Reply to: termination clause

[backgetyou]

but I was dealing with businesses not support monkeys hiding from the tax man by using a Ltd (which if we are honest is what most IT contractors are)

Very well put.

[Sockpuppet]

No it won't. If I am employed to perform a function for five days in Newcastle and I live in Liverpool. I drive all the way there book into my hotel and turn up at the agreed time but the client says sorry we cant do the work this week for this reason I am supposed to say dont worry I dont want the tax man chasing me we will call it quits.

No, then you would be justified in charging due to late cancellation. My original point was this: A notice period is naff all. If you are paid "per unit" i.e. by the hour or day and the client tell you to take a hike then they do not need to pay you.

You have not performed those services. No supply has taken place so no charge can be levied.

They are under no obligation to supply you with work. If they are then that is MOO and you are a disguised employee. Whether you think this is fair or not is immaterial HMRC will use this to classify you as a disguised employee and ask for more tax.

If I employ a serviceman and he turns up but cant do the work as I changed my mine he will charge a call out charge. For this all he will have done is turn up the call out charge can disproportiante but the IR wont say to him you are not self employed now as you got paid nor nowt. Get real, most tradesman try and get paid for nowt.

Ok, you take your car to a garage. They charge you to look at it (say £50) you tell them that the problem needs sorting. They phone back and say the parts are a grand..you scarp the car. By your reckoning you'd want to pay for the parts because you'd previously said you want it fixing.

Clearly you have no PM experience, you often have to pay a third party for sitting on their butts if a dependency is stalled. What if I work in support and I have no calls do you think you should not be paid?

Wow. You clearly don't know me. I'll give you a starter for ten. Yes I am a PM and a damn good one - the budget for my last role was sizeable.

I'll apologise because we have differing ideas about what a business and business risk are. Admittedly I was working with the client global sourcing initiative that gave me a power trip but I was dealing with businesses not support monkeys hiding from the tax man by using a Ltd (which if we are honest is what most IT contractors are)

The Inland Revenue would not even have a clue that you were being paid for not supplying anything unless you told them anyway. The Inland Revenue look at your whole working process and will only make deeper investigations if they see something wrong and that something has SIGNIFICANT value to it and the chances of recovery make it worth following up.

Or unless they asked the client. If you think that HMRC are going to stop just because something is "not worthwhile" then you are mistaken. I has a conversation with one of the highly recommended IR35 contract lawyers and they were defending a dental nurse that was being chased for £600.

She has legal fee protection, ir35 safe contract etc.

[Ardesco]

Each contract assessed individually is only one component of an investigation as I stated. If I have one term that points to self employment in one contract, working practice points to self-employed. The other 40 terms point to self employed, the other 50 contracts point to self-employed you should be deemed as fully compliant, that is if you are investigated.

In an IR35 investigation each individual contract will be investigated individually. If you have 50 contracts that point to self employed, and one contract that points to IR35 caught you will be deemed IR35 caught for that one contract and all of the funds that have gone into the company from that contract will be subject to tax and NI as if you had paid it all to yourself as wages.

If this contract is 90% of the income for that year you are probably going to have a bad year

HTH

[DiscoStu]

Each contract assessed individually is only one component of an investigation as I stated. If I have one term that points to self employment in one contract, my working practice points to self-employed. The other 40 terms point to self employed, the other 50 contracts point to self-employed you should be deemed as fully compliant, that is if you are investigated.

Turning to this, you have not been investigated how long have you contracted for? Those people that were investigated how many times have they been investigated?

Give it up, you're getting boring now.

[backgetyou]

Not speaking from personal experience, but I know a couple of people who have been through them. Aspect investigation they weren't interested in contracts specifically just a bunch of documents for a set period so they could check that the paperwork matched the accounts.


I know that the contract is only half the game, but it is an important half. If the contract is IR35 caught you are caught full stop. It doesn't matter what your working practices are like if the contract is caught so IMHO it is very important that the contract is IR35 complient.

Once you have got over that initial hurdle you then need to start worrying about working conditions.



Each contract is asessed individually. You will get caught by IR35 on a contract by contract basis you can have 3 concurrent contracts running at the same time and be outside IR35 for two of them and caught for one of them. The above example implies you don't fully understand the process, you cannot get out of IR35 by having most of your contracts deemed outside IR35.

Each contract assessed individually is only one component of an investigation as I stated. If I have one term that points to self employment in one contract, working practice points to self-employed. The other 40 terms point to self employed, the other 50 contracts point to self-employed you should be deemed as fully compliant, that is if you are investigated.

Turning to this, you have not been investigated how long have you contracted for? Those people that were investigated how many times have they been investigated?

[Ardesco]

Have you had any investigation at all with either the IR or for VAT? Are you speaking form experience? What was the end result of your investigation?

Not speaking from personal experiance, but I know a couple of people who have been through them. Aspect investigation they weren't interested in contracts specifically just a bunch of documents for a set period so they could check that the paperwork matched the accounts.

Your contract must reflect your working practice, I thought I'd made this point strongly enough earlier but its not just all about your contract. If you have the best contract in the world but still live at home, you work 9-5 for x pounds per hour, you do not invest in IT at all, you wear a permie badge and do the same role then you are a disguised employee even if your contract says not.

I know that the contract is only half the game, but it is an important half. If the contract is IR35 caught you are caught full stop. It doesn't matter what your working practices are like if the contract is caught so IMHO it is very important that the contract is IR35 complient.

Once you have got over that initial hurdle you then need to start worrying about working conditions.

If I have an office, employ two staff, work mainly on completion paid work, hold insurance, advertise, invest in IT heavily etc etc and have one contract which has one term that might point to employment it does not mean I am then caught within IR35. It just means there is a pointer against self-employment nothing more.

Each contract is asessed individually. You will get caught by IR35 on a contract by contract basis you can have 3 concurrent contracts running at the same time and be outside IR35 for two of them and caught for one of them. The above example implies you don't fully understand the process, you cannot get out of IR35 by having most of your contracts deemed outside IR35.

[malvolio]

I could not agree more but this is not what was being discussed. The issue I stated is that having a notice period, paid or unpaid, at home at work etc will not change your tax position alone.

Your contract must reflect your working practice, I thought I'd made this point strongly enough earlier but its not just all about your contract. If you have the best contract in the world but still live at home, you work 9-5 for x pounds per hour, you do not invest in IT at all, you wear a permie badge and do the same role then you are a disguised employee even if your contract says not.

If I have an office, employ two staff, work mainly on completion paid work, hold insurance, advertise, invest in IT heavily etc etc and have one contract which has one term that might point to employment it does not mean I am then caught within IR35. It just means there is a pointer against self-employment nothing more.

Hate to spoil the party but IR35 is assessed on a contract-by-contract basis. You can be caught for one contract and taxed accordingly on that one, including back tax and interest. Any other contracts are a separate issue.a

And if you want a good current example, the directors of the PCG receive an annual stipend on which they pay IR35 regardless of their other, more traditional and very clearly non-IR35 contract work.

[backgetyou]

You won't get very far trying to say that the contract you have signed is not what you are working to when you go to court.

I could not agree more but this is not what was being discussed. The issue I stated is that having a notice period, paid or unpaid, at home at work etc will not change your tax position alone.

Your contract must reflect your working practice, I thought I'd made this point strongly enough earlier but its not just all about your contract. If you have the best contract in the world but still live at home, you work 9-5 for x pounds per hour, you do not invest in IT at all, you wear a permie badge and do the same role then you are a disguised employee even if your contract says not.

If I have an office, employ two staff, work mainly on completion paid work, hold insurance, advertise, invest in IT heavily etc etc and have one contract which has one term that might point to employment it does not mean I am then caught within IR35. It just means there is a pointer against self-employment nothing more.

[backgetyou]

Would that be an aspect investigation or an IR35 investigation ?

Have you had any investigation at all with either the IR or for VAT? Are you speaking form experience? What was the end result of your investigation?

[Ardesco]

Have you ever had an investigation? My contracts were not even requested to very far down the line and then only some of them. Most documents that I had requested were random they just said we need all documents between period x and period y.

Would that be an aspect investigation or an IR35 investigation ?

[backgetyou]

If HMRC put your contract clearly inside IR35 because of the T&C do you really think they will bother checking up on your working practices? Do you think you could win an IR35 case in court with a contract that is clearly caught?

You won't get very far trying to say that the contract you have signed is not what you are working to when you go to court.

Have you ever had an investigation? My contracts were not even requested to very far down the line and then only some of them. Most documents that I had requested were random they just said we need all documents between period x and period y.

[Ardesco]

Its also worth saying if you declare yourself 'fully self-employed' it will only be an issue if anyone ever looks into your situation.

This is never a justification to be taken seriously, and I really can 't belive you came out with it.......

You could also never pay any tax and declare to the HMRC that you have only collected £50 VAT a month when in actual fact you have collected £5000 VAT a month.

It will only be an issue if somebody looks into your situation, but if/when they do you will be bent over a barrel and ****ed royally just before they lock you up for a very long time.....

[backgetyou]

No it costs you time that could be used earning more money. If I have to go to court for £2500 that I think a company should have paid me for my one week notice I have instantly lost a days worth of work (£500). It will also cost me travel/parking/court fees. If the company then gets the case adjourned I have to go to court another day (Another £500). As you can see 5 days going to court and i'm already running at a loss, this doesn't take into account the time taken to build my case, consult with lawyers, fill in and send various documents to the court via registered post, etc.

Unless you are owed a significant amount it is usually not worth the hassle as it will end up costing you more than you can claw back. it doesn't matter if you are in the right, sometimes it is not worth bothering.

The point you make is valid but the way you make it is wrong.

Small claims can be filed online. There is a fee but this is very small (the bit you gamble). The defendent cannot normally adjourne a small claim, it will be heard if either party is absent under the 7 day rule. You do not need to take the day off either if you live within driving distance of a court as typically a simple small claim such as what we are talking about will be decided very quickly, if this is not possible you can chose to have the claim heard 'by document' with no one present as I would suggest in this case. There is a risk that cases are running late if you do go but the whole idea of small claim is that its available to all. You cannot claim legal fees.

So you would be gambling your claim costs and an allocation fee if above a certain amount, dont read this wrong you may be right in that its not worth the hassle it depends how much you earn and how you are set up. In your case at £500 a day if its one week £2500 then you might blow it out as one of those things it depends on your circumstances.

[Ardesco]

If HMRC put your contract clearly inside IR35 because of the T&C do you really think they will bother checking up on your working practices? Do you think you could win an IR35 case in court with a contract that is clearly caught?

You won't get very far trying to say that the contract you have signed is not what you are working to when you go to court.

[backgetyou]

If you have signed a contract that says that x worker will be available to x company and will not work for anybody else I would say you are probably a disguised employee anyway.

On this point you are correct, of course your circumstances will have a bearing but to expand. If you hold nothing else to indicate self employment then you may be classed as a diguised employee. Your working practice is much more important.

Its also worth saying if you declare yourself 'fully self-employed' it will only be an issue if anyone ever looks into your situation.