Reply to: Disguised employees v contractors

[MyUserName]

If they investigate the fact that you have been in the contract means they will hammer you for the contract.

It doesn't matter how long the contract lasted.

BTW can you refuse to do a task?

Yes, although so far I have not because I have never been asked to do something that is not within my scope.

[Rabotnik]

This is quite a tricky one. A lot of managers just see contractors as temporary employees whom they can boss about as they please. I'm still a newbie, but I just make certain things clear to my manager at the time and so far they have not had a problem with it. For example, when I want time off I will email him telling him I am not coming in or coming in late and keep the email as evidence. I also made sure to amend my current contract to include deliverables, since they just had a boatload of stuff to do and just had "SQL consultant" before.

Currently I am the only contractor here and work alone, so that helps. I also do things the way I think they should be done. I do run my solutions past my manager first if they are high impact, like if he'd prefer an ETL system to be in code or SSIS. Some might say this is D&C, but personally I know he or his subordinates will have to maintain whatever I produce once I'm off and I prefer to give him the option in these cases. Got to keep the client happy after all

[Scoi]

I'm in a similar position. My legal bods say its always the same in my industry.

Contractors are taken on as they don't have enough permies to complete the project and don't want to take permies on as they won't be needed when the project ends.

So starting point is that we are all temporary staff members with no sick/holiday pay, benefits etc. and not contractors.

Then have to have enough convincing arguments to move us a far away from the IR35 border line as possible.

The lines between permie, temp and contractor don't seem to be clear so i've made sure I get as much of the small things agreed with ClientCo so it makes it clear i work differently to permies.

[malvolio]

Pardon?

Where is spelling bee

Makes perferct sense in Welsh....

"earnings and potential extended periods..." Got interupted and hit Submit a little early perhaps.... .

[Wanderer]

earningsna dn postential extended eprioiodds.

Pardon?

Where is spelling bee

[malvolio]

Yeah I have had the relevant reviews from QDOS and am covered by their insurance, I have also joined PCG and have various insurances through them.

I know I should not really worry I guess but with this witch hunt starting, it was playing on my inexperienced mind!

Why both? PCG covers everything youre likely to need....

Anyway, the point is that we wouldn't have this debate about disguised employees if someone stupid hadn't confused the need for limited companies in order to work, the need to protect income against uncertainty of earningsna dn postential extended eprioiodds out of work and nasty people trying to pay as little tax as possible - like, let's see, G Brown, D Millpede and the like - while beibng incapable of understanding why it's OK for D Livingstone esq.

As for risk, I've had contracts termminated early, I've had periods off work and I have absolutely no guarantee of working when this gig finsihes. How many employees can say the same?

[Taita]

I have always kind of semi agreed with this - maybe not emps but certainly temp emps.....

The Conservative Gov of '78 forced this (Agencies Act - need to check this!), otherwise we would be happily self-employed nomads, bit here, bit there, no Ltd to piss about with.

Certainly not a proper business with significant risk, dividends are 'a reward for risk' what's risky about a six monther at £600 a day? OK there's a bit but it's not the same as designing and building and marketing and selling, say, a new design of clothes peg or a new kind of bra a man can unload without having to use his beer glass hand....

Be honest, over all of our contracting lives, have our divs satisfied the 'reward for risk' criteria? I acknowledge there is some risk as we are, but like 'a proper business'.

Actually it was the 1975 Finance Act (Budget) under the Labour Government.

[SueEllen]

I know I should not really worry I guess but with this witch hunt starting, it was playing on my inexperienced mind!

If they investigate the fact that you have been in the contract means they will hammer you for the contract.

It doesn't matter how long the contract lasted.

BTW can you refuse to do a task?

[MyUserName]

...you should get a professional review of your contract and working practices by QDOS or similar...

Yeah I have had the relevant reviews from QDOS and am covered by their insurance, I have also joined PCG and have various insurances through them.

I know I should not really worry I guess but with this witch hunt starting, it was playing on my inexperienced mind!

[Ignis Fatuus]

The IBM example above is a poor one IMO because there's no question of a favorable tax position being sought by the IBM employee.

That is true, in that IR35 cases are usually about tax, whereas I was arguing about the rationale of being a "disguised employee" or not.

[jamesbrown]

Ah, good point. The example is helpful. So sitting in the same team as permies and working under the same day to day conditions does not automatically bring you into IR35.

Although I think it would be a hard case to argue against an aggressive HMRC inspector. I am not sure I see enough of a difference in working conditions to justify it

Realistically I am not at much more risk than a permie who has less than 1 year of service.

Well, you're doing a good job of talking yourself into it It's tough to give proper advice without knowing all the facts and, while perhaps less interesting than idle speculation on the internet, you should get a professional review of your contract and working practices by QDOS or similar. They have a template to fill out for working practices, but you can provide as detailed a description as you want. The IBM example above is a poor one IMO because there's no question of a favorable tax position being sought by the IBM employee.

[kingcook]

(2) John Smith. Employed by IBM. Sits in ClientCo Ltd's office and develops software for Client Co Ltd.
He's an employee of IBM. He's not an employee, disguised or otherwise, of ClientCo Ltd.

John Smith is receiving a normal wage like an employee, not dividends. He is not avoiding paying NI.

The directors of IBM are not providing a personal service themselves, they are sending in their employees (substitutes?).

[MyUserName]

Ah, good point. The example is helpful. So sitting in the same team as permies and working under the same day to day conditions does not automatically bring you into IR35.

Although I think it would be a hard case to argue against an aggressive HMRC inspector. I am not sure I see enough of a difference in working conditions to justify it

Realistically I am not at much more risk than a permie who has less than 1 year of service.

[stek]

I have always kind of semi agreed with this - maybe not emps but certainly temp emps.....

The Conservative Gov of '78 forced this (Agencies Act - need to check this!), otherwise we would be happily self-employed nomads, bit here, bit there, no Ltd to piss about with.

Certainly not a proper business with significant risk, dividends are 'a reward for risk' what's risky about a six monther at £600 a day? OK there's a bit but it's not the same as designing and building and marketing and selling, say, a new design of clothes peg or a new kind of bra a man can unload without having to use his beer glass hand....

Be honest, over all of our contracting lives, have our divs satisfied the 'reward for risk' criteria? I acknowledge there is some risk as we are, but like 'a proper business'.

[Ignis Fatuus]

How many contractors are actually not disguised employees?

I am a non-disguised employee of my own company.

Let me clarify by example:

(1) Joe Bloggs. Employed by ClientCo Ltd. Sits in their office and develops software for ClientCo Ltd.
He's an employee of ClientCo Ltd.

(2) John Smith. Employed by IBM. Sits in ClientCo Ltd's office and develops software for Client Co Ltd.
He's an employee of IBM. He's not an employee, disguised or otherwise, of ClientCo Ltd.

(3) Ignis Fatuus. Employed by MyCo Ltd. Sits in ClientCo Ltd's office beside his mate John Smith of IBM, and like John, develops software for Client Co Ltd.
Is he a disguised employee of ClientCo Ltd, where John Smith of IBM is not?