When it comes to IR35 Hindsight is a wonderful thing!

[Jessica@WhiteFieldTax]

The key problem for contractors is most of them, me included, are bums on seats and with some clever argument or mainly simply by not being spotted you can get away with it. The arguments for being outside are usually somewhat contrived but enough to convince an inspector or a judge, Every contractor has a substitution clause, but be honest, would it be there if it wasn´t for IR35. The 4 week argument is just one more argument to push a contractor off that knife edge, It is always going to be a nail-biter, unless you really are outside, i.e. work in your own office, fixed price projects etc.

Concur - I don't like seeing notice clauses in contracts, but I never seem them as the most significant factor, just another issue to add weight one way or the other. Alas the tribunals may sometimes focus on them in a slightly maverick way.

Also there is always the trade off of a good IR35 clause versus commercial protection - often not easy bed fellows.

[LisaContractorUmbrella]

The key problem for contractors is most of them, me included, are bums on seats and with some clever argument or mainly simply by not being spotted you can get away with it. The arguments for being outside are usually somewhat contrived but enough to convince an inspector or a judge, Every contractor has a substitution clause, but be honest, would it be there if it wasn´t for IR35. The 4 week argument is just one more argument to push a contractor off that knife edge, It is always going to be a nail-biter, unless you really are outside, i.e. work in your own office, fixed price projects etc.

In a nutshell

[BlasterBates]

The key problem for contractors is most of them, me included, are bums on seats and with some clever argument or mainly simply by not being spotted you can get away with it. The arguments for being outside are usually somewhat contrived but enough to convince an inspector or a judge, Every contractor has a substitution clause, but be honest, would it be there if it wasn´t for IR35. The 4 week argument is just one more argument to push a contractor off that knife edge, It is always going to be a nail-biter, unless you really are outside, i.e. work in your own office, fixed price projects etc.

[Ignis Fatuus]

Certainly sounds like the sort of thing he would say

Well, he'd probably get the logic right: a white horse attempting to avoid White Horse Tax by adding black stripes.

[LisaContractorUmbrella]

Was it Malvolio who said that HMRC would consider a zebra to be a black horse attempting to avoid White Horse Tax?

Certainly sounds like the sort of thing he would say

[Ignis Fatuus]

If you work on the assumption that HMR&C have 2 categories only - Employees or Businesses who employ employees - Ltd Co contractors don't fit into either box which annoys HMR&C but rather than legislate to accommodate them they just keep trying to force them into one or other category; I am not sure what could be done to stop them.

Was it Malvolio who said that HMRC would consider a zebra to be a black horse attempting to avoid White Horse Tax?

[LisaContractorUmbrella]

Nice rant

Whole problem with IR35 is that HMR&C didn't explain their intentions properly in the beginning which resulted in woolly legislation which was open to interpretation by lawyers and accountants (sound familiar?). Therefore, over the years they have kept moving the goalposts, as they have with employment law issues surrounding the brolly industry, to a point where even the lawyers and accountants are confused. The recent change to IR35 for instance all seems to hinge on one phrase - office holder which has judicial definition but no statutory definition and is therefore (as usual) open to interpretation.

If you work on the assumption that HMR&C have 2 categories only - Employees or Businesses who employ employees - Ltd Co contractors don't fit into either box which annoys HMR&C but rather than legislate to accommodate them they just keep trying to force them into one or other category; I am not sure what could be done to stop them.

[centurian]

Hi, welcome to the boards

I could ask as a contractor how am I suppose to know, or influence a contract between the client and the agent (which I am not allowed to see), not to have such a clause in a contract now, which might be ripped apart in 5 years time?

Short answer - you can't. This is one risk about IR35 you just have to shoulder.

It need not be a showstopper - any judgement will be based on a range of factors, not just the upper contract. So you can mitigate the risk by making sure that everything else is correctly.

But ultimately you either have to take the chance, or pay up and go inside IR35

[NotAllThere]

Now in Accounting / Legal.

[original PM]

Blah
I wonder if anyone seen any well paid Lawyers or Accountants point this clause out in 2005, 2006, or maybe even this decade!
Yadda

A lawyer or accountant gives advice and you pay for it - if you take it any repercussions are on you.

Lawyers a lying slimy fu<kwits

PS welcome to General!

[DaveB]

Afternoon All, in particular our law friends.

I have recently been reading various "Full Analysis" columns discussing the findings of Special Commissioners. One that caught my attention is a reference to not having a "four week termination" clause (ICL - losing IR35 appeal).
The contract refers back to 2005.

I could ask as a contractor how am I suppose to know, or influence a contract between the client and the agent (which I am not allowed to see), not to have such a clause in a contract now, which might be ripped apart in 5 years time?

I wonder if anyone seen any well paid Lawyers or Accountants point this clause out in 2005, 2006, or maybe even this decade!

How does pointing out the lack of foresight help the contracting community now? Maybe a better use of time would be an article on how to contact the Law society stating bad advice, or maybe how to get the client to pay the Employers NI (if given contractor is an employee then they must be considered to be the employer right?, and as a good gesture they could always donate the holiday pay and those iritating bank holidays). Thats a thought, is anyone inside IR35 an employee? Personally I would pay for future proofing advice and help, membership of PCG being such an example. Saying that how would we know it would be future proof!

By the time these new clauses become targets for Judges and the likes it is quite likely contractors might be the only people actually collecting and paying tax (We seem to be one of only a few ways of getting money out of the big companies and passing it on as tax, and probably pay more tax outside IR35 than the apparent equivalent employee on half the salary).

Appologies for the rant.

You probably want to ask the Mods to move this to Legal/Accounting before the usual supects arrive and the feeding frenzy starts. In the meantime...

Small point, but if found to be within IR35 you are deemed to be an employee of your Ltd Company, not the end client, hence the application of employers and employees NI to your co. One reason for IR35 is to establish whether you are really in business in your own right or whether the Ltd Co. structure is an artificial means to avoid paying the NI and Income Tax on money that would otherwise have been paid as salary.

IR35 is a mess and always has been. The reason there was no better guidance 7 years ago is that no-one had got around to working out what that guidance should be or how the law should be applied.

Apply the guidance we have now and don't just focus on the contractual arrangements. It's well understood that this is only part of the equation and working practices are just as important. You may still have a notice period in there somewhere, but that doesnt mean the client has to pay you if there is no work available. Large organisations regularly send their contractors home without pay if work dries up or over the holiday season without terminating their contracts, in order to save cash. They don't do that to the permies. As an indicator of lack of Mutuality of Obligation that's just as good as a lack of notice period in a contract.

[Paddy]

Good points well made. But you have strayed into General. This type of thing is about as scarce as hobby-horse sh1t in here.
We are more about pointless argument and spurious waffle in these here parts!

HTH

No good without pictures of women.

[shaunbhoy]

Afternoon All, in particular our law friends.

I have recently been reading various "Full Analysis" columns discussing the findings of Special Commissioners. One that caught my attention is a reference to not having a "four week termination" clause (ICL - losing IR35 appeal).
The contract refers back to 2005.

I could ask as a contractor how am I suppose to know, or influence a contract between the client and the agent (which I am not allowed to see), not to have such a clause in a contract now, which might be ripped apart in 5 years time?

I wonder if anyone seen any well paid Lawyers or Accountants point this clause out in 2005, 2006, or maybe even this decade!

How does pointing out the lack of foresight help the contracting community now? Maybe a better use of time would be an article on how to contact the Law society stating bad advice, or maybe how to get the client to pay the Employers NI (if given contractor is an employee then they must be considered to be the employer right?, and as a good gesture they could always donate the holiday pay and those iritating bank holidays). Thats a thought, is anyone inside IR35 an employee?

Personally I would pay for future proofing advice and help, membership of PCG being such an example. Saying that how would we know it would be future proof!

By the time these new clauses become targets for Judges and the likes it is quite likely contractors might be the only people actually collecting and paying tax (We seem to be one of only a few ways of getting money out of the big companies and passing it on as tax, and probably pay more tax outside IR35 than the apparent equivalent employee on half the salary).

Appologies for the rant.

Good points well made. But you have strayed into General. This type of thing is about as scarce as hobby-horse sh1t in here.
We are more about pointless argument and spurious waffle in these here parts!

HTH

[paulcarolyn]

Afternoon All, in particular our law friends.

I have recently been reading various "Full Analysis" columns discussing the findings of Special Commissioners. One that caught my attention is a reference to not having a "four week termination" clause (ICL - losing IR35 appeal).
The contract refers back to 2005.

I could ask as a contractor how am I suppose to know, or influence a contract between the client and the agent (which I am not allowed to see), not to have such a clause in a contract now, which might be ripped apart in 5 years time?

I wonder if anyone seen any well paid Lawyers or Accountants point this clause out in 2005, 2006, or maybe even this decade!

How does pointing out the lack of foresight help the contracting community now? Maybe a better use of time would be an article on how to contact the Law society stating bad advice, or maybe how to get the client to pay the Employers NI (if given contractor is an employee then they must be considered to be the employer right?, and as a good gesture they could always donate the holiday pay and those iritating bank holidays). Thats a thought, is anyone inside IR35 an employee?

Personally I would pay for future proofing advice and help, membership of PCG being such an example. Saying that how would we know it would be future proof!

By the time these new clauses become targets for Judges and the likes it is quite likely contractors might be the only people actually collecting and paying tax (We seem to be one of only a few ways of getting money out of the big companies and passing it on as tax, and probably pay more tax outside IR35 than the apparent equivalent employee on half the salary).

Appologies for the rant.