Reply to: Legal action / Mislead contract was outside IR35

[cojak]

This is now going around in circles and for that reason, thread closed.

[cojak]

So the consensus here is that you find a contract that is outside IR35, you get the paperwork checked out all is fine.

You start working, you try operate outside of IR35 from day one. It's fine first few months but then later little things start happening and the Client is not respecting the terms of the contract.

At that point you call it quits, pay the taxes and the client gets away with it and cycle repeats. Damn life really can be unfair.

The moment you see things going south, you hand in your notice and walk. Then maintain your outside status till they walk you off site.

The thought of taking the client to court is faintly ludicrous. You could be doing that more than once in your contracting career.

[cyborg1337]

No they don't under the new April rules the right determination is Inside IR35 and blanket bans on PSCs as staff cannot be trusted to keep less diligent contractors outside..

As I've stated on numerous times today - the new approach seems to be justified in soo many ways.

Sometimes contractor's are in a contract which on paper is outside IR35, however sometimes (sooner or later) they get in a position which can cause confusion. Sometimes it's obvious that it's inside, sometimes not so clear, sometimes it's outside at the start and things change later.

When I pushed back and operated how I should if I'm outside, it got my contract terminated. I'll admit and pay my taxes. Will the supplier own up to their mistakes and pay for them?

[DevUK]

go for it.
let us know how you get on.

another fantastic reply from you there

[eek]

Like I said; Immediately there wasn't a problem. Gradually later in the year, as things progressed, people changed, things got tricky.

On the most part I operated as outside IR35, which in the end resulted in my contract being ended.

And they are getting away it. Also they really need to train up their incompetent staff on dealing with outside IR35 contractors.

No they don't under the new April rules the right determination is Inside IR35 and blanket bans on PSCs as staff cannot be trusted to keep less diligent contractors outside..

As I've stated on numerous times today - the new approach seems to be justified in soo many ways.

[cyborg1337]

In which case you would know the importance of your working practices and you failed to follow QDOS's advice...

Like I said; Immediately there wasn't a problem. Gradually later in the year, as things progressed, people changed, things got tricky.

On the most part I operated as outside IR35, which in the end resulted in my contract being ended.

And they are getting away it. Also they really need to train up their incompetent staff on dealing with outside IR35 contractors.

[jamesbrown]

I'm not sure that's an option - it's one thing to attack a company that has zero capital and is really a labour enterprise (as contracting is) and another to use the same rules for a close company like my new one (£150,000 capital ignoring 9 months of my time (completely unpaid) which would otherwise have been another £120,000).

One deserves very different rules to the other yet both are close companies.

Politically? Politically, the easiest thing to do is something that has limited scope and is simple, such as increased dividend taxation (focused to avoid pensioners). Beyond that, everything else is a degree of hard. My overall point is that this is neither a new problem nor a problem unique to the UK, and the UK seems to have chosen the most clown shoe legislation possible. FWIW, the OTS did a comprehensive review of look-through from a simplification POV a few years ago, and they didn't particularly like it (but saw some benefits in terms of fairer taxation of labour supplies, as well as some downsides).

[eek]

Yes not just the agencies word; I used QDOS to confirm it was outside.

In which case you would know the importance of your working practices and you failed to follow QDOS's advice...

[eek]

There are degrees of change. Addressing the imbalances between employment and tax law is a fundamental change that would require a massive majority and a gov't focused on that (if that's what you mean, I agree). Pushing through something akin to look-through for close company directors is a tax change and comparatively easy. There are ways to increase taxes on close company directors that don't look anything like IR35 (and are much better, more equitable), even if they are papering over the employment law/tax law imbalance.

I'm not sure that's an option - it's one thing to attack a company that has zero capital and is really a labour enterprise (as contracting is) and another to use the same rules for a close company like my new one (£150,000 capital ignoring 9 months of my time (completely unpaid) which would otherwise have been another £120,000).

One deserves very different rules to the other yet both are close companies.

[jamesbrown]

There isn't actually that many times when you can start to implement the fundamental changes that are required. It requires a new Government with a large majority for it to occur.

And this is the first time since 2005 when such a Government has existed - sadly I think there are more pressing issues...

There are degrees of change. Addressing the imbalances between employment and tax law is a fundamental change that would require a massive majority and a gov't focused on that (if that's what you mean, I agree). Pushing through something akin to look-through for close company directors is a tax change and comparatively easy. There are ways to increase taxes on close company directors that don't look anything like IR35 (and are much better, more equitable), even if they are papering over the employment law/tax law imbalance.

[cyborg1337]

No I don't get your point - as I don't think you did anything to confirm what the agent said was correct.,

Let me repeat my first question:-

Did you get an outside professional (say QDOS) to check that your contract was actually outside IR35 or did you just take the agency's word for it. I won't even ask about my second working conditions part.

Yes not just the agencies word; I used QDOS to confirm it was outside.

[eek]

Right, the UK is thick-as-mince in this area of policy, as in some others. Our civil service just doesn't understand the sunk cost fallacy and prefer to double down on thick-as-mince.

There isn't actually that many times when you can start to implement the fundamental changes that are required. It requires a new Government with a large majority for it to occur otherwise point scoring for votes would win..

This is the first time since 2005 when such a Government has existed - and sadly I think there are more pressing issues...

[jamesbrown]

All those solutions require a sensible debate and HMRC know that that is never going to occur....

Right, the UK is thick-as-mince in this area of policy, as in some others. Our civil service just doesn't understand the sunk cost fallacy and prefers to double down on thick-as-mince because it is politically easy.

[eek]

I feel like you get my point; but won't admit. No hard feelings.

I'm prepared to own and pay for my mistakes, it just bothers me that companies get away so easily (well let's see what happens).

No I don't get your point - as I don't think you did anything to confirm what the agent said was correct.,

Let me repeat my first question:-

Did you get an outside professional (say QDOS) to check that your contract was actually outside IR35 or did you just take the agency's word for it. I won't even ask about my second working conditions part.

[eek]

Mostly the abuse is just ignorance. I have nothing against contractors paying more tax as a policy decision (I would prefer to pay less, but hey ho, this is a democracy ). However, IR35 has always been a thick-as-mince UK solution to an international problem with much better solutions. It's been central to a whole host of disasters in recent years, such as tax avoidance schemes/loan charge, legislative uncertainty, permietractoring as a viable thing etc. We either need strict deeming criteria, which is the standard approach in most other jurisdictions, or we need to align taxes on earned and unearned income, at least for close company owner directors (aka "look through"). This is all blindingly obvious.

All those solutions require a sensible debate and HMRC know that that is never going to occur....