Reply to: Second Company - IR35?

[TestMangler]

Having another company of which you are a director might lend weight to an argument that you are a businessman. I don't see how it can address anything to do with whether during one contract I worked on for another company, I was a disguised employee or not.

OK, well, the way it was explained to me was this:

Contractor A (under investigation) has a standard agency contract with Bank A, through agency A to deliver C++ development, through Contractor A Ltd

Contractor B (Under investigation) has a standard agency contract with Bank B, through Agency B to deliver Test Management services to client B through Contractor B Ltd. Contractor b is also sole director of Contractor B Web Hosting Ltd, Contractor B Computer Hardware Ltd and Contractor B Anal Beads Ltd. All four companies are currently trading under the directorship of Contractor B.

I never said it was a 'get out of Ir35 scenario'. I said it lends weight in the same way as other secondary factors do.

Edit - See this 'single contract' thing you all go on about ? When HmRC are investigating you they don't investigate one contract. It may start that way, or even end that way, but they will investigate ALL your contracts over a period of time.

[Clare@InTouch]

Having another company of which you are a director might lend weight to an argument that you are a businessman. I don't see how it can address anything to do with whether during one contract I worked on for another company, I was a disguised employee or not.

Totally agree. It shows a potentially diverse range of work which could in some cases help show you're a genuine business, but it doesn't determine the status of any individual contract.

[DirtyDog]

Despite the supposed 'contract by contract' nature of IR35 investigations, there is the over riding question of 'being in business'. Having another company of which you are a director will lend a very small amount in your favour.

Having another company of which you are a director might lend weight to an argument that you are a businessman. I don't see how it can address anything to do with whether during one contract I worked on for another company, I was a disguised employee or not.

[jamesbrown]

So you're saying they established the nature of services I supply through more than one company for no reason ?

Or, they established it and submitted it because it carried 'some' weight ?

Make your mind up luv

First question, probably, you picked them

Seriously, though, perhaps you should ask them and report back. Had this case gone anywhere, it wouldn't have had any bearing whatsoever on the outcome.

[TestMangler]

The Barclays comment was obviously facetious, but I'll be sure to reinforce with additional smileys for you in future. HTH.

The bumf you talk about above w/r to your business background was, more than likely, used by your legal reps to build up a full picture of you and your company (something any legal reps would want to do), in order to fully establish the nature of the services you provide (i.e. bum on seat, readily available at the end-client, versus specialist services), but don't let me interrupt your extrapolating

So you're saying they established the nature of services I supply through more than one company for no reason ?

Or, they established it and submitted it because it carried 'some' weight ?

Make your mind up luv

[jamesbrown]

And the Barclays example is one of the dumbest things I've ever seen posted on here. And I read SY01's posts !

Most of what you are saying is basically correct, but lots of secondary factors are taken into account. Have you ever seen a list of questions posted to a client during an IR35 enquiry ? Badge colour, parking spaces, canteen prices. I could go on.

When a case is decided on balance of probability, all factors are important, however minor. Establishing the general business behaviour of the contractor can (and does) carry some weight.

The Barclays comment was obviously facetious, but I'll be sure to reinforce with additional smileys for you in future. HTH.

The bumf you talk about above w/r to your business background was, more than likely, used by your legal reps to build up a full picture of you and your company (something any legal reps would want to do), in order to fully establish the nature of the services you provide (i.e. bum on seat, readily available at the end-client, versus specialist services), but don't let me interrupt your extrapolating

[Old Greg]

IR35 risk is not just the risk of losing if investigated but also the risk of an investigation being started in the first case and then pursued. Do we know practically whether being director of another company is a factor?

Also, practically speaking, I would be carefully making a record of all the times when you advise your public sector client that you are unavailable for work because (and you're not telling the client this because but you are keeping the record) you are undertaking work for the other company.

[TestMangler]

Eighteen investigation came to an end with a positive outcome for me, without a trip to the commissioners.

Call it dropped or won, it's a win to me.

Note - Cleverly deleted post where he call ME a liar - knob !

[TestMangler]

If the case was dropped; how do you know if that was a mitigating circumstance?

You could be a director of a dozen companies, but if one contract at one company falls within IR35 and you paid yourself outside of IR35 it simply doesn't change the odds of investigation or the chance of avoiding a tribunal finding in HMRC's favour.

So the advisors who handled and won the case (and do lots of them), clearly wasted hours of their own time and mine with these submissions then. I'm really sorry you weren't there to support me during that difficult time

[GazCol]

IR35 has nothing to do with the legitimacy of either company

When I had mine (the only one I've ever worked on), my specialist advisors seemed to think that my business background and other companies that I ran at the time DID have a bearing and therefore collected and submitted a fair amount of info on this, prior to the case being dropped by HMRC.

I'm glad I followed their advice. (Despite them being clearly wrong in your eyes).

If the case was dropped; how do you know if that was a mitigating circumstance?

You could be a director of a dozen companies, but if one contract at one company falls within IR35 and you paid yourself outside of IR35 it simply doesn't change the odds of investigation or the chance of avoiding a tribunal finding in HMRC's favour.

[TestMangler]

I know - I didn't claim it did; my point, as you asked me to clarify, is being a director of one or more limited company has no bearing on an IR35 case which is contract specific.

The two are mutually exclusive - the business activities of company B have no reflection on the legitmacy of company A.

Just the one, thanks.

IR35 has nothing to do with the legitimacy of either company

When I had mine (the only one I've ever worked on), my specialist advisors seemed to think that my business background and other companies that I ran at the time DID have a bearing and therefore collected and submitted a fair amount of info on this, prior to the case being dropped by HMRC.

I'm glad I followed their advice. (Despite them being clearly wrong in your eyes).

[GazCol]

LOL, the BET have no basis in law.

And how many IR35 enquiries have you worked on ?

I know - I didn't claim it did; my point, as you asked me to clarify, is being a director of one or more limited company has no bearing on an IR35 case which is contract specific.

The two are mutually exclusive - the business activities of company B have no reflection on the legitmacy of company A.

Just the one, thanks.

[TestMangler]

That's a bit of a double negative really isn't it? IR35 cases are decided on a contract basis and the question of "Do you happen to be a director of another limited company" doesn't appear on the BET.

LOL, the BET have no basis in law.

And how many IR35 enquiries have you worked on ?

[GazCol]

Case evidence for this claim ??

That's a bit of a double negative really isn't it? IR35 cases are decided on a contract basis and the question of "Do you happen to be a director of another limited company" doesn't appear on the BET.

[TestMangler]

Indeed - being a director of another company has no bearing on IR35 or the HMRC's BET.

Case evidence for this claim ??