RBS, contractors and IR35

[northernladuk]

But surely supporting an individual contractor smacks of a contrived situation. All they will be doing is artificially manipulating the situation to make a disguised permie look outside. They should be looking at their engagement process and the actual role. If it's a BAU enduring role it should be inside whoever is doing it.

Quite amusing you are the biggest voice against IR35 yet you are the one that needs a client to play the game just to make you look outside.

[JohntheBike]

But surely supporting an individual contractor smacks of a contrived situation. All they will be doing is artificially manipulating the situation to make a disguised permie look outside. They should be looking at their engagement process and the actual role. If it's a BAU enduring role it should be inside whoever is doing it.

Quite amusing you are the biggest voice against IR35 yet you are the one that needs a client to play the game just to make you look outside.

I'm certainly not looking for any client to "play the game" as you say and I'm hardly the "biggest" voice against IR35. Judging by your previous criticisms and those from others in another place, I'm more like a voice in the wilderness.

I always saw IR35 as a spiteful socialist tax targeted especially at IT contractors. Yes, there has been some collateral damage, and to a certain extent that damage, e.g at the BBC, has been more high profile that that to the IT community.

HMRC knew that the contracts that existed prior to IR35 would protect both the client and contractor from any claim by HMRC that an individual was an employee of an organisation. They had tried in other fields to make this approach stick, but had failed The underlying pretext of IR35 had always existed, i.e. the working practises and relationship could create a contract of employment. I have associates who run businesses in the building industry and it was always an issue that they had to contend with. HMRC eventually introduced the CIS scheme, where in essence, tax was deducted at source and refunded when an individual was able to prove their independence.

So what HMRC set out to do with IR35, was to legally allow the removal of the contractual nexus in order to look exclusively at the working relationship. This was clearly a sly and premeditated move by HMRC. This approach concurs with the opinion held by many commentators that HMRC doesn't like self employed people as the more individuals who are paid by PAYE, the more potential there is for an increased tax take but more importantly greater control of the populace.

You no doubt will recall that in the 19th century, it was quite often the case that workers were paid in company tokens. which could only be used in company shops. This practise was eventually outlawed when the law allowing workers to have the right to be paid in cash of the realm was introduced. Tony Bliar's government abolished this law and with the huge uptake in electronic transactions, you can see how things could progress.

I know you accuse me of drivel, but think on this. HMG continues to demonstrate that it cannot afford to finance the old age pension and keeps adjusting the rules to minimise payouts. With the advent of work place pensions, I believe that at some point in the future, a much larger proportion of the population will have private pensions and that at some time, entitlement to the old age pension will be reduced if not eliminated. However, we will still pay EES NIC, because it will then be claimed to be financing other issues.

I've learnt not to trust any one or organisation associated with the establishment and so I fight injustice done to me personally with all that I can muster. IR35 is just one of those issues. I've won three cases in the small claims court, one against the Ford motor company, one against my local council and one just recently against an agent of HMRC, who now have a county court judgement against them, with whatever commercial consequences result.

I honestly don't think negotiations will have much effect on the IR35 environment, but court cases where clients feel the full repercussions Iof their decisions, might just have a chance to change things.

If discussion and negotiations had demonstrated that some concessions had been won, then perhaps I'd concede to that approach. But I really can't see that this has been the case. With every passing year, we see our position being more and more constrained.

[Barry Badrinath]

Email sent out today to basically say that the reported RBS position is complete bollocks, and this echoes what I've heard internally.

[JohntheBike]

Email sent out today to basically say that the reported RBS position is complete bollocks, and this echoes what I've heard internally.

doesn't surprise me. I'm expecting virtually all clients, certainly in the initial stages, to cave in to HMRC bullying and judge all contractors, if they still engage them, as caught.

[northernladuk]

doesn't surprise me. I'm expecting virtually all clients, certainly in the initial stages, to cave in to HMRC bullying and judge all contractors, if they still engage them, as caught.

Rubbish.

[SussexSeagull]

I always saw IR35 as a spiteful socialist tax targeted especially at IT contractors.

If it was such a 'spiteful socialist tax' how come it hasn't been repealed in the nine years since Labour left office?

IR35 is a horrible mess but at times elements of the Contracting community haven't helped themselves. Paying yourself the bare NI minimum never looked great (before anyone asks I know we pay tax in other ways but that was never successfully got across). I know it isn't IR35 related but looking back now some of the Loan Schemes do look highly aggressive.

As in so many ways, Business has moved the price and risk of business onto the government or workers. If they want people to come in for a short term project but treat them like a permanent employee - which to be honest is what most want - they should start offering short term contracts that make it worthwhile people doing it and not expect the contractor to push the boundaries of what can be done with the tax system to make it worthwhile.

The whole situation is a mess but it should have been sorted out years ago with common sense rules about only being able to treat people as contractors for a set amount of time and minimum salaries before you can go to dividend payments.

[JohntheBike]

Rubbish.

well, time will tell which of us is correct. I for one would be delighted to be able to say that this wasn't the case, but recent events in the banking industry and those cases that have been reported in the public sector, seem to point this way.

HMG's response to the consultation due on the 11th of July will clearly give us some pointers to what's likely to happen.

[JohntheBike]

If it was such a 'spiteful socialist tax' how come it hasn't been repealed in the nine years since Labour left office?

IR35 is a horrible mess but at times elements of the Contracting community haven't helped themselves. Paying yourself the bare NI minimum never looked great (before anyone asks I know we pay tax in other ways but that was never successfully got across). I know it isn't IR35 related but looking back now some of the Loan Schemes do look highly aggressive.

As in so many ways, Business has moved the price and risk of business onto the government or workers. If they want people to come in for a short term project but treat them like a permanent employee - which to be honest is what most want - they should start offering short term contracts that make it worthwhile people doing it and not expect the contractor to push the boundaries of what can be done with the tax system to make it worthwhile.

The whole situation is a mess but it should have been sorted out years ago with common sense rules about only being able to treat people as contractors for a set amount of time and minimum salaries before you can go to dividend payments.

by "socialist" I meant those in HMRC with "socialist" leanings. Don't forget that Hammond criticised IR35 when in opposition and vowed to abolish it when in power. Clearly he didn't.

Whatever anyone paid themselves, if it wasn't illegal, then it was allowed. The loan schemes are an entirely different kettle of fish. The "system" in the UK allows feckless people to build up debt, which sensible people wouldn't do and then get out of paying those debts by declaring themselves bankrupt.

I know of an actual case where individuals have been made bankrupt, although they were able to keep all their possessions and still have their debts written off after 5 years. The only real discomfort they suffered was not being able to get credit. But that wasn't such a bad lesson. So we can all take advantage of what the "system" allows. The "system" creates the problem, and the "system" allows the get out process.

The clients are as guilty as anyone for contributing to the mess, and so far, haven't suffered any real penalty. We all know that they want employees, but don't want the associated costs. The situation is not of our making, yet we are the ones bearing the brunt of the punishment. This has to change.

[northernladuk]

We all know that they want employees, but don't want the associated costs.

Again, as you've worded it there, it's simply not true.

[JohntheBike]

Again, as you've worded it there, it's simply not true.

If you've always worked in a way in which many claim they have, i.e. IBOYOA with true B2B relationships, then clearly you will have that opinion. If on the other hand, you'd worked as HMRC would claim I always have, then you might have a different opinion.

In the 23 years I've been contracting, I always worked on medium and now, long term support contracts, which by their very nature are "employee" like. I've never worked in that time with anyone who would claim to be IBOYOA in a B2B relationship, mainly because those roles as I see it are generally in development and implementation of new applications etc. Support teams are only involved after implementation and in my experience are unable to change any fundamental design flaws in what is provided. In my day, those that designed and developed a new application, also supported that application. But then that was in the days of bespoke computing.

However, I've determined to my satisfaction and to that of a High Court Judge, if no others, that MyCo is a bona fide business and that I'm not a disguised or real employee of my client. HMRC, with IR35 have tried to challenge that overall situation for the contracting environment, but until these new rules, have failed miserably to do so. Which is why we have the new rules.