Dave Chaplin's anti IR35 campaign

[JohntheBike]

TL; DR

There's no point in discussing if you aren't listening. "Changes" have been proposed for at least ten years, supported by rigorous and independent research into the damaging effects of IR35 in general. The fact remains, IR35 is a dead cause and is not going away. These latest changes are a nonsense, but they are going to happen. All anyone can do is ensure they are outside IR35 so they won't be affected. That is where the work is going now, educating both contractors (well, those that are listening), agencies and clients.

The solution is perfectly simple: even Chaplin agrees with me that deliverables-based contracts are the golden bullet.

"The solution is perfectly simple: even Chaplin agrees with me that deliverables-based contracts are the golden bullet"

but that is only possible if the clients/agencies are listening. You are accusing me of not listening, but you need to direct your criticisms at the clients and agencies. Make no mistake about it, clients still want the flexibility that contractors provide, i.e. BOS, but do not want the incumbent employee obligations. That is the reality of the environment. So in the same way as you may wish to promote the IBOYA principle, the market doesn't support this in my opinion.

[JohntheBike]

Mal is absolutely spot on in both his posts. By using such a broad brush i.e attacking IR35 then you lack any credibility going forward. No organisation uses words like this and they didn't when the Public sector changes went in. They focus on a specific area be it off payroll rules, CEST, benefits whatever and attempts to influence an outcome that is in the contractors favour. It doesn't just attack IR35. That's pointless. Why attack something that isn't going to change. It's the overarching topic yes but it's here to stay.

The only people that spoke about attacking IR35 back in the public sector farce were noobs that suddenly found their 'jobs' were going to be just that. Everyone else focussed on the implementation of the rules, not IR35 as a whole.

If you spent a bit more time on your titles and wording to make it look like you were doing something to address the implementation of the new rules you might be worth listening to. Lording it over everyone thinking you are making a difference to IR35 as a whole is just pointless and gives the impression you just don't have a clue what you are doing.

" Lording it over everyone thinking you are making a difference to IR35 as a whole is just pointless and gives the impression you just don't have a clue what you are doing"

again you are distorting what I'm saying, which is, that for reasons akin to Martin Niemöller's principles, we cannot afford to accept any laws from HMG, including HMRC, which continue to disadvantage us as citizens. Did you agree with the abolition of hanging and the legalisation on homosexuality? Both were repealed by public pressure. There are probably many more examples. By saying nothing can be done about IR35 is akin to saying that nothing can be done about any laws which disadvantage the populace, and is defeatist in my opinion.

[northernladuk]

again you are distorting what I'm saying, which is, that for reasons akin to Martin Niemöller's principles, we cannot afford to accept any laws from HMG, including HMRC, which continue to disadvantage us as citizens.

What you are forgetting is that in some cases IR35 is very valid and enforceable. It was brought in to address a loophole but has blown in to a monster. The problem with it is it does not suit what WE do. Friday to Monday contractors should be caught by it so it works. Unskilled labour working through a company rather than as temp can be challenged and in some cases IR35 works and there are a lot more people like that than there are highly skilled IT people. IMO some people should quite rightly be caught by IR35 as they are doing nothing but being a disguised permie. IR35 is a valid law.. for some. Not us. Trying to attack IR35 as a whole when it affects more than us is just fruitless. What not take it up the chain and attack taxes? Sounds ridiculous right?

So Martin's principles don't work for IR35 as a whole. What we cannot accept is badly executed off payroll changes. So focus on that, as we've said over and over again.

Did you agree with the abolition of hanging and the legalisation on homosexuality? Both were repealed by public pressure. There are probably many more examples.

I am sure there are, but all as ridiculous and irrelevant as your examples.

By saying nothing can be done about IR35 is akin to saying that nothing can be done about any laws which disadvantage the populace, and is defeatist in my opinion.

You've got to pick your battles. IR35 works in some cases, the application of new rules to other areas don't. So you need to focus on what element on IR35 needs changing. Anyone with a hole in their arse, except for you, knows that IR35 is here to stay so need to refocus your efforts.

Edit : reading this back it opens up a raft of arguments that aren't worth getting in to. The point is attacking IR35 as a whole is fruitless. Focus on its application to certain area.

[fibio]

What you are forgetting is that in some cases IR35 is very valid and enforceable. It was brought in to address a loophole but has blown in to a monster. The problem with it is it does not suit what WE do. Friday to Monday contractors should be caught by it so it works. Unskilled labour working through a company rather than as temp can be challenged and in some cases IR35 works and there are a lot more people like that than there are highly skilled IT people. IMO some people should quite rightly be caught by IR35 as they are doing nothing but being a disguised permie. IR35 is a valid law.. for some. Not us. Trying to attack IR35 as a whole when it affects more than us is just fruitless. What not take it up the chain and attack taxes? Sounds ridiculous right?

Exactly this. My current client have conducted a review of the projects in my area and decided they actually want it to become a permanent function and to convert contractors to perm (no, it's not HSBC but I can see them from the window).

I would wager money that I'm the only contractor on the project that has changed to operating as inside IR35 as a result of the changes. Most of the other permietractors will happily have a hushed conversation that they hope to convert to perm before April 2020 and side-step an investigation.

[malvolio]

"The solution is perfectly simple: even Chaplin agrees with me that deliverables-based contracts are the golden bullet"

but that is only possible if the clients/agencies are listening. You are accusing me of not listening, but you need to direct your criticisms at the clients and agencies. Make no mistake about it, clients still want the flexibility that contractors provide, i.e. BOS, but do not want the incumbent employee obligations. That is the reality of the environment. So in the same way as you may wish to promote the IBOYA principle, the market doesn't support this in my opinion.

Even if it is the only certain way to step around the off-payroll rules?

As i said, no point arguing. You are wrong and i, along with some serious well-informed players like IPSE, REC, CIOT and St. Chaplin, am right

[JohntheBike]

What you are forgetting is that in some cases IR35 is very valid and enforceable. It was brought in to address a loophole but has blown in to a monster. The problem with it is it does not suit what WE do. Friday to Monday contractors should be caught by it so it works. Unskilled labour working through a company rather than as temp can be challenged and in some cases IR35 works and there are a lot more people like that than there are highly skilled IT people. IMO some people should quite rightly be caught by IR35 as they are doing nothing but being a disguised permie. IR35 is a valid law.. for some. Not us. Trying to attack IR35 as a whole when it affects more than us is just fruitless. What not take it up the chain and attack taxes? Sounds ridiculous right?

So Martin's principles don't work for IR35 as a whole. What we cannot accept is badly executed off payroll changes. So focus on that, as we've said over and over again.


I am sure there are, but all as ridiculous and irrelevant as your examples.


[I]You've got to pick your battles. IR35 works in some cases, the application of new rules to other areas don't. So you need to focus on what element on IR35 needs changing. Anyone with a hole in their arse, except for you, knows that IR35 is here to stay so need to refocus your efforts.

Perhaps you missed this post of mine -

Right from the beginning of IR35, my question has been, why should the contractor be punished for a situation that the clients have created and which in many cases, the contractors are forced to accept, whilst suffering no penalty themselves?

BOS permietractors have been created by the clients and there should be some equal responsibility on them for doing so. I contend that the implications of that should be that anyone working in such a way who is judged by HMRC as a "disguised employee" should receive employee benefits. However, we are always faced with HMG's position that employee for tax purposes doesn't mean employee benefits accrue. However, as I've stated many times, there is no case law supporting that position. Even now, after all these years, no one has been able to challenge HMG's position in court on this issue.

Here is an extract from the letter received from my Labour MP about the Shadow Treasury team's opinion on the issues -

"There are indeed very real concerns that workers are being forced into self employment by unscrupulous employers to avoid costs and their duty to workers" and

"However, ultimately we (the Labour Party) made a commitment in our manifesto to tackle tax avoidance"

So, the inference is that the penalties will still fall on the contractors as there is no mention of any policy to tackle the approach of the clients.


"What you are forgetting is that in some cases IR35 is very valid and enforceable"

that is the opinion of an IBOYA contractor.

"The problem with it is it does not suit what WE do"

you might. Until recent years, I was a BOS contractor, and still would be if I were not working from home. And as I keep repeating, as a BOS contractor with no ROS, I proved, by using the ET/EAT that I could not be a disguised employee of my client and thus be subject to IR35

"Friday to Monday contractors should be caught by it so it works"

even those that are forced into this by unscrupulous (as the Labour party policy classes them) clients?

"IMO some people should quite rightly be caught by IR35 as they are doing nothing but being a disguised permie. IR35 is a valid law.. for some. Not us. "

us, refers to those IBOYOA, not BOS and as I've just said, BOS contractors have been created by clients and WE (a BOS) are being penalised for an issue not of our making.

This is where the dividing line is in this IR35 debate. You appear to support the IBOYOA ideology, whereas many, including me are BOS. So our opinions will never coincide.

[JohntheBike]

Even if it is the only certain way to step around the off-payroll rules?

As i said, no point arguing. You are wrong and i, along with some serious well-informed players like IPSE, REC, CIOT and St. Chaplin, am right

each to his own agenda, and I won't waiver from my opinion, even if you think I'm wrong.

[northernladuk]

Perhaps you missed this post of mine -

Right from the beginning of IR35, my question has been, why should the contractor be punished for a situation that the clients have created and which in many cases, the contractors are forced to accept, whilst suffering no penalty themselves?

BOS permietractors have been created by the clients and there should be some equal responsibility on them for doing so. I contend that the implications of that should be that anyone working in such a way who is judged by HMRC as a "disguised employee" should receive employee benefits. However, we are always faced with HMG's position that employee for tax purposes doesn't mean employee benefits accrue. However, as I've stated many times, there is no case law supporting that position. Even now, after all these years, no one has been able to challenge HMG's position in court on this issue.

Here is an extract from the letter received from my Labour MP about the Shadow Treasury team's opinion on the issues -

"There are indeed very real concerns that workers are being forced into self employment by unscrupulous employers to avoid costs and their duty to workers" and

"However, ultimately we (the Labour Party) made a commitment in our manifesto to tackle tax avoidance"

So, the inference is that the penalties will still fall on the contractors as there is no mention of any policy to tackle the approach of the clients.


"What you are forgetting is that in some cases IR35 is very valid and enforceable"

that is the opinion of an IBOYA contractor.

"The problem with it is it does not suit what WE do"

you might. Until recent years, I was a BOS contractor, and still would be if I were not working from home. And as I keep repeating, as a BOS contractor with no ROS, I proved, by using the ET/EAT that I could not be a disguised employee of my client and thus be subject to IR35

"Friday to Monday contractors should be caught by it so it works"

even those that are forced into this by unscrupulous (as the Labour party policy classes them) clients?

"IMO some people should quite rightly be caught by IR35 as they are doing nothing but being a disguised permie. IR35 is a valid law.. for some. Not us. "

us, refers to those IBOYOA, not BOS and as I've just said, BOS contractors have been created by clients and WE (a BOS) are being penalised for an issue not of our making.

This is where the dividing line is in this IR35 debate. You appear to support the IBOYOA ideology, whereas many, including me are BOS. So our opinions will never coincide.

And again, you are focussing on highly skilled individuals where the difference between the two is proving very difficult to sort out hence all this mess.

What I tried to point out is that IR35 affects many many more people. My client has over 2000 contractors of which IT guys make up low 10's of percent. The others areas that have noteable contractor presence are service desk, depots, HR, drivers and more. In these areas you've a mix of agency/umbrella and PSC's. Most of these are going to fail the test and will be deemed inside, which is arguably correct.

The point is you are focussing on a very small group of people (us) where there is a massive grey area and we need to fight that. There are many many more where IR35 will apply successfully so you cannot fight that. Technically the legislation is fit for purpose in those areas so not a chance fighting it.

And again with this comment...

"Friday to Monday contractors should be caught by it so it works"

even those that are forced into this by unscrupulous (as the Labour party policy classes them) clients?

In most cases in our situation the person wants to go contracting, lured by the prospect of taking more of the money home. We see it endlessly on here. We are not really the victims of this practice, it's the lower skilled people that are being shafted by this so not quite the same argument.

If you are going to champion the fight against IR35 you've got to do it for everyone involved, not just highly skilled IT people. Something you don't seem to get.

[northernladuk]

each to his own agenda, and I won't waiver from my opinion, even if you think I'm wrong.

But I guess that kinda ends the thread.

Please do it quietly somewhere else then. Thank you.

[WordIsBond]

Well, the fact is that IR35 should be abolished and if we quit saying so no one else will.

There are huge imbalances in the taxation system such that, rather than merely providing an incentive to self-employment / independence, to compensate for the loss of tax-free benefits such as employment rights, the current Ltd taxation (vs the excessive ERNI/EENI/IT tax under PAYE) provides an excess incentive which encourages cheating via false self-employment and tax-motivated incorporation.

IR35 was and remains a deeply flawed and confusing attempt to rectify this. Until the excessive tax imbalance is rectified, there will always be those who want to pretend to be independent when they aren't, so there will always be a reason for HMRC/HMG to argue that IR35 is needed, and it won't go away. It could be tinkered with and improved, rather than just sledgehammer everyone into it like they are trying to do, but it is always going to be ugly and flawed, expensive and complicated to comply with and enforce.

The answer is to lessen the imbalances in the tax system and then you don't need IR35. That may not be as popular with contractors because it would cost us some dividend taxation or a higher corporation tax rate on closely held companies. It wouldn't hurt to cut the huge tax burden on employment, of course.

Personally, I'd be entirely comfortable with 2% more on div tax or CT in exchange for seeing Gordon Brown's abominable creation finally die, and it would probably be revenue positive for the government if they did that and eliminated IR35. It would cost contractors more tax but it would save on insurance, contract reviews, etc, etc. It would save HMRC concocting ever new ideas to somehow force everyone to comply that they think should.

And if you just propose abolishing IR35, the answer will be that it costs too much. If you propose simplifying tax, ending the enforcement compliance nightmare, and compensate for it with a small increase in dividend tax or CT on close companies, you might actually get a hearing.

All that is to say I do think we should be fighting IR35. It's bad law. It's an attempted sticking plaster on a tax imbalance, and the tax imbalance should be lessened and the bad law removed.