personally take a contract on where you act and are treated like a permie, so should be paid as a permie. Devil is in the details.

It it just me drunk on Friday evening or IR35 is still that same pile of ......

It's you that is drunk. How can you call something a pile of... when you don't have a grasp of the reason it exists let alone the complexities of it.

[northernladuk]

But this is yet another sockie isn't it.

[Malcolm Buggeridge]

But this is yet another sockie isn't it.

Hi BP

You willun!

[nomadd]

I can't even begin to explain all that.....

You seriously need to try get it.. It's not hard. 15 years ago it was pretty black and white and the days of proper contracting but times have changed and you have to change with it else you will be up to your neck. It isn't just how you handle yourself it is the change in how the clients perceive you that you have to keep on top of. Many clients just see it is the normal way to resource now so you better learn what it is about quick to keep yourself out of it.

That you are not masquerading as a contractor to get access to the tax advantages when really you are a permie and should be taxed as one. They are after their tax money.



I don't know where to start with this one Forget temps.. try not to compare that. Different kettle of fish and you will complicate matters. They are trying to find out if you are a permie that is pretending to be a proper business and avoid tax. Your last sentence sums it up.



Because your working practices may deem it so. So many people come on here and want to change the way they are paid from permie to LTD because they get to keep more but keep doing the same job. If we all did that HMRC would lose a packet. So there job is to prove you are a permie.



That is a bit of a throwaway statement. There must be reasons. It is on a contract by contract basis. I don't know the case in question but if theoretically you could run a business of 50 people but then personally take a contract on where you act and are treated like a permie, so should be paid as a permie. Devil is in the details.



It's you that is drunk. How can you call something a pile of... when you don't have a grasp of the reason it exists let alone the complexities of it.

But this is yet another sockie isn't it.

Yes, I think it is.

Still, 10/10 for effort.

[northernladuk]

Yes, I think it is.

Still, 10/10 for effort.

I know... I couldn't resist and realised halfway though but in for a penny in for a pound hey.

[nomadd]

I know... I couldn't resist and realised halfway though but in for a penny in for a pound hey.

We wouldn't have you any other way.

[martinluther]

They are after their tax money.

I don't know the case in question but if theoretically you could run a business of 50 people but then personally take a contract on where you act and are treated like a permie, so should be paid as a permie. Devil is in the details.

The case is listed in HMRC website. ....... "but if theoretically" is exactly that, all theory devoid of any truth in practical world.

Also this "contract to contract basis" is almost completely contradicted by the business entity test, as most of the tests listed in it ( The ones that make a business low risk) can only be assessed over multiple contract. I think this business entity test is probably more correct reflection of a true business but they should remove this contract specific tests such as "Substitution clause", but rather rely more on actual effort to run and grow the businesses. What muddies the water is the case studies and the case histories.

On the whole NLUK, I think the problem seem to be that of failure of HMRC to recognise the third reality, existence of a freelancer, which is not fully a proper business nor an employee. Hence this confusion. Having explored some German / European opportunities I think atleast Germans have a separate category.

Maybe HMRC has been too busy with the lobby groups which like Turkeys cant be voting for Christmas, hence we now have even more stupid IR35.

My views.