Reply to: Tax tribunal finds contractor wasn't employee

[Jog On]

I don't think "I was helping the economy" is a good defence for breaking tax law... it's not like you're deliberately setting out to bring money into the UK from abroad for philanthropic motives.

Is paying yourself as outside IR35 "breaking tax law"?

This is especially helpful because the other IR35 pointers (substitution, direction and the contractor's half of MoO) are things that you have to fight to get put in an agency contract: but the client's lack of obligation to provide work, and ability to cancel suddenly, both tend to come without asking.

This IMO is what should really decide whether someone is inside or outside. Also having a clause where you have to rectify any mistakes in your own time and at your own expense.

I've had a contract cancelled on me suddenly and just got on with it and found another one - an employee or even 'disguised' employee would whinge and start trying to claim compensation they are 'entitled' to...

There are enough stories in the business and accounting section about clients not paying, contracts being suddenly cancelled etc to show that we are not treated as and considered as employees - disguised or not.

Contracting like any other business is a risk vs reward game. I wish Hector would just give up and go after the real tax avoiders who they know they don't stand a chance against.

Grow some balls Hector - Grow some flipping balls!!

[TykeMerc]

This is especially helpful because the other IR35 pointers (substitution, direction and the contractor's half of MoO) are things that you have to fight to get put in an agency contract: but the client's lack of obligation to provide work, and ability to cancel suddenly, both tend to come without asking.

Good point, in fact it's expected by the clients and accepted by the vast majority of contractors as a fact of life.

[thunderlizard]

This is especially helpful because the other IR35 pointers (substitution, direction and the contractor's half of MoO) are things that you have to fight to get put in an agency contract: but the client's lack of obligation to provide work, and ability to cancel suddenly, both tend to come without asking.

[d000hg]

I don't think "I was helping the economy" is a good defence for breaking tax law... it's not like you're deliberately setting out to bring money into the UK from abroad for philanthropic motives.

[riiiiiich]

I am just starting up as a freelance consultant and for the next while will be working in Germany and bringing a lot of money into the UK economy by exporting myself. It would be rather ironic if they went for me, but the HMRC can be greedy bastards like that.

[xoggoth]

I think the main parts are:

...because of the peculiarities of the aircraft industry. ...The ruling said that the integration of Fitzpatrick's work and the checking of it were necessary if the process of building an aircraft was to be done properly and safely.

The appearance of employment was not due to control for its own sake but for entirely different reasons. If somebody was just visiting or seconded from another company they would also be subject to the same rules, having to work on site, or not using own equipment.

[centurian]

I think the clincher in this case was that he was able to point to evidence which showed that Airbus had sent contractors offsite without remittance when it suited them - although it isn't clear in this article.

So it doesn't really change much. Seems that the clauses themsevles (MOO, ROS) are meaningless unless you can point to a situation where it has actually / was likely to occur - and demonstrate that the clause isn't just artificial.

However, encouraging to see that the tribunal was able see sense and recognise he was not the same as an employee.

[MayContainNuts]

Found this difficult to understand why the guy won this case. Everything pointed to him being a disguised employee. Can anyone explain how he wasnt!

[Gibbon]

Brill!!! Eh Gibbon?

Having to be on site is always a nonsense pointer when there are issues of security, confidentiality and safety.

Indeed.

[Jog On]

This is fabulous

I think MOO should be the only determining factor for IR35. In their own words:

IR35 (the intermediaries legislation) is legislation introduced in 2000 to counter avoidance of tax on employment income where workers receive payments from a client via an intermediary (usually a personal service company) and the relationship between the worker and the clientwould otherwise be one of employment.

Small Business Tax Review - HM Treasury

What exactly do they mean by 'would otherwise'? Is it like if the worker had signed a contract of employment with all the MOO etc etc that goes with it?

Yeah that's a different situation.

[xoggoth]

Brill!!! Eh Gibbon?

Having to be on site is always a nonsense pointer when there are issues of security, confidentiality and safety.

[d000hg]

Reading that article he sounded like a disguised employee I guess it shows how far you've got to go to truly fall into that category, which is nice.

[AtW]

So the government is still trying to hammer small businesses while the huge corporations are free to dodge massive amounts of tax as usual.

Nothing changes. About time the government left entrepeneurs and small businesses alone to generate some wealth, employment prospects and intellectual property, no?

Yes, no.

[DimPrawn]

So the government is still trying to hammer small businesses while the huge corporations are free to dodge massive amounts of tax as usual.

Nothing changes. About time the government left entrepeneurs and small businesses alone to generate some wealth, employment prospects and intellectual property, no?

[Spacecadet]

"The right... to cancel [the work] without notice is characteristic of a contract for services but quite foreign to the world of employment, as is the provision for agreeing compensation in such an event,"