IR35 (again ;) ) and the points system

[northernladuk]

I know a lot of people here will howl that it's just a sham to try and help your tax dodging credentials but I know people who commute to an office because they cannot bring themselves to work at home. They are absolutely adamant that they need the physical and psychological separation of "work" and "home" to maintain focus when they are working and conversely to switch off when they are not working. Some of these people are permies and directors of small/medium sized businesses so they have no tax advantage to gain from having an "office" rather than working from home - indeed it costs them money and time commuting.

But unforunately the OP has stated he is doing it to get the points for IR35 so by his own admission it is a sham. If he needed an office he wouldn't have one, if he didn't he wouldn't. To get one just to get the points up but can possibly use it can't be anything but a sham.

[BlasterBates]

If you are going to use it regularly then indeed this will be a big help.

When HMRC make an initial enquiry they won't look at anything in depth, they'll make a decision based on documentation you've sent. If you can demonstrate having an office this will make it less likely they'll persue the enquiry.

Obviously if they did look at it in depth they might decide that there are other factors that are more important and disregard it. If you are actually using the office it obviously isn't a sham, at worst it would be seen as unimportant in view of other factors. In fact regardless of how often you use the office they can never say it's a "sham", in the same way they could attack an offshore loan, that's your business decision to have an office when you choose to work in it is your affair, as long as you're truthful answering questions about how you use it.

IR35 investigations are time consuming for HMRC so anything that sets you aside from other soft targets is beneficial. Lets face the inspector is probably going to checking up on whole load of small companies so anything that gives him the impression it aint going to yield anything will make hime likely drop your file and persue another one.

[Wanderer]

Does anyone think this is just a waste of money or would having real company premises other that the office space at home be a benefit?

It would be beneficial for me as it has a speedier broadband connection, my own secretary, etc. (about 15/20 small office based companies live in one site).

I know a lot of people here will howl that it's just a sham to try and help your tax dodging credentials but I know people who commute to an office because they cannot bring themselves to work at home. They are absolutely adamant that they need the physical and psychological separation of "work" and "home" to maintain focus when they are working and conversely to switch off when they are not working. Some of these people are permies and directors of small/medium sized businesses so they have no tax advantage to gain from having an "office" rather than working from home - indeed it costs them money and time commuting.

If that is genuinely how you prefer to work and you would consider renting the office regardless of the IR35 status then go ahead and do it. Don't let the tax man drive the way you operate your business and treat the fact that it may tip you outside IR35 as purely incidental.

If you're going to do it then do it properly though and make sure you have some sort of record of you using the premises on a weekly basis, records of meetings with people there etc.

[DaveB]

Hi all

I was wondering about the exciting (newish) rating system and decided to rank myself to see if the score really stacked up to my outside IR35 view of my life!

I score a massive 12 points, but have a fairly day way to make this 22 points by going and renting an office, which I would then use about once a week when I was not on clients site in UK or abroad.

Now, this is a fairly cheap option to get the 10 points.

The company registered office would remain at home address.

Does anyone think this is just a waste of money or would having real company premises other that the office space at home be a benefit?

It would be beneficial for me as it has a speedier broadband connection, my own secretary, etc. (about 15/20 small office based companies live in one site).

Thoughts please - as always I expect high quality ones!!

Cheers

The points system is largely irrelevent, whatever you score on these tests the law hasn't changed, IR35 cases are judged on a contract by contract basis. Despite what HMRC are trying to say you can't treat it as a blanket assesment. You score is irrelevant if it ever comes to court, and provided your contracts and working practices are sound you should be able to defend yourself with the help of the PCG+/Abbey/QDoS insurances to cover your legal costs.

[BolshieBastard]

If this agency wasn't causing me serious blood pressure issues, I might actually be laughing.

They've provided one of the worst contracts ever seen. It actually has a 'NO SUBSTITUTION CLAUSE' and some other hilarious tulip and the they go and send me that crap above because I questioned their Opt Out form which says "I am Opting Out of my own free will" and comes attached to an email saying 'Please sign the attached Opt Out form. Please note that this is compulsory'

C~~TS !!!!

PM sent

[TestMangler]

See, the agents are good for something.... even if it is just for a big of a giggle

If this agency wasn't causing me serious blood pressure issues, I might actually be laughing.

They've provided one of the worst contracts ever seen. It actually has a 'NO SUBSTITUTION CLAUSE' and some other hilarious tulip and the they go and send me that crap above because I questioned their Opt Out form which says "I am Opting Out of my own free will" and comes attached to an email saying 'Please sign the attached Opt Out form. Please note that this is compulsory'

C~~TS !!!!

[northernladuk]

Breaking news chaps, I've got the PERFECT MAGIC BULLET solution to the IR35 problem. All you have to do is Opt Out !! here is an excerpt from a mail I got from an agent today:

"We have provided a contract with an ‘opt-out’ agreement due to most of our contractors having limited companies and wanting to remain outside IR35. I have been speaking to our Legal Team and if you would prefer to ‘opted-in’ this can be arranged, however, you will then be inside the scope of IR35 and wont reap tax benefits."


See, if only we'd known that, all this farting around with working practices and contracts wouldn't have been required.

See, the agents are good for something.... even if it is just for a big of a giggle

[TestMangler]

Breaking news chaps, I've got the PERFECT MAGIC BULLET solution to the IR35 problem. All you have to do is Opt Out !! here is an excerpt from a mail I got from an agent today:

"We have provided a contract with an ‘opt-out’ agreement due to most of our contractors having limited companies and wanting to remain outside IR35. I have been speaking to our Legal Team and if you would prefer to ‘opted-in’ this can be arranged, however, you will then be inside the scope of IR35 and wont reap tax benefits."


See, if only we'd known that, all this farting around with working practices and contracts wouldn't have been required.

[JonSmile]

Hi

Thanks for the answers.

I think that if I can justify the recent change in company policy and the need for the office then it may seem less as just having an office for the fun of it.

If I wanted to gain the points I would just splash out in adverts. Selling my services in a professional mag would burn £1k easily.

So my (legitimate) reason is that as just moved home, the spare room / office is no more so need somewhere other than the kitcheen table to do accounts/ design work etc.

[northernladuk]

Interesting question and we have wondered the same thing. Provided the "office" is legitimate and the contractor does actually work in/on the the premises surely this counts?

It's not like hiring a glorified cupboard just as a mail delivery address?

Frankly given the mess the IR35 legislation is in we are glad we aren't contractors...

But it is not legitimate. If it was they would already have one, which HMRC is aware of hence adding it in to their questions to try and catch us out.

[Safe Collections]

Interesting question and we have wondered the same thing. Provided the "office" is legitimate and the contractor does actually work in/on the the premises surely this counts?

It's not like hiring a glorified cupboard just as a mail delivery address?

Frankly given the mess the IR35 legislation is in we are glad we aren't contractors...

[LisaContractorUmbrella]

Agree with NLUK - even HMR&C would see through this and they're not that bright

[northernladuk]

Waste of money, particularly if it isn't going to be the registered office. HMRC will see straight through it.

Having it in as a question is one thing. Fudging it just for points is another. They are not stupid and know everyone will try it.

[JonSmile]

Hi all

I was wondering about the exciting (newish) rating system and decided to rank myself to see if the score really stacked up to my outside IR35 view of my life!

I score a massive 12 points, but have a fairly day way to make this 22 points by going and renting an office, which I would then use about once a week when I was not on clients site in UK or abroad.

Now, this is a fairly cheap option to get the 10 points.

The company registered office would remain at home address.

Does anyone think this is just a waste of money or would having real company premises other that the office space at home be a benefit?

It would be beneficial for me as it has a speedier broadband connection, my own secretary, etc. (about 15/20 small office based companies live in one site).

Thoughts please - as always I expect high quality ones!!

Cheers