Reply to: New HMRC campaign targeting clients is revealed

[Zero Liability]

Since I've met Engineers, Graphical Designers, Marketing Consultants, Management Consultants, Accountants and a few others who work in the way we do that isn't going to work.

Yup, and add to that banks and telecoms, who are eager to take on experienced individuals as contractors for functions they would historically use permies.

[DonkeyRhubarb]

Even if there was a way to identify the hundreds of thousands of potential IR35 flouters, what are they going to do? Take them all to court? IR35 is unenforceable and they know it.

[SueEllen]

Ok, check the VAT registration then and pick all in IT Consultancy. How's that?

Since I've met Engineers, Graphical Designers, Marketing Consultants, Management Consultants, Accountants and a few others who work in the way we do that isn't going to work.

The PGC itself does a survey every year to find out what industries it's members are in and not everyone running limited that could fall under IR35 is in IT.

[Archangel]

Ok, check the VAT registration then and pick all in IT Consultancy. How's that?

Works for me

[northernladuk]

This would just create an enormous list of no wins. Just about every small business works on this model eg Shops photographers, franchise holders, more than one man band plumbers, electricians etc etc. these will not be subject to ir35. believe it or not there are businesses out there that are not I.t. Contractors

Ok, check the VAT registration then and pick all in IT Consultancy. How's that?

[Archangel]

Well we kinda knew HMRC would be trying something to focus on independent contractors but this seems to be just another cock up on their part. Surely it would have been much easier just picking on everyone husband and wife company paying themselves under the limit for NI. Nice easy wins there surely.

This would just create an enormous list of no wins. Just about every small business works on this model eg Shops photographers, franchise holders, more than one man band plumbers, electricians etc etc. these will not be subject to ir35. believe it or not there are businesses out there that are not I.t. Contractors

[Zero Liability]

The point is that if HMRC are writing out to large companies that they suspect use a lot of contractors, the chances are that the company will use an agency to source their contractors. In that scenario the agency is the supplier and if there are a good few contractors then the fees paid will exceed the upper limit and nothing will need to be disclosed.

Of course, if you use a smaller agency or go direct then the above won’t apply…further supporting PCGs point about penalising smaller businesses.

Given the amounts involved and wording of the OP, it sounds like this is correct. I do wonder why, though. Are they concerned larger agencies will be likelier to issue contracts that are IR35 compliant and better positioned to communicate with their clients so that they remain silent on the matter? They may be stepping into a mare's nest since contractors who go direct probably have a bit more experience than most, as well as an awareness of how to deal with IR35.

It could be that NickNick is right and this is a data gathering exercise.

[The Spartan]

They probably can, via the good offices of GCHQ !

Very true, but then I'm sure they could be challenged on how they obtained the list without consent

[aoxomoxoa]

The PCG isn't a charity, so HMRC can't get their membership list.

They probably can, via the good offices of GCHQ !

[MyUserName]

My guess, and this is just a guess, is that they would be looking to replace IR35 with something else and this is part of a preliminary data gathering excercise to work out the size of the target.

Oh ... rats ... I quite like IR35 - I like the vooshing noise it makes as it flies passed without touching me

[NickNick]

Hang on - if they write to a client and ask how their contractors are paid then they will reply that the pay X a day/hour to agency X.

If they write to agency X and ask how the contractors are paid then they will say we pay them Y per day/hour.

How does this give any information about IR35 liabilities or have I missed the point?

My guess, and this is just a guess, is that they would be looking to replace IR35 with something else and this is part of a preliminary data gathering excercise to work out the size of the target.

[MyUserName]

Hang on - if they write to a client and ask how their contractors are paid then they will reply that the pay X a day/hour to agency X.

If they write to agency X and ask how the contractors are paid then they will say we pay them Y per day/hour.

How does this give any information about IR35 liabilities or have I missed the point?

[Craig at Nixon Williams]

The point is that if HMRC are writing out to large companies that they suspect use a lot of contractors, the chances are that the company will use an agency to source their contractors. In that scenario the agency is the supplier and if there are a good few contractors then the fees paid will exceed the upper limit and nothing will need to be disclosed.

Of course, if you use a smaller agency or go direct then the above won’t apply…further supporting PCGs point about penalising smaller businesses.

[TheFaQQer]

I would have thought that the supplier to the end client would be the agency...

Maybe it's a ploy from larger agencies - avoid the small ones and going direct, and we won't have to tell HMRC your details...

[tractor]

I would have thought that the supplier to the end client would be the agency...

Except for those that have a direct relationship