IR35 - Back to first principles....

[eek]

Bearing in mind most of us are on 10K a year...

Our company / umbrella companies do not receive £10k or so in total a year. Many other people forced to use Umbrellas or so do receive something like 10-15k or £200-300 a week / £800-1250 a month....

The problem there is that we don't really know as the umbrella's who deal with those type of workers typically aren't once we've heard of or wish to advertise themselves to anyone other than end clients trying to minimise costs..

[WordIsBond]

All case law is based on NOT subject to SD or C (which is nearly the same but not quite). The problem is that the current phrase is under SD or C with the NOT removed.

You can see how its occurred,

No programmer would do it. One more demonstration of how they don't understand the world in which we live and work.

[eek]

No programmer would do it. One more demonstration of how they don't understand the world in which we live and work.

Oh they understand it. They just hope no one notices and picks up on it....

[DaveB]

Two years is a valid number. I've been contracting for 23 years and the longest gig in that time went to 3 years, but that was with two very different outsource clients of the client. Also all the management I was working with were different.

Other rule would have to be number of contracts running at the same time. I would be unfair if you had a long running part time support / fix on fail type of contract that got caught by in the rule, but you were also doing several shorter say 3-6 month full time contracts. Plus a rule about a gap on returning to the same client, maybe 3 months to stay outside the PAYE/NI net.

I think this approach does have legs.

2 year limit ties in with the 2 year travel costs rule which is already accepted (although how well it is enforced is another thing). It would make reporting requirements easier, as clients or agents would only have to report on those contractors who have been there over 2 years.

Add in an exception for those running multiple contracts, which is already a solid IR35 defence, and it looks like somthing that would work.

The problem I could see is that you would still have unscrupulous employers who will simply bin people off after 2 years and replace them. Whether that would leave them open to employment tribunal claims could be something to be investigated. It may take a change in the rules to allow for this, I dont know.

[SueEllen]

There have been test cases where temps/contractors have argued they are employees and claimed unfair dismissal. The ones I can remember are the two cases that were lost.

However those removed and claiming discrimination can win.

Most tribunal cases don't go to a hearing so I suspect a lot of cases have resulted in pay offs as the judge can ask for action to be taken against a company.

Also people now have to pay to submit a employment tribunal claim.

[eek]

There have been test cases where temps/contractors have argued they are employees and claimed unfair dismissal. The ones I can remember are the two cases that were lost.

However those removed and claiming discrimination can win.

Most tribunal cases don't go to a hearing so I suspect a lot of cases have resulted in pay offs as the judge can ask for action to be taken against a company.

Also people now have to pay to submit a employment tribunal claim.

The thing you have to remember is that there is no actual definition of employment / self-employment. HMRC's definition of employment is not the same as an employment tribunals definition which isn't the same as the Home Office's or DWP's.

While you can emphasis this lack of joined up thinking I think its in the too big and complex to fiddle with category. Which is why HMRC rules are missing out most of the old tests (because they think they can)..

[SueEllen]

The thing you have to remember is that there is no actual definition of employment / self-employment. HMRC's definition of employment is not the same as an employment tribunals definition which isn't the same as the Home Office's or DWP's.

While you can emphasis this lack of joined up thinking I think its in the too big and complex to fiddle with category. Which is why HMRC rules are missing out most of the old tests (because they think they can)..

The two unfair dismissal cases I remember went to the appeal courts. The legal arguments where on SDC, MOO and the meaning of "service".

The discrimination cases are often more clear cut in this regard.

[Danglekt]

I've not yet heard a decent reason why the two year, with an exception for multiple clients isn't the most straight forward test.

We were asked to come up with some easy to test, easy to police, easy to understand option - that seems it to me.

[fidot]

Simple but flawed

I've not yet heard a decent reason why the two year, with an exception for multiple clients isn't the most straight forward test.

We were asked to come up with some easy to test, easy to police, easy to understand option - that seems it to me.

The biggest drawbacks with it are that it won't catch enough people for HMRC's liking (I suspect) and it's very easy to avoid.
It doesn't stop abuse of the system either. Employers who force low-paid employees to incorporate will now sack them just under the 2 years.

[TheFaQQer]

I've not yet heard a decent reason why the two year, with an exception for multiple clients isn't the most straight forward test.

We were asked to come up with some easy to test, easy to police, easy to understand option - that seems it to me.

Because the reward for business success shouldn't be increased uncertainty over taxation.