Reply to: "let’s be honest, there isn’t a contractor out there that will pass a IR35 audit"

[DimPrawn]

Is this the same IR35 that the Tories were screaming about at New Labour as being wrong, punitive, counter-productive and heavy handed, the same one they would repeal instantly if they were elected, as it damages entrepeneurship and economic growth?

[cojak]

Can someone tell me which bit of the email isn't true please?

Any experienced contractor WILL be able to pass the audit (with QDOS/IPSE insurance), because IR35 legislation itself hasn't changed.

What has changed is the out of business scammers who used to make A LOT of money on the e easy pickings of frightened newbies who jumped into their EBT schemes.

It's these guys who will attempt to claw back their pickings by trying to frighten people into another rubbish 'QC approved' type of scam.

Which we shall laugh at all over again.

[SueEllen]

Can someone tell me which bit of the email isn't true please?

HMRC have access to all this information anyway.

[happytohelp]

Help needed this time

Can someone tell me which bit of the email isn't true please?

[BlasterBates]

You continually talked about construction workers which is why I brought it up...

and I correctly pointed out that your argument was invalid.

It's always good to point out discussion points which are irrelevant to the argument.

[eek]

CIS doesn't apply to catering, cleaning, nursing etc either.

So the fact that CIS doesn't apply is not a valid argument.

You continually talked about construction workers which is why I brought it up... And if you think anyone could convince your typical shat upon zero hour cleaner or care worker to run a limited company to save themselves a very quid then you are a bigger fool than I took you to be...

And HMRC has a serious dislike of agencies employing people as self-employed. There are entire sets of Upper Tax Tribunals where HMRC lost and HMRC pointed out that the only person who made money out of it was the agency, the workers saw no more than the would have received if they had been employed.... I'm sure there are cases where the employees would have got more due to the minimum wage laws...

[BlasterBates]

Try that again. There are very strict CIS rules that HMRC impose on the building industry...

CIS doesn't apply to catering, cleaning, nursing etc either.

So the fact that CIS doesn't apply is not a valid argument.

http://www.advancecontracting.co.uk/...x_briefing.php

It is therefore possible that if this proposal goes ahead without amendment that the main effect will be that many recruitment businesses will cease to engage contractors via self-employed intermediary models unless they are absolutely comfortable with the status of self-employed workers. It goes without saying that it is therefore essential that recruitment businesses only contract self-employed workers through intermediaries that have a sound evidence to show they’re compliant with HMRC thinking.

I've seen one or two posters complaining of this, remains to be seen how much of a problem it becomes.

[eek]

This is a tricky one.

The legislation supposedly doesn't apply to dividends in a PSC, but this creates a potential loop hole in that supposedly self employed construction workers could simply setup Ltd companies and pay themselves dividends, so presumably HMRC say "generally" doesn't apply to PSC's to stop this loophole being created.

The problem is how do you distinguish between an IT contractor who is a disguised employee and a construction worker? From a legal point of view you can't.

They're both illegally dodging NI, so will an Inspector ignore the reports from IT agencies or wll he feel obliged to check them as well.

Although this legislation isn't targeted at IT contactors, they're standing right next to the targets and when the bombs go off they might get hurt as well.

Try that again. There are very strict CIS rules that HMRC impose on the building industry...

[BlasterBates]

This is a tricky one.

The legislation supposedly doesn't apply to dividends in a PSC, but this creates a potential loop hole in that supposedly self employed construction workers could simply setup Ltd companies and pay themselves dividends, so presumably HMRC say "generally" doesn't apply to PSC's to stop this loophole being created.

The problem is how do you distinguish between an IT contractor who is a disguised employee and a construction worker? From a legal point of view you can't.

They're both illegally dodging NI, so will an Inspector ignore the reports from IT agencies or wll he feel obliged to check them as well.

Although this legislation isn't targeted at IT contactors, they're standing right next to the targets and when the bombs go off they might get hurt as well.

[Zero Liability]

On that point. The rest is pure fear mongering.

[OwlHoot]

From April 1st every recruitment company that engages with contractors will have to report directly to HMRC supplying them with information about you and your contract details under the disguised self employment regulations.
This include your personal details, national insurance number, end user client details and how much they paid you; whats more is they will have to retain this information and continue reporting on it for 12 months, even after your assignment ends.


Is that true?

This is the point. The article may sound a bit scammy and scaremongery, but that doesn't mean they are wrong.

[Zero Liability]

They can all pat themselves on the back, call it a day and go have a few drinks to celebrate all the good that they (pretend they) have done.

[Paddy]

That's what he just said. The agencies have to report on payments made to limited companies but the intention at present isn't focused on IR35 compliance (or anything else relating to limited companies per se) but on dodgy umbrellas, with the intention of preventing these agencies from using work-arounds.

The scam quoted in the OP should come with the "based on a true story" or "a fictionalised account of reality" moniker, or something similar, because it goes from a true fact, to making a vast leap in logic, as if they know that HMRC will be using these new requirements to fast track 10's or 100's of 000's of contractors through IR35 reviews, which apparently no one could pass, in spite of HMRC losing a good proportion of these cases.

I do think if the FLC concept goes somewhere, as others have suggested here and elsewhere, it may then be used as an attempt to do away with ltd company contracting, but that's not yet realised, and may potentially never come to be. If it does, however, judging from the moronic over-reactions of some agencies to this legislation, I can see why the FLC (should it be exempted from reporting requirements) could pose a threat.

Reading Hansard was rather laughable because prior presenting the amendment to the Commons; it appears the debate was about HSBC and their clients tax evasion. Of course nothing was done about HSBC

[centurian]

From April 1st every recruitment company that engages with contractors will have to report directly to HMRC supplying them with information about you and your contract details under the disguised self employment regulations.
This include your personal details, national insurance number, end user client details and how much they paid you; whats more is they will have to retain this information and continue reporting on it for 12 months, even after your assignment ends.


Is that true?

Yes - and it will mean that HMRC will now have - err - pretty much exactly the same information that they will already have from your tax return (assuming you fill in the PSC section).

[Zero Liability]

That's what he just said. The agencies have to report on payments made to limited companies but the intention at present isn't focused on IR35 compliance (or anything else relating to limited companies per se) but on dodgy umbrellas, with the intention of preventing these agencies from using work-arounds.

The scam quoted in the OP should come with the "based on a true story" or "a fictionalised account of reality" moniker, or something similar, because it goes from a true fact, to making a vast leap in logic, as if they know that HMRC will be using these new requirements to fast track 10's or 100's of 000's of contractors through IR35 reviews, which apparently no one could pass, in spite of HMRC losing a good proportion of these cases.

I do think if the FLC concept goes somewhere, as others have suggested here and elsewhere, it may then be used as an attempt to do away with ltd company contracting, but that's not yet realised, and may potentially never come to be. If it does, however, judging from the moronic over-reactions of some agencies to this legislation, I can see why the FLC (should it be exempted from reporting requirements) could pose a threat.