Reply to: I resigned, but been given an offer (IR35)

[TheFaQQer]

Having done this a lot longer than Northernlad, I struggle to understand why you would choose to make a fuss over a short term arrangement. The majority of contractors swerve IR35 rather like large numbers of people exceed 70 mph. It's a simple calculation about whether you might get caught. Except with IR35 even if they catch you they almost never prove the offence. Feel free to way up all the arguments of the barrack room lawyers on this channel but also give a thought to the practical view that many other contractors take. Put yourself in the position of the massively overworked Revenue officers with their poor systems and dreadful IT support (and remember they don't know you are a contractor without some clues) and think 'will I really pop up on their radar? And if I do will they pick me against all the other candidates?"

And you wonder why HMRC think contractors are all tax dodging scum

[WordIsBond]

Having done this a lot longer than Northernlad, I struggle to understand why you would choose to make a fuss over a short term arrangement. The majority of contractors swerve IR35 rather like large numbers of people exceed 70 mph. It's a simple calculation about whether you might get caught. Except with IR35 even if they catch you they almost never prove the offence. Feel free to way up all the arguments of the barrack room lawyers on this channel but also give a thought to the practical view that many other contractors take. Put yourself in the position of the massively overworked Revenue officers with their poor systems and dreadful IT support (and remember they don't know you are a contractor without some clues) and think 'will I really pop up on their radar? And if I do will they pick me against all the other candidates?"

So, to be clear, what you are saying is just ignore IR35 even though he knows he should be inside it. The reasoning is he probably won't be caught and if he is caught he's got a chance of beating the rap.

So for a short term gig that will cost him almost nothing to operate within the law, you are suggesting he break the law, which will then result in interest but also probably penalties since he has no way to argue that he took reasonable care. And if he cheats on this one, then they'll see him as a cheater and drag him through investigations of any other contract he gets, too, and he'll be presumed guilty on those.

And he has to live with fear of investigation for six years.

Leaving aside the ethics of the matter entirely, this is an extremely stupid way to run a business. Risk all kinds of legal/tax problems for minimal benefit.

[VectraMan]

The thing is, you won't find anything official that says "If thou an employee were, shalt thou inside IR35 be". You'll find a lot of conjecture, and waffle, and most of what you google will lead you back to this forum, but no hard and fast rules that you are breaking. I was tempted, but decided I a) CBA'd, and b) felt it was a good excuse to make some hefty pension contributions which is a much less risky way to avoid tax.

The other thing is, it's April. You don't need to make a decision until either the end of your company year or next April.

[northernladuk]

So for such a short term why not do it properly and just carry on. Go brolly, do 2 months and then go contracting after that. Doesn't matter who does what, it's your risk and your problem. Comparing other people's situations doesn't really justify your risk.


Maybe fair enough when we know the risks, fallout and so on. But to a tell newbie it's OK to commit evasion/aggressive avoidance, whichever it is, for the sake of two months. Really?

[Cirrus]

Interesting. So you mean to say that raising the IR35 issue myself over 2 months of work will perhaps draw unnecessary attention?
.

Having done this a lot longer than Northernlad, I struggle to understand why you would choose to make a fuss over a short term arrangement. The majority of contractors swerve IR35 rather like large numbers of people exceed 70 mph. It's a simple calculation about whether you might get caught. Except with IR35 even if they catch you they almost never prove the offence. Feel free to way up all the arguments of the barrack room lawyers on this channel but also give a thought to the practical view that many other contractors take. Put yourself in the position of the massively overworked Revenue officers with their poor systems and dreadful IT support (and remember they don't know you are a contractor without some clues) and think 'will I really pop up on their radar? And if I do will they pick me against all the other candidates?"

[VectraMan]

I did Friday to Monday. It was meant to be for 3 months "whilst we look for someone else", but turned out to be 15 months before I'd had enough. So that's something to think about.

I thought long and hard, but couldn't find any kind of justification for being outside IR35. I didn't "declare" anything; I've no idea how you would. Just made sure I paid 95% as salary/pension in the tax year I earned it. There's really no point messing about with deemed payments; you won't be any better off for it.

[TheFaQQer]

Fair enough. Thanks.
However, if you didn't declare a contract as inside, but paid sufficient in salary and/or pension, it wouldn't really matter, as there would be no more to pay. No?

I guess not. I'm not sure if there is a penalty for not completing your SA accurately even if the result is that it makes no difference.

[fidot]

Yes. You need to declare that part of your work is inside IR35 when you complete your self assessment.

Fair enough. Thanks.
However, if you didn't declare a contract as inside, but paid sufficient in salary and/or pension, it wouldn't really matter, as there would be no more to pay. No?

[TheFaQQer]

If you do this ^^^, is there a need to declare the contract as inside IR35 because no deemed payment is due? If that is the case, then there is no flag being raised either.

Yes. You need to declare that part of your work is inside IR35 when you complete your self assessment.

[WordIsBond]

I went Friday to Monday, treated it as inside IR35, and every other contract I've had has been outside. I still keep that one going (10 hours a month, rolled over every six months) and keep it inside. I could probably argue outside successfully, it's really no different from any of my other contracts except the way it started. But it's not worth the hassle, since pension and salary eat it all anyway.

My other contracts have never been investigated, so I don't really think having one contract inside and others outside raises red flags. If anything, it makes it easier to claim you are a decent law-abiding bloke who follows the law when it applies, and they really should go chase somebody else who is cheating.

[fidot]

Correct - the entire income from the contract is paid as salary. From an accounting / investigation point of view, it would be cleaner if your salary is paid such that it clearly relates to that contract though.

If you do this ^^^, is there a need to declare the contract as inside IR35 because no deemed payment is due? If that is the case, then there is no flag being raised either.

[Sausage Surprise]

BBC? I'm not sure I follow..

It's something that happens a lot there apparently. People leave, have a leaving party and are back in a couple of months as a freelancer.

[BrilloPad]

I was under the impression that IR35 status was determined from contract to contract.

[northernladuk]

Interesting. So you mean to say that raising the IR35 issue myself over 2 months of work will perhaps draw unnecessary attention?
I have every intention of working inside the legislation after this period anyway.

He's talking bollocks. Ignore him.

[j66]

It's up to you but I would personally deffo steer clear of IR35 issues. People on here will tell you that is in some way dangerous but in truth they don't know from experience. There was a bit of a Fri-to-Mon connotation when IR35 started but essentially the Revenue are after all people who are not paying PAYE and F-T-Ms are a small proportion. If you're only going to be there for a limited period, waving any IR35 flags seems like more risky than turning a blind eye.

Interesting. So you mean to say that raising the IR35 issue myself over 2 months of work will perhaps draw unnecessary attention?
I have every intention of working inside the legislation after this period anyway.