Dragonfly

[tim123]

Buuultulip. Are you telling me that if a complete stranger turned up at your door and said he was the builders labourer you would let him in unquestioned?

People do. I don't think it quite works like you have posted, normally when you employ a builder for a contract that matters for the tax bill (in cash terms), it will be a large enough job for them to send two or three guys. During the course of the month or two that the job takes you could end up with a completely different three guys at the end than you did at the start.

Besides, that is just one example, there are loads of others. Actors, footballers, lawyers(not chambers) etc are all employed on a personal service basis.

These people "tick" the self employed box for a different reason.

I'm not discussing these other reasosn, I only commented upon substitution.

Further, my business is far too complex to send a sub (on many occasions). Any plumber can see what needs doing, as can any electrician or brickie. Assuming you are a programmer, could you just turn up here and start fixing the bugs in the helicopter nav system I am presently working on?

You can't. And as I have said before on this board (many times) I don't believe that we (most contractors) have a hope in hell of passing the IR35 tests using a substitution clause, and I doen't see (a) why people have put so much effeort into trying, (b) why having a court say something that ISTM ought to be blindingly obvious is a setback to the cause (other than a self inflicted one).

My point isn't about whether IR35 is right, it's about whether we could (or should) be able to get past it using substitution and I've always believed that answer to be "no", and ISTM that a lot of effort (that could have been usefully used elsewhere) has been wasted finding this out

tim

 

[oracleslave]

My point isn't about whether IR35 is right, it's about whether we could (or should) be able to get past it using substitution and I've always believed that answer to be "no", and ISTM that a lot of effort (that could have been usefully used elsewhere) has been wasted finding this out

Out of interest would you consider someone that has successfully utilised their ROS clause in their contract to have 'gotten around' IR35?

 

[Jubber]

I had always assumed it was a personal debt. That all the monies (less 5%) earned by your company would be regarded as your personal income. Once you have accounted for legitimate expenses you would be taxed at the relevant rate on the rest and it would be a personal tax bill not a business tax bill.

I agree with most of your good points - but on this I disagree - it is a salary. The company owes the tax, not you.

As long as the tax man cannot prove negligence as a director, which I presume, for example, would be emptying the company account the day after you receive your letter of PAYE review.... all will be well.

I still say that as long as you have your affairs in order - strict paperwork showing 'to the best of your knowledge and belief' you were operating your company in a proper legal way, which by the way, we are! ....... then you have nothing to worry about. If it goes against you, let him have an empty bank account and the office PC.

I had a review back in 2004 (or was it 2003) and nothing came of it. He just asked me a list of questions, took my books away, sent them back with a bill for a grand or so. Simple. I honestly think the inspector was not too bothered about anything. Just did his job in the easiest fashion possible and wanted to get home (as most of them do)

 

[tim123]

However, the commisioner, in making his original judgement, has wilfully disregarded some areas of case law such as RoS being a non-employee inidcator

No he didn't.

He decided as an issue of FACT that the RoS was a sham (not the word used) and that therefore he was allowed to ignore it when applying the case law to establish whether the guy was employeelike.

ISTM that he was perfectly entitled to do this. Whether his ruleing in fact was right or not is irrelevent (because it cannot be appealed unless it is peverse), but having found that it was, the original judge did not not ignore case law on the issue.

I told you all this before the appeal went forward and you ignored me. A High court judge has just told you the same thing and you are ignoring him.

Are you going to ignore the appeal court judge as well when he tells you the same thing?

tim

 

[tim123]

Out of interest would you consider someone that has successfully utilised their ROS clause in their contract to have 'gotten around' IR35?

Yes, provided that it had be used in the way that case law has established is the way which shows self employment.

That way is the provision of a temporary substitute "during" the life of the contract (and paid by the contractor), not the right to "suggest a replacement at the end (paid by the client)".

How many out of the 100,000 contracts do you think have done this. 10, 100 perhaps? It certainly isn't thousands.

tim

 

[oracleslave]

How many out of the 100,000 contracts do you think have done this. 10, 100 perhaps? It certainly isn't thousands.

tim

To be honest I don't give a flying fig on the numbers of others that have done this. I know I have used it on my last 2.

 

[BlasterBates]

Looks like this is an international problem. Heard that in Switzerland they're clamping down, though NI is fairly low there; in Germany life is also getting uncomfortable. Having now recieved the form in Germany, and having spoken to the tax advisor I think this has to be taken more seriously from now on.

 

[ratewhore]

The length and number of contracts should not matter.

I'm not saying that contract duration is or isn't a pointer to IR35. What I'm saying is, for a short contract, an IR35 loss (for whatever reason) will result in a lower award against you than a longer term contract (due to higher billing)...

 

[Jubber]

I think we might be getting too excited about this one anyway - isn't this DragonFly chap the one who said at his initial PAYE interview ....

"I had my contract changed to put me outside of IR35".? (or similar)

Honestly ....

 

[Robwg]

I think we might be getting too excited about this one anyway - isn't this DragonFly chap the one who said at his initial PAYE interview ....

"I had my contract changed to put me outside of IR35".? (or similar)

Honestly ....

No - there were two cases that got lost last year around the same time - Dragonfly was one, there was another guy. he was the one who basically told the revenue that he had done various things to get out of IR35 - hence why he didn't appeal as the PCG thought he didn't have a case.

Dragonfly has ticked most of the boxes that everyone else has.