Finance Bill 2019-20 draft legislation

[WordIsBond]

It's possible, but extremely unlikely (why would the client change their mind or do anything to support you?), and you won't get back any NI - that is lost forever.

This could perhaps succeed if you have a silver bullet, like you do a substitution. But even then, the client could just say, 'Well, yes, but we had to approve it and we did, it wasn't unfettered at all.'

There's one other approach that might be tried, if Brexit doesn't kill it. ECHR, Article 6.1:

In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.

Forget the 'criminal charge' part.

This 'reform' puts the determination of a contractor's 'civil rights and obligations' (how much tax he must pay) in the hands, not of an independent and impartial tribunal, but a party who is demonstrably not 'impartial' in that they have made contradictory decisions ('employee' for one purpose, 'not employee' for another), both of which are detrimental to the worker, and one of which is beneficial to the party making the determination.

[JohntheBike]

Yes, because IR35 cases have always been lost AFTER it was too late to go to the ET. So that lack of history is not really relevant.

agreed, so far. However, it is about to change. There will be contractors, like me, who have been with their client for a considerable time and will judged as inside. We don't see anyone posting here from a client/agency organisation, and I guess they are either oblivious to the serious implications or feel that HMRC is a greater risk. They'd be very wrong. Also, there is provision in the ET rules to appeal an out of time decision, an issue that hasn't been tested up to now, as far as I know. However, it has been suggested that representative organisations should investigate this issue, but none seem to have done so to date.

We can only now neutralise IR35 buy someone hitting a high profile agency/client with an ET claim for employment benefits. Only then will clients see that judging a contractor inside IR35 when they are not, is a far greater risk than any pressure from HMRC.

[JohntheBike]

He has put up a decent fight but for his own reasons.

With the changes analysts will still analyse, developers will still develop but I'm not sure how commercially viable a contractor information website will be. I wish him the best of luck, I just find the whole self proclaimed champion of the contractor a little hollow.

well, whatever his reasons are, I would say that he's put up a much better and visible fight than some organisations have. Some of those organisations have claimed to have the ear of government, but without being able to demonstrate this with visible results. Recent events have shown how hollow such claims are.

[JohntheBike]

Not fuming, but definitely nervous.

Personally I don't see that inside IR35 Ltd Co working makes sense to anyone. Contractor has all the admin hassle of running a Ltd Co with virtually none of the benefits. Client potentially has risk of contractor going for employment rights (I note webberg's comments re tax/employment law being totally separate, but equally agree with other people's comments surely that can't stand long term). Contractor challenges inside IR35 status, hence gets nice reports from client explaining why the client views them as inside (ie working practices like an employee). Contractor takes those same reports signed by the client to an employment tribunal.

Those contractors who have limited scope for outside will IMHO likely close their companies, and either go permie or umbrella. Due to this I do anticipate over the next 12 months we're going to lose far more clients than normal, and it will be painful/depressing...but I don't see it as the death of our business. I'm confident a decent proportion of contractors will be safe (ie find work where all parties agree it's outside IR35). Also quite a few of our clients are more at the freelancer end (eg web developers doing fixed price websites for small biz, that kind of thing). Plus when it comes to silver linings, we may have a bumper 12 months for MVL Online to compensate

and it will be those reports which will condemn the client to a loss in the ET. It's going to happen!

[JohntheBike]

If the contractor was outside for even part of this year before starting this contract, or expects/hopes to be outside within a year or so, then having a 6-12 month contract would not be reason to close his company, necessarily.

The real problem with inside IR35 Ltd Co work under this reform is you can't protect against the NI contributions with large pension contributions. You can only do that if you go with an umbrella -- but then you have to pay umbrella fees, too.


Precisely. A week after leaving. Especially if they let him go without notice.


It doesn't take that many of those before the clients who insist that everyone is inside suddenly realise they aren't getting the best people. I agree. There might be a glut of inside determinations initially, but usually market forces attain some kind of equilibrium even when government has tinkered/interfered. That will happen here, too.

did I post this?

[JohntheBike]

I was repeating a point that I've been making for a long time now, that the "old think" of having a contract that says many things about the role and how it's performed which if measured on its own is "outside", m
eans that you are actually "outside", never was correct or safe and will become even less so in the new world.

The "new think" has to be to look at the role and its performance first and draw a contract up that reflects it - and to subject that written contract and the actual role to gap analysis at regular intervals. This now has to be done between end client (more likely some form of intermediary) and the contractor.

I accept that the likes of QDOS have a role to play in determining the final position both factually and contractually, but they cannot produce a set of words or clauses which switches an inside contractor role to an outside version.

I read the context of the point I was responding to as suggesting that clever wording could achieve this. I may have put too much weight on that, in which case, my apologies.

I wouldn't say it's "new think". Both the FTT and the ET have been obliged to look at the whole picture, i.e. the contract and the actual working practises. Then they are required to make a judgement "on balance" of the evidence.

[JohntheBike]

Sounds fine. All ETs are like Judge Judy, right?

ah, no.

[JohntheBike]

I get the whole tax and employment status laws should be aligned argument on a moral and to some extent logical level but no one has ever pointed out it's basis in law.

At the moment similar happens to self employed delivery drivers, etc. who work shifts when they are told and nothing seems to be happening over that at the moment.

there isn't any basis in law, as I keep saying.

[helen7]

My skills are not unique, but they are valuable, as they are mostly unavailable in the permie resource pool.

I don't know how long have you been contracting for, but doesn't seems to be long

Contracting for 25 years next month.

[BrilloPad]

Contracting for 25 years next month.

Okay Harry