Reply to: HMRC have decided I'm inside IR35

[LisaContractorUmbrella]

Yeah that is really naive, the real truth is the legislation has failed bar a few token cases to justify someones job at HMRC. Basic economics says HMRC spend far more than they got in for IR35 and it yielded an order of magnitude less than they expected. If anyone still think IR35 is a real threat they are either simple or have a interest in people believing that (HMRC, people selling Ir35 insurance, reviews etc). If someone has figures that say otherwise then post them.

HMRC work on setting precedents either to prove their legal position or to instigate a deterrent - they don't need a huge number of wins, they just need significant wins that will influence the thinking of the Judge in the next case. IR35 may or may not work as a deterrent - that's up to individual contractors to decide but I don't think that you can say categorically that it's not a threat. There were 256 investigations last year and more planned this year and for those involved - win or lose - I can't imagine it would be a pleasant experience

[TheFaQQer]

I principally meant brollies.

Even inside IR35 you can be better off running your own limited company, and it's one less person who can disappear with the money.

That doesn't stop you running off with your own money and screwing your own company, as the "Cannot pay VAT/PAYE due to Director's Loan - Need Advice !" thread shows.

[speling bee]

So it failed on that measure also, not met anyone who declares themselves inside. Who would go to the trouble of opening a Ltd then declare inside?

I principally meant brollies.

[TheFaQQer]

I disagree. The success for HMRC of IR35 is not measured by legal wins, but by those who declare themselves inside IR35.

This. But because this is something which is unquantifiable, it means that HMRC can say "it brings in £500million a year" and get away with it.

The fact that people volunteer to work through umbrellas or their own Ltd but inside IR35 is where IR35 is a "success", but as with so many savings figures revealed by HMRC, they are all fictional anyway.

[Unix]

I disagree. The success for HMRC of IR35 is not measured by legal wins, but by those who declare themselves inside IR35.

So it failed on that measure also, not met anyone who declares themselves inside. Who would go to the trouble of opening a Ltd then declare inside?

[speling bee]

Yeah that is really naive, the real truth is the legislation has failed bar a few token cases to justify someones job at HMRC. Basic economics says HMRC spend far more than they got in for IR35 and it yielded an order of magnitude less than they expected. If anyone still think IR35 is a real threat they are either simple or have a interest in people believing that (HMRC, people selling Ir35 insurance, reviews etc). If someone has figures that say otherwise then post them.

I disagree. The success for HMRC of IR35 is not measured by legal wins, but by those who declare themselves inside IR35.

[Unix]

Even amongst IT contractors, who are generally clued up about IR35 - as that's where the initial focus was, I have seen examples of stunning naivety about IR35, even from people who had been contracting for many years.

"I never stay anywhere for longer than 2 years, so it doesn't affect me," was the most recent quote I heard

Yeah that is really naive, the real truth is the legislation has failed bar a few token cases to justify someones job at HMRC. Basic economics says HMRC spend far more than they got in for IR35 and it yielded an order of magnitude less than they expected. If anyone still think IR35 is a real threat they are either simple or have a interest in people believing that (HMRC, people selling Ir35 insurance, reviews etc). If someone has figures that say otherwise then post them.

[speling bee]

Just make a note of who they are, and if HMRC come calling, offer an easier target

I bookmark CUK threads for the same reason.

[TheFaQQer]

Even amongst IT contractors, who are generally clued up about IR35 - as that's where the initial focus was, I have seen examples of stunning naivety about IR35, even from people who had been contracting for many years.

"I never stay anywhere for longer than 2 years, so it doesn't affect me," was the most recent quote I heard

Just make a note of who they are, and if HMRC come calling, offer an easier target

[centurian]

I consider myself inside, Im a member of a team and get allocated work like everyone else. Ive met people in exact same roles who claim to be outside by virtue of not going to team meetings and telling, not asking their managers when booking leave. Social work managers dont have a clue about ir35 and if interviewed would probably drop you right in it. Tbh my sympathy is limited, my job is essential too and I dont expect tax discounts. Locums get a higher rate to make up for lackof perks.

Even amongst IT contractors, who are generally clued up about IR35 - as that's where the initial focus was, I have seen examples of stunning naivety about IR35, even from people who had been contracting for many years.

"I never stay anywhere for longer than 2 years, so it doesn't affect me," was the most recent quote I heard

[Zero Liability]

I don't buy the argument about IR35 driving people out of the industry, they just have to pay a bit more tax if their business model or working practices doesn't match that of a service provider I hink I worked it out to make a difference of about 8% to my take home money under my circumstances at the time.

I think if it is failing to drive people out, that is because they either are convinced they can pass one of the three tests, if not all, or because HMRC hasn't got anywhere near the resource to police it, due to its miserable cost-efficiency and associated yields.

[SpontaneousOrder]

I don't buy the argument about IR35 driving people out of the industry, they just have to pay a bit more tax if their business model or working practices doesn't match that of a service provider I hink I worked it out to make a difference of about 8% to my take home money under my circumstances at the time.

Do you think that higher rates would attract more people to go contracting?

[JoJoGabor]

I don't buy the argument about IR35 driving people out of the industry, they just have to pay a bit more tax if their business model or working practices doesn't match that of a service provider I hink I worked it out to make a difference of about 8% to my take home money under my circumstances at the time.

[Zero Liability]

Without a professional review, there's no point in trying to determine it, as it depends on the contract and working practices. One pillar being absent doesn't mean it is inside.

[socialworker]

Probably a social worker.

I remember our regular socialworker poster weighing up IR35 when she started - can't remember her conclusion!

Edit: http://forums.contractoruk.com/busin...-out-ir35.html

I consider myself inside, Im a member of a team and get allocated work like everyone else. Ive met people in exact same roles who claim to be outside by virtue of not going to team meetings and telling, not asking their managers when booking leave. Social work managers dont have a clue about ir35 and if interviewed would probably drop you right in it. Tbh my sympathy is limited, my job is essential too and I dont expect tax discounts. Locums get a higher rate to make up for lackof perks.