Reply to: Legal Definition of "Office Holder" ?

[LisaContractorUmbrella]

PCG have been seeking clarity for the last 12 years. Given their level of access, which is considerably higher than CC's - check out who sits on the IR35 Forum - it's quite possible we won't get any.

However, depsite many people's misgivings, HMRC are clear on what they mean by "Office Holder". This is nothing to do with IR35 as applied to us, it is actually correcting an anomalous position between IR35 and ITEPA 2003 regarding liability for NICs: the "Office Holder" is already liable for them under ITEPA but potentially not under IR35. It changes absolutely nothing in the way IR35 is being administered in general. If HMRC try it on at some point, the inevitable appeal will answer the question.

As I keep saying, Chicken Little has no place in tax accountancy. If the sky is falling - and I for one don't think it is - it's not because of this.

Where exactly are HMR&C clear on what they mean by 'office holder' - there have been two contradictory definitions posted on here

[LisaContractorUmbrella]

I had assumed that the answer to that question would have come from some influential source with direct access to senior HMRC personnel, perhaps PCG for example.

In the meantime there has been a post lodged this morning at Contractor Calculator which shows this issue is already at the forefront of a mind with more clout than I can currently muster. Its under the title: IR35 avoidance industry: when is an office holder not an office holder?

Why? Names of senior HMR&C folks are quite readily available - nothing to stop you asking the question

[malvolio]

I had assumed that the answer to that question would have come from some influential source with direct access to senior HMRC personnel, perhaps PCG for example.

In the meantime there has been a post lodged this morning at Contractor Calculator which shows this issue is already at the forefront of a mind with more clout than I can currently muster. Its under the title: IR35 avoidance industry: when is an office holder not an office holder?

PCG have been seeking clarity for the last 12 years. Given their level of access, which is considerably higher than CC's - check out who sits on the IR35 Forum - it's quite possible we won't get any.

However, depsite many people's misgivings, HMRC are clear on what they mean by "Office Holder". This is nothing to do with IR35 as applied to us, it is actually correcting an anomalous position between IR35 and ITEPA 2003 regarding liability for NICs: the "Office Holder" is already liable for them under ITEPA but potentially not under IR35. It changes absolutely nothing in the way IR35 is being administered in general. If HMRC try it on at some point, the inevitable appeal will answer the question.

As I keep saying, Chicken Little has no place in tax accountancy. If the sky is falling - and I for one don't think it is - it's not because of this.

[Precept]

You could always ask HMR&C for clarity and then you could let us all know

I had assumed that the answer to that question would have come from some influential source with direct access to senior HMRC personnel, perhaps PCG for example.

In the meantime there has been a post lodged this morning at Contractor Calculator which shows this issue is already at the forefront of a mind with more clout than I can currently muster. Its under the title: IR35 avoidance industry: when is an office holder not an office holder?

[LisaContractorUmbrella]

Twelve out of fourteen of my posts mention IR35; that is a revealing statistic with which I am only acquainted by virtue of your reference, but it does not surprise me because I recognise it as a salient insight into how economic activity in Western democracies is evolving. The growth in Contracting and temporary work has been a feature of the widespread recession.

The fact that IR35 presents a scary threat to some people is regrettable. My own philosophy is a natural ally to all business aspirants, I see in the capitalist system the most successful way yet discovered to nurture new businesses, produce wealth and to provide the taxes to support nations’ welfare states.

Any government having to fund a benefits system amid a world banking crisis and an ageing population is bound to encounter circles that cannot be squared in terms of balancing the books, it is not surprising therefore if loopholes are closed where they appear openly abused. ‘Office Holders’ has been chosen as a target for attack and I have several people who are concerned about its scope. I would be interested (as an accountant) in some clarity and so it seems would Adrian Marlowe of Lawspeed (as a lawyer).

You could always ask HMR&C for clarity and then you could let us all know

[Precept]

you are certainly very focused on your message here. It feels like scaremongering and makes me wonder who benefits.

Twelve out of fourteen of my posts mention IR35; that is a revealing statistic with which I am only acquainted by virtue of your reference, but it does not surprise me because I recognise it as a salient insight into how economic activity in Western democracies is evolving. The growth in Contracting and temporary work has been a feature of the widespread recession.

The fact that IR35 presents a scary threat to some people is regrettable. My own philosophy is a natural ally to all business aspirants, I see in the capitalist system the most successful way yet discovered to nurture new businesses, produce wealth and to provide the taxes to support nations’ welfare states.

Any government having to fund a benefits system amid a world banking crisis and an ageing population is bound to encounter circles that cannot be squared in terms of balancing the books, it is not surprising therefore if loopholes are closed where they appear openly abused. ‘Office Holders’ has been chosen as a target for attack and I have several people who are concerned about its scope. I would be interested (as an accountant) in some clarity and so it seems would Adrian Marlowe of Lawspeed (as a lawyer).

[Wanderer]

There is no need to make the cynical connection.
This IR35 issue may have obscured innocent motives - my vested interest is in clarity.

I do not have any affiliation to the type of organisation you refer to in your question.

So, a friendly question then. What do you do? Are you a contractor, a permie considering contracting or do you work for a company that provides services which may be of interest to the contractor community?

[EMEAfixer]

consistent

There is no need to make the cynical connection.

Sorry for appearing cynical, but you have made 14 other posts on CUK so far, and 12 of them have mentioned IR35 in the context that more people will find themselves inside, and the other 2 mentioned taxation and that we contractors should employ others to look after our non-core affairs. Through all 14 there were regular quotes to Lawspeed and various references that we should use outside organisations, business support, expert help, knowledgeable accountants, ....

I can't argue with some of that advice, but you are certainly very focused on your message here. It feels like scaremongering and makes me wonder who benefits.

[Precept]

Not only Lawspeed, I start to suspect that Precept has a vested interested too.

Hey Precept? Do you happen represent some organisation happy to offer services to any contractors worried about IR35?

There is no need to make the cynical connection.
This IR35 issue may have obscured innocent motives - my vested interest is in clarity.

I do not have any affiliation to the type of organisation you refer to in your question.

[EMEAfixer]

who has a vested interest?

Can't help but think that Lawspeed might have a slightly vested interest in giving a less than favourable interpretation?

Not only Lawspeed, I start to suspect that Precept has a vested interested too.

Hey Precept? Do you happen represent some organisation happy to offer services to any contractors worried about IR35?

[simondolan]

Can't help but think that Lawspeed might have a slightly vested interest in giving a less than favourable interpretation?

Your comments are appreciated and noted Mal. The Office Holder issue is, as you suggest, a possibly needless worry in the larger scheme of things for the majority of contractors/Freelancers. For those involved in interim assignments however, changes in Office Holder regulations do indeed present formidable challenges, as described in Lawspeed News | Latest News > IR35

Recent statistics show Contractor billings at a 20 month high (KPMG/REC latest report), they are even up in the public sector despite falling levels of permanent recruitment in that sphere. Other recent workforce statistics from Tarpon have also pointed to an increase in the number of people working in a temporary capacity. Office Holder assignments can therefore be expected to increase.

As Adrian Marlowe of Lawspeed points out, if Office Holder status is not confined to roles which, in your words, are essential, inherent and continuing then there is something worth thinking about, if not worrying over. Marlowe’s emphasis on the role of a project in any contractual relationship highlights a suggested solution.

[Precept]

Yes. It's not HMRC's definition, the term "Office" has a clear legal meaning in this context, hence the position of an Office Holder is equally clearly defined, if not explicitly stated.

So we - sorry, you - should all stop worrying about it. There are bigger things to argue about.

Your comments are appreciated and noted Mal. The Office Holder issue is, as you suggest, a possibly needless worry in the larger scheme of things for the majority of contractors/Freelancers. For those involved in interim assignments however, changes in Office Holder regulations do indeed present formidable challenges, as described in Lawspeed News | Latest News > IR35

Recent statistics show Contractor billings at a 20 month high (KPMG/REC latest report), they are even up in the public sector despite falling levels of permanent recruitment in that sphere. Other recent workforce statistics from Tarpon have also pointed to an increase in the number of people working in a temporary capacity. Office Holder assignments can therefore be expected to increase.

As Adrian Marlowe of Lawspeed points out, if Office Holder status is not confined to roles which, in your words, are essential, inherent and continuing then there is something worth thinking about, if not worrying over. Marlowe’s emphasis on the role of a project in any contractual relationship highlights a suggested solution.

[malvolio]

This is an interesting and possibly important assertion as regards the definition of an Office Holder. However, for it to be applicable in any assessment it mustn't contradict HMRC's own definition for IR35 purposes. Can you be sure this is the case?

Yes. It's not HMRC's definition, the term "Office" has a clear legal meaning in this context, hence the position of an Office Holder is equally clearly defined, if not explicitly stated.

So we - sorry, you - should all stop worrying about it. There are bigger things to argue about.

[Precept]

Only if the office of "Software Engineer" is an essential, inherent and continuing part of the company.

This is an interesting and possibly important assertion as regards the definition of an Office Holder. However, for it to be applicable in any assessment it mustn't contradict HMRC's own definition for IR35 purposes. Can you be sure this is the case?

[malvolio]

I did read the whole thing. The snippet I quoted was the test used in one particular court case. Another (also used to determine a case that reached the Lords) is as follows :



And it seems to me that there is nothing in that definition which prevents employment as a Software Engineer from being an office ? A person can be appointed as a SW Eng, s/he can vacate that position and a successor can (will very likely) be appointed in his/her place.

So maybe, Wanderer, it is you who needs to be spoon fed ?

Boo

Only if the office of "Software Engineer" is an essential, inherent and continuing part of the company. Most of the ones I know aren't even an inherent part of the project they're assigned to.