Reply to: Declare outside IR35 - what the hell, why not!

[v8gaz]

Nope, the real reason that the government is reviewing IR35 is due to the relentless campaigning from PCG. HTH.

[xxxxmmmm]

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I think the REAL reason the government is reviewing IR35 is that the cat is out of the bag and people are starting to ignoring it, thus it doesn't make as much money as before so they need to come up with another wheeze.[/QUOTE]



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Never ever read more truth regarding IR35 review.

[Boo]

a group of tax dodging fly-by-night fairies were running off to the hills without paying their share of tax.

Aiui what happened is that a bunch of bankers got their legal and accounts departments to set up Ltd Co.s on behalf of some high paid employees. The said employees were retained and worked Mondays to Thursdays as employees of the bank and Fridays to Sundays as employees of the Ltd Co.s. This arrangement avoided large sums of tax and NI on overtime payments from the bank.

So, yes, a bunch of tax dodging *ankers were running off to the hills without paying their share of tax.

Hence IR35 and hence, specifically, the way it is worded and the way it operates.

Boo

[malvolio]

IR35 has always been a con, pure and simple. It was a half baked idea put together by a bunch of lefty, lentil eating half-wits (Dawn Primarolo - that's you) who do not understand anything about companies or business but thought that a group of tax dodging fly-by-night fairies were running off to the hills without paying their share of tax.

ok, perhaps I went a little over the top there.

Nope, that's about right...

[worzelGummidge]

IR35 has always been a con, pure and simple. It was a half baked idea put together by a bunch of lefty, lentil eating half-wits (Dawn Primarolo - that's you) who do not understand anything about companies or business but thought that a group of tax dodging fly-by-night fairies were running off to the hills without paying their share of tax.

ok, perhaps I went a little over the top there.

[ASB]

You only get penalised if you have knowingly ignored the rules. Since IR35 is so vague, you can quite rightly say you believed the rules didn't apply to this engagement. Nobody has yet been penalised

And it's Up To 100%, at the discretion of the Inspector.

That was the case with the ex pmg statement and practice in 2000/1. Certainly it seems they may choose to take a harder line.

HM Revenue & Customs:IR35 - Intermediaries Legislation (IR35) - Working through an intermediary, such as a service company - Consequences of ignoring the legislation

I think "self declaration" of being outside may be risky, the general bar of "reasonable care" has been raised under the new penalty regime anyway.

[malvolio]

Hey Mal, if you have PCG+ membership is there any benefit of also having the QDOS TLC35 insurance?

Nope. QDOS will disagree, but basically you'd be insuring against something that isn't going to happen, given the win/loss ratio of cases defended by the PCG cover. You can keep TLC35 if you really want a belt, braces and a spare pair of trousers approach, or you can get Abbey coverage for the same thing through PCG at a discount. Personally I wouldn't bother, but it would be your call.

[Wanderer]

So just declare yourself outside, get specialist advice if you get investigated and the worst that will happen is that you have to recalculate the tax and pay up what you would have if you were inside IR35 (albeit plus interest). I can live with that.

Some of us have been saying that for ten years. Seems people are finally starting to listen!

Good point! The trouble is that HMRC are very slow to take action. They've got 6 years to decide what they are going to do. So they stand around with their hands in their pockets making noises about how dodgy this all is and that we're all going to have to pay tax and penalties for tax evasion to scare people into paying up.

It's only after 4 or 5 years that the first cases start coming to court and the muddy waters start to clear. It was all a sham from the start but we weren't to know that. There is all sorts of conflicting advice from people who are risk averse or pushing umbrella solutions.

After all the IR35 fire and brimstone that was preached by HMRC, who's to say that all these offshore loan schemes aren't going to go the same way as IR35 then?

I think the REAL reason the government is reviewing IR35 is that the cat is out of the bag and people are starting to ignoring it, thus it doesn't make as much money as before so they need to come up with another wheeze.

[ContractIn]

Join PCG and the investigation insurance is unconditional. The only requirement is that you're not already under investigation. As a member you'll also have access to more than enough information to work out your actual position and even if you can't there are plenty of members who will be able to...

Hey Mal, if you have PCG+ membership is there any benefit of also having the QDOS TLC35 insurance?

[malvolio]

Plus the 100% penalty - so actually twice that amount.

You only get penalised if you have knowingly ignored the rules. Since IR35 is so vague, you can quite rightly say you believed the rules didn't apply to this engagement. Nobody has yet been penalised

And it's Up To 100%, at the discretion of the Inspector.

[centurian]

the worst that will happen is that you have to recalculate the tax and pay up what you would have if you were inside IR35 (albeit plus interest). I can live with that.

Plus the 100% penalty - so actually twice that amount.

[northernladuk]

I feel that i am outside of IR35, but that's the problem with it all, it's not clear cut. Maybe it's just wishful thinking! I don't think it is, it's making me paranoid!

Why do you 'feel' you are outisde. You are or you arn't. You are a business with skills that the client needs. MAKE yourself outside. Change the contract, dictate the terms you work on. As someone said it is your business, don't be lead by the client. Take control and make it fit. Ok ok somecases you can't. They won't change the contract, the working practices are obviously inside but if you at least start with the right mind set you can swing some your way. To give up and just slope in to a role you will never get it right. You have some position power as they want you. Use it, don't wimp out or else you might as well sign yourself inside as you have a permie mentality!!!!

[malvolio]

I wish I'd been brave/smart enough to do that from the start of IR35, I'd have saved a frightening amount of money. I guess that has been the "success" of IR35 hasn't it. Scaring people into compliance with their vague rules....

Some of us have been saying that for ten years. Seems people are finally starting to listen!

[malvolio]

Mal , RE: PCGPlus - my agency contract depicts an out-of-IR35 contract but the agency/client contract is not so good from an IR35 point of view. Furthermore, I'm not entirely certain but my working practises might not be entirely compliant (but how would I know, is there a checklist?). So would PCGPlus still accept my contract as being "insurable"?

Join PCG and the investigation insurance is unconditional. The only requirement is that you're not already under investigation. As a member you'll also have access to more than enough information to work out your actual position and even if you can't there are plenty of members who will be able to...

[Wanderer]

The few people that have failed an IR35 case have had to recalculate the unpaid taxes "correctly" and pay over the balance, plus any interest on previous years. Nobody has been fined or otherwise penalised. AFAIK that's about four people...

So just declare yourself outside, get specialist advice if you get investigated and the worst that will happen is that you have to recalculate the tax and pay up what you would have if you were inside IR35 (albeit plus interest). I can live with that.

I wish I'd been brave/smart enough to do that from the start of IR35, I'd have saved a frightening amount of money. I guess that has been the "success" of IR35 hasn't it. Scaring people into compliance with their vague rules.

The emperor well and truly has no clothes now...