Reply to: Bonus or gift under ir35

[Sausage Surprise]

Take the money in cash....simple

[xara]

I think you have to apply some common sense at some point....

and oddly enough yes, if you can avoid using client offered PC's internet connections and phones it will help your IR35 case so kinda shot yourself in the foot there.

I didn't say 'client-offered' PCs and connections, but point taken.

[northernladuk]

Thanks a lot for all the replies.

Having read the thread so far I don't find myself entirely persuaded either way.

The argument about not doing what permies do, doing the opposite of what permies do etc., seems emotive rather than rational. Permies work on their PCs and hook up to the VPN and write emails and make telephone calls. These form part of their working practises. Should these things be avoided as well?

Of course, the legislation itself is far from rational or logical...

I think you have to apply some common sense at some point....

and oddly enough yes, if you can avoid using client offered PC's internet connections and phones it will help your IR35 case so kinda shot yourself in the foot there.

[xara]

Thanks a lot for all the replies.

Having read the thread so far I don't find myself entirely persuaded either way.

The argument about not doing what permies do, doing the opposite of what permies do etc., seems emotive rather than rational. Permies work on their PCs and hook up to the VPN and write emails and make telephone calls. These form part of their working practises. Should these things be avoided as well?

Of course, the legislation itself is far from rational or logical...

[MyUserName]

Doesn't this really come down to terminology though? If it's considered a project completion 'bonus' then what's the harm in taking it as cash providing it's accounted for properly? I'm sure there are plenty of arms-length contracts out there which have performance targets and bonuses written in, why is this any different regardless of whether the permies are offered the same?

In fact if the permies are only offered the gift but the contractor has the option of taking a cash equivalent, doesn't that indicate them being treated differently and therefore positive from IR35 perspective?

You could desribe this as something which puts you inside IR35 if you tried? If so, then be careful, as that is what HMRC will do.

It is far safer to avoid any grey area that they can prod around in, IMHO.

[LisaContractorUmbrella]

Doesn't this really come down to terminology though? If it's considered a project completion 'bonus' then what's the harm in taking it as cash providing it's accounted for properly? I'm sure there are plenty of arms-length contracts out there which have performance targets and bonuses written in, why is this any different regardless of whether the permies are offered the same?

In fact if the permies are only offered the gift but the contractor has the option of taking a cash equivalent, doesn't that indicate them being treated differently and therefore positive from IR35 perspective?

Because, at the end of the day, whether you receive cash or artichokes you are still receiving a reward of the same value and for the same reason as a permie

[formant]

Don't the AWR make provision for performance-related bonuses?

"10. Individual performance related bonus payments

A bonus you would pay the temporary worker if you directly employed them and which is directly attributable to their individual performance falls within the definition of 'pay'.

Where this applies the temporary worker does not have to receive exactly the same bonus as your comparable direct employee but should have the same opportunity to achieve it and be assessed using the same criteria. By contrast, bonuses or any part of them, directly linked to an individual's length of service/the company’s performance will not count." (lifted from here: Agency Workers Regulations (AWR): An Overview - Michael Page International)

So performance/project related bonus - yes, loyalty bonus - no?

[Willapp]

The permies have been given a pressie and so have you - would suggest that you are being viewed as a permie by the higher ups which would not bode well in the event of an investigation

Doesn't this really come down to terminology though? If it's considered a project completion 'bonus' then what's the harm in taking it as cash providing it's accounted for properly? I'm sure there are plenty of arms-length contracts out there which have performance targets and bonuses written in, why is this any different regardless of whether the permies are offered the same?

In fact if the permies are only offered the gift but the contractor has the option of taking a cash equivalent, doesn't that indicate them being treated differently and therefore positive from IR35 perspective?

[LisaContractorUmbrella]

The permies have been given a pressie and so have you - would suggest that you are being viewed as a permie by the higher ups which would not bode well in the event of an investigation

[SueEllen]

Absolutely. No business ever got anywhere by accepting money that might generate any paperwork, or incur any VAT.

For a small amount of money and looking embedded in the team the hassle isn't worth it.

Now if the client decides to entertain all those involved or give something that wasn't tulip it would come under corporate entertainment and wouldn't be a risk.

[thunderlizard]

Definitely don't take the equivalent in cash as it will generate paperwork for you and you will have to pay VAT on it.

Absolutely. No business ever got anywhere by accepting money that might generate any paperwork, or incur any VAT.

[Wanderer]

Bloody hell, if I can get more money then I'll take it!!

That's called making a profit on the contract though good management and performance. A nice positive IR35 pointer, in my book.

[northernladuk]

Might want to get the rest of your house in order if the client is even treating you like the others and offering. Most definitely do not accept it but make sure he isn't just treating you as part of the team and you are in danger of being under D&C and your working practices make you look permie. If there was any kind of bonus on the gig you should have dealt with it from the beginning.

[SueEllen]

Definitely don't take the equivalent in cash as it will generate paperwork for you and you will have to pay VAT on it.

Just politely refuse.

If questioned say it's due to your company's gift acceptance and anti-bribery policies. (Well it's better than saying the gift is tulip.)

[Sockpuppet]

Do the opposite of what the permies do. A polite refusal is probably the best.