Every single IT project manager at a bank ever

[vetran]

Yes but if there is precedent around these clauses then they won't take it on face value just because it's there. A cursory question to the client and boom, it falls apart. If sham clauses are the precedent then yes innocent till proven guilty but they will most definitely pick on it for you to prove it.



The agency should be held to account for situations that are proven to be shams. They negotiated the contract, they should be responsible for failings such as sham sub clauses. Sadly it's never happened that I'm aware of. I wonder what would happen if the guy in this case then tries to sue to the agent for misrepresentation.

If its a standard Agency contract and you have not been allowed to modify it then to you its not a sham.


Suing the Agency strikes me as a way forward.

[mallisarealperson]

No disagreement, you are taking a low risk approach and kudos for you for doing so. I also totally agree long time at clients is an IR35 problem and have been shot down many times on here for arguing it.

I just think plonking a 24 month rule isn't strictly correct. Clients have 2 year rules where they get rid of contractors for IR35 reasons and it's wholly and completely wrong. You can have a 6 monther that falls inside and you can have a 6 year gig that is firmly outside. It just gets harder and harder to stay outside with length of time.

I think you are doing totally the right thing. I've left two clients because my IR35 status was in jeapordy, one was a year and a bit and the other was five. just pointing out the limit you put doesn't mean what you think.. but it doesn't matter. If it keeps you safe and you are happy doing it then fill your boots.

Fair enough. One of my questions in interviews (client meeting) was always why do you need a contractor. The number of times they would say "Oh to add to the team"

[LondonManc]

I'm no expert, but I'm guessing to sue you have to prove a loss, and you can't prove a loss when it's a point of law that says you have to pay that money

You're suffering a loss because of their action, which put you against that point of law. They lied in the contract - would you take out a contract if you knew in advance that the contract clauses that keep you outside IR35 were simply lip service to get you into the contract and they had no intention of honouring them?

[Whorty]

I see.

That is why I am not a wealthy early retiree like you lot on this forum.

£600 per day outside continuously for 15 years would be awesome

But breaks in contracts and travelling all over the bloody place. Working on projects. Cost money and hits your profit as a business.

That is why I am poor.

You young guys really do need to get over yourselves.

I started contracting in 2007. I've had a mix of LTD/outside, FTC and umbrella contracts in those years. Never had a day rate of £600 (usually £500-550 although first contract was £350). Paid for own travel, never claimed back via company (you only save 20% on the cost anyway).

Yes, costs do hit your profit margin, as they do all companies. But as a business owner you need to manage this, or just go back permie.

But, despite not being a massive earner compared to some on here, I'm still doing very well. In part, but not exclusively due to, not p1ssing my spare cash up the wall and not having kids (you could argue these 2 are not mutually exclusive

Kids of today, always jealous that someone else has more than they do

[mallisarealperson]

You young guys really do need to get over yourselves.

I started contracting in 2007. I've had a mix of LTD/outside, FTC and umbrella contracts in those years. Never had a day rate of £600 (usually £500-550 although first contract was £350). Paid for own travel, never claimed back via company (you only save 20% on the cost anyway).

Yes, costs do hit your profit margin, as they do all companies. But as a business owner you need to manage this, or just go back permie.

But, despite not being a massive earner compared to some on here, I'm still doing very well. In part, but not exclusively due to, not p1ssing my spare cash up the wall and not having kids (you could argue these 2 are not mutually exclusive

Kids of today, always jealous that someone else has more than they do

£600 per day is my dream, not reality.

I started back in 2005.

[Snarf]

This bit I don't really understand. How is the income tax amount calculated here? I assume this person took out dividends and paid dividend tax on those - is that taken into account? What if they split income with a spouse and their spouse also paid dividend tax?

I'm also interested in this, he will have paid around 10-15k a year in CT too so 30-45k over the three year period, is that taken into account? does he get that back and then owe 70k or is it 70k on top of the CT, Income Tax and NI he has already paid?

[TwoWolves]

The good old substitution clause strikes again. It's entirely synthetic and utter nonsense but it's a belter for HMRC in winning cases. The whole point of hiring a contractor is that they have specialist skills you don't have/require in the long term.

I do however find the notion of any manager as a contractor makes little sense, especially in IT. Could sub them out with a goat and nobody would notice.

[jamesbrown]

I'm also interested in this, he will have paid around 10-15k a year in CT too so 30-45k over the three year period, is that taken into account? does he get that back and then owe 70k or is it 70k on top of the CT, Income Tax and NI he has already paid?

Like I said earlier, that would generally be taken into account, but there are absolutely no guarantees and it could be refused, strictly, since it would require a revised CT return and that must happen within a short period (4 years after the year in question, iirc). However, if the tribunal judge is asked to rule (and rules) on the amounts owed, then that stands.

[Snarf]

The taxes can't really be counted as paid for the dividends as inside Ir35 means no money for dividends so they would be classed as illegal and it all goes to hell in a handcart.

Thats an interesting point, I managed to find an outside IR35 contract in the end so didnt go inside in April but my intention had been that if I went inside I would continue to pay my partner a dividend from the funds retained in the company (whilst waiving mine). It was discussed with my accountant that I could also take dividends from this on top of my PAYE salary but would have to accept that my PAYE income would put me in the higher tax bracket so I'd be paying a lot of dividend tax so decided against this.

As I understood it me being inside IR35 would not have a bearing on the company or its ability to pay out wages or dividends as long as it had available funds?

[northernladuk]

Like I said earlier, that would generally be taken into account, but there are absolutely no guarantees and it could be refused, strictly, since it would require a revised CT return and that must happen within a short period (4 years after the year in question, iirc). However, if the tribunal judge is asked to rule (and rules) on the amounts owed, then that stands.

This seems to make the most sense and is just the start of a world of pain for the contractor losing the case. You'd imagine it will kick off a very long and painful exercise in trying to work with HMRC to work out what you've paid and argue the toss with them when really they won't care and will want every penny regardless of what you've paid before.

This seems to tie in with the comment I remember reading that what you've paid already doesn't factor in to it and there is no way of working it backwards to come to an amicable solution. You owe them 70k, that's that. It will appear grossly unfair as you've already paid a chunk but it is what it is.