Dragonfly

[OwlHoot]

.. It can't be the lost revenue: it's simply too small to warrant the big spend they've made to end non-IR35 work.

I wonder if it would help if you make a point of mentioning up front, in a PAYE audit for example, that you're a PCG member.

Is this likely to deter an IR35 investigation, if they then realise that you're likely to be clued up and they might have an expensive fight on their hands?

 

[Lewis]

There is only one party involved who could easily see both contracts and that is the agent. If the agent gives a pro ir35 contract to the contractor and then nullifies all the pro ir35 elements in the agent-client contract then surley some form of fraud/misrepresentation has been comitted - why should there be no come back on the agent in these cases?

I agree but can't help thinking all it will result in is agents no longer giving IR35 friendly contracts ... then contracting will be left to those who take them. But at least there is no uncertainty!

 

[Lewis]

Yep - so take heed and only keep your VAT and a couple of 100 in the company - get the rest out and spend it

Nice idea but I have a heap of corporation tax awaiting payment!

 

[VectraMan]

There is only one party involved who could easily see both contracts and that is the agent. If the agent gives a pro ir35 contract to the contractor and then nullifies all the pro ir35 elements in the agent-client contract then surley some form of fraud/misrepresentation has been comitted - why should there be no come back on the agent in these cases?

I assume you'd have to prove some kind of loss on your part as a result, and can you? Your income is unaffected by IR35, it's just the amount of tax you pay on your income. Even if they'd blatantly lied, I'm not sure you could claim that being classified in a different tax rate is in any way their responsibility, unless they'd made an explicit promise or advised you.

But IANAL. Though the fact that nobody has tried this does suggest the lawyers don't think it would fly.

 

[VectraMan]

Nice idea but I have a heap of corporation tax awaiting payment!

You can pay that early and get interest back from the government.

 

[The Lone Gunman]

I agree but can't help thinking all it will result in is agents no longer giving IR35 friendly contracts ... then contracting will be left to those who take them. But at least there is no uncertainty!

If it removes the uncertainty then that is a good thing. I could set my rate to compensate. What I have now is the worst of all worlds. I think I am outside IR35 and charge accordingly. In 6 years time case law has moved on and I am inside. I get a bill but cant recover the cost from the client or agent. Busted.

Tony: I said clients, agents et al. I suspect it is the agents who are at fault, but the client knows what is going on.

 

[Lewis]

If it removes the uncertainty then that is a good thing. I could set my rate to compensate.

That is a very good point!

 

[The Lone Gunman]

But IANAL. Though the fact that nobody has tried this does suggest the lawyers don't think it would fly.

There has been a reticence from the PCG on this one, advice has been not to use the nuclear option. I think the only lost IR35 case where it was obvious that the client and/or agent had lied was the Arctic case and the chap who owned the company was in no fit state to face another legal battle.

 

[malvolio]

I wonder if it would help if you make a point of mentioning up front, in a PAYE audit for example, that you're a PCG member.

Is this likely to deter an IR35 investigation, if they then realise that you're likely to be clued up and they might have an expensive fight on their hands?

If you've got PCG Plus, you won't be talking to them at all. Your professional representative will be...

There has been a reticence from the PCG on this one, advice has been not to use the nuclear option. I think the only lost IR35 case where it was obvious that the client and/or agent had lied was the Arctic case and the chap who owned the company was in no fit state to face another legal battle.

Not Arctic, which wasn't IR35 anyway. This guy was Dec 2007, screwed by mismatched contracts and was so tired of it all he didn't want to take it any further.

 

[expat]

Oh it stinks. It is possible that a decent legal mind will find a way of crossing the line, but I cant see how.

In their eyes it is perfectly justified: (to them) what you are doing is deliberately using the wrong status, which lets you keep more of the tax that you should be paying, admittedly at the cost of throwing away hard-won benefits. So it's only poetic justice that you get knocked back on the wrong tax gain, without getting the benefits that you so deviously rejected.

Gotcha!