Reply to: contracting for 2 years...

[ASB]

The problem for us*, with Muscat, Dacas et al is not that other contractors will seek to cite them in their own claims but that the IR will do so. They now have test cases they can use to argue that contractors are really just employees and should be paying tax/NI as such.

I'm not saying that these cases give the IR a definitive argument, but it does give them more legal ammo, and that may make life harder for all of us*.

[us* being those contractors endevouring to be truly in business in our own right and not simply dodging tax via dubious composites or disreputable brolly's]

Strictly these set no form of precedent on tax issues. They are ET or EAT decisions. In practices however they do of course get cited by both the IR and defence counsel. However the facts of these cases are so far removed from anything likely to be normal that I dont *think* they would be particularly harmful.

IMO it is more likely that the taxman will uyse them as a stick to beat up unsuspecting taxpayers and a lot will roll over.

[DaveB]

I've heard the 24-month rule bandied about here a lot, but what about the other rule on the HMRC site?
I've heard the 24-month rule bandied about here a lot, but what about the other rule on the HMRC site?

the fixed term appointment rule: a workplace is not a temporary workplace if the employee can expect to work there in a continuous period of working lasting for all or almost all of the likely duration of the employment.

If it's a fixed term appointment then you are a direct employee of the company for a fixed period. Doesn't apply to contractors. We arn't employees of the client company in any way shape or form.

[ASB]

I've heard the 24-month rule bandied about here a lot, but what about the other rule on the HMRC site?

A fixed term appointment is a specific type of employment. e.g. a nurse on a one year contract. These are quite common in the public sector. This rule is to prevent those employees from being able to claim travel expenses.

[expat]

I've heard the 24-month rule bandied about here a lot, but what about the other rule on the HMRC site?

the fixed term appointment rule: a workplace is not a temporary workplace if the employee can expect to work there in a continuous period of working lasting for all or almost all of the likely duration of the employment.

[DaveB]

If the company hiring the temp is knowingly employing the temp to avoid paying taxes - is this then counted as fraud and can the company then be investigated? - and any taxes that should have been paid - will now become liable for payment?

I am not looking to establish my own rights with a company (i do piece-meal work for various clients), only trying to point out to another company their exposure for things like holidays / sickness / paye etc.

cheers

Only if they employ that temp directly and then dont pay employers NI PAYE etc - cash in hand effectively. If they employ them through an agency then the agency is paying the employers NI etc and deals with holiday/sick pay/paye in its own right.

Thats the advantage of employing a temp via an agency, you dont have to worry about that as the agency does it.

[Chappo]

If the company hiring the temp is knowingly employing the temp to avoid paying taxes - is this then counted as fraud and can the company then be investigated? - and any taxes that should have been paid - will now become liable for payment?

I am not looking to establish my own rights with a company (i do piece-meal work for various clients), only trying to point out to another company their exposure for things like holidays / sickness / paye etc.

cheers

[DaveB]

Muscat was very specific and centered on TUPE. It is, IMO, highly unlikey to affect anyone in a more "normal" contacting situation.

In practical terms it seems unlikely that anybody will be able to cite Muscat at an ET to gain employement rights (although I do accept the possibility). The earlier HP O'Murphy case is likely to be more relevant. Result in simple terms, not contract between the contractor and HP. Therefore no direct contract, thus no possibility of employment. Of course Dacas went the other way, but in this case she was an individual temping. If she was via a company then the ET would probably have found her an employee of herco.

But, at the end of the day, bring an action. Who knows where it will go, depends on the facts of the particular case. Generalities are likely to be wrong.

The problem for us*, with Muscat, Dacas et al is not that other contractors will seek to cite them in their own claims but that the IR will do so. They now have test cases they can use to argue that contractors are really just employees and should be paying tax/NI as such.

I'm not saying that these cases give the IR a definitive argument, but it does give them more legal ammo, and that may make life harder for all of us*.

[us* being those contractors endevouring to be truly in business in our own right and not simply dodging tax via dubious composites or disreputable brolly's]

[ASB]

Muscat

Muscat was very specific and centered on TUPE. It is, IMO, highly unlikey to affect anyone in a more "normal" contacting situation.

In practical terms it seems unlikely that anybody will be able to cite Muscat at an ET to gain employement rights (although I do accept the possibility). The earlier HP O'Murphy case is likely to be more relevant. Result in simple terms, not contract between the contractor and HP. Therefore no direct contract, thus no possibility of employment. Of course Dacas went the other way, but in this case she was an individual temping. If she was via a company then the ET would probably have found her an employee of herco.

But, at the end of the day, bring an action. Who knows where it will go, depends on the facts of the particular case. Generalities are likely to be wrong.

[XLMonkey]

Can anyone point me in the direction of some official documentation pertaining to my rights if i have been contracting at the same site EVERY day for more than 2 year? - some twat is being a bit pedantic with me

yes, it's here

http://www.hmrc.gov.uk/employers/ebi...-travel-05.htm

you can claim back travel expenses where you are going to a temporary workplace. However, there are a variety of rules to determine whether or not the HMRC treat a particular office as a temporary workplace. The 24 month rule is on this link, and explains it with examples

[scotspine]

Unless of course you are trying to argue that you *have* rights as an employee, a la Mr Muscat. In which case I could care less, but not by much, as cases like that screw things up for the rest of us.

+1

[peter.henderson@exprosys.]

deemed employee

If you:

work in the same way that 'regular' employees do and
work for a line manager and
are integrated into the client's organisation and
work on the client site at times controlled by your client under the control of your client and
take no financial risk and
have to provide all of the services personally (i.e. you can't send someone else and
are reguarly offerred work and reguarly have to accept it.

then you would almost certainly be deemed to effectively be an employee of the client. You would therefore be caught by IR35 (you accept this). You may also be able to claim employment rights as you are to all intents and purposes an employee of the end-client, even though your contract probably expressly excludes this. This is based on two recent court cases:

Dacas vs Brook Street Bureau
Mucat vs Cable and Wireless

It's worth pointing out that this is quite an uncertain and contentious area of law and you should seek proper legal advice before acting on any nonsense that I come up with! You would also not make yourself very popular with any potential client!

Thanks. Peter.

[DaveB]

Read the sentence, listen to the words......

"I could care less, but not by much..."

[Mailman]

In which case I could care less, but not by much, as cases like that screw things up for the rest of us.

I COULDNT care less...COULNDT!

Damn Americanism!

Mailman

[DaveB]

Tell us what the twat is being padantic about?

However Im sure the only official document you need to concern yourself is that little one called "your contract"*

Mailman

*plus any other pile of dung her majesties government wishes to impose upon you at their will.

Unless of course you are trying to argue that you *have* rights as an employee, a la Mr Muscat. In which case I could care less, but not by much, as cases like that screw things up for the rest of us.

[Mailman]

Tell us what the twat is being padantic about?

However Im sure the only official document you need to concern yourself is that little one called "your contract"*

Mailman

*plus any other pile of dung her majesties government wishes to impose upon you at their will.