November 22nd - The death of contracting as we know it

[poorautojobber]

Surely there needs to be a contractor group mounting a legal challenge to this? IR35 cases have gone to court and HMRC have consistently lost over the years. What has changed from a legal perspective between then and now? Nothing as far as I am aware. If we were outside then, we are outside now. Why are we leaving it to the doctors (another post on this thread) to mount this challenge, what is the plan of IT contractors beyond a pub conversation on threads like this?

Challenging IR35 is pointless the case law is well known. What is wrong is an online tool which doesn't take into account all case law to make a determination I would imagine the only true determination would be by a judge. That probably is challengeable but it will require the right cases and the willingness to follow it through.
If you have none PS skills (i never have and never will work PS) vote with your feet.
I'm in the process of taking another contract and am getting the contract and practices reviewed NOW so if this does get rolled in Private sector I have some amunition with the client.
I think Hector will find this being much harder for them in the private sector and no way are they going to return the revenue they expect. I think a lot of agents/clients will start buying insurance policy to cover them.
We'll have to wait and see how it really affects us I'm not convinced we'll actually see much change but I could and probably are wrong.

[mudskipper]

I know people are sceptical about the impact of writing to MPs

But the Tory government is clinging on by a shoestring - if ever there was a time to get your MP on your side, it's now. There's dozens of seats where the self employed constituency is larger than the Tory majority.

It's much better to put a letter into your own words, but if you're struggling, there's a template here. Use it for ideas to compose your own rant/missive. Make your voice heard.

https://www.ipse.co.uk/our/fighting-ir35.html

[Fred Bloggs]

Admin - Where is the "puts head in hands" emoticon when you need it please?

Edit - OK, this will do for now -



Who else here thinks that it needs to be pointed out that there is nobody on this forum who is self employed? (OK, perhaps there might be a gardener or a bricklayer, maybe. But I doubt it). It is precisely this kind of wrong headed, muddled (lack of) thinking that has got you all where you are now.

Are you a micro/nano business? Or are you self employed? Because you cannot be both. Whingeing and complaining about the government will get you precisely nowhere when all the government has to do is the same question I just did. Credibility? Zero.

[SussexSeagull]

Admin - Where is the "puts head in hands" emoticon when you need it please?

Edit - OK, this will do for now -



Who else here thinks that it needs to be pointed out that there is nobody on this forum who is self employed? (OK, perhaps there might be a gardener or a bricklayer, maybe. But I doubt it). It is precisely this kind of wrong headed, muddled (lack of) thinking that has got you all where you are now.

Are you a micro/nano business? Or are you self employed? Because you cannot be both. Whingeing and complaining about the government will get you precisely nowhere when all the government has to do is the same question I just did. Credibility? Zero.

Having to prove I have a Limited Company so they could put me on their system as a supplier at my current client would suggest I am a business and not a freelancer.

People know more about the history of these things than I do but I am lead to believe contractors up to the 70s were basically self employed but changes in legislation and client demands made everyone move to a LTD or Umbrella.

I would agree we really should all be self-employed but legally most of us haven't been for a long time.

[Fred Bloggs]

Having to prove I have a Limited Company so they could put me on their system as a supplier at my current client would suggest I am a business and not a freelancer.

People know more about the history of these things than I do but I am lead to believe contractors up to the 70s were basically self employed but changes in legislation and client demands made everyone move to a LTD or Umbrella.

I would agree we really should all be self-employed but legally most of us haven't been for a long time.

On your first point, yes I would tend to agree with you. I think working and delivering against a client company purchase order that you tendered for and invoicing when achieving pre-agreed milestones is as good as it gets, pretty much. Sadly, it is not a silver bullet and you could still be investigated for IR35. But you are not self employed, that's very clear.

Secondly, you are pretty much spot on again. Yes, contractors could be sole traders, in the past self employed. It is no longer an option and today's contractor is not self employed.

One of the main reasons (in my opinon) IR35 enforcement has been like nailing jelly to the wall is that contractor's are nano businesses and not self employed. The difficulty in nailing down precisely who is IR35 caught and who isn't has basically saved thousands of contractors many thousand GBP a year for the last 17/18 years. PCG recognised this (or I thought they did, any way) and successfully kept the nailing jelly to the wall situation in hand very efficiently. The latest muddled headed conflation of who or what a contractor is is playing right into the hands of HMRC and HMG. FFS, why on earth do you press HMG for a legal definition of what a contractor is when it is precisely the lack of a definition that kept IR35 away from the community for so long? And why refer to contractors as self employed when they clearly aren't?

[jamesbrown]

Who else here thinks that it needs to be pointed out that there is nobody on this forum who is self employed?

The whole point of IR35 is to cast aside the intermediary, build a hypothetical contract in which the worker directly provides their services to the client, and establish whether that relationship resembles one of employment. That is the topic of this thread, right? The Intermediaries legislation didn't invent any new tests for distinguishing between employment, one the one-hand, and not employment (self-employment) on the other. The term "self-employment" is perfectly valid in this context and doesn't need to be conflated w/ being a sole trader.

[Fred Bloggs]

The whole point of IR35 is to cast aside the intermediary, build a hypothetical contract in which the worker directly provides their services to the client, and establish whether that relationship resembles one of employment. That is the topic of this thread, right? The Intermediaries legislation didn't invent any new tests for distinguishing between employment, one the one-hand, and not employment (self-employment) on the other. The term "self-employment" is perfectly valid in this context and doesn't need to be conflated w/ being a sole trader.

You're perfectly entitled to hold that opinion of course, even when you're wrong. The IR35 test is not how you describe it. It is a test of whether you are a disguised employee or not. It is not whether you are self employed or employed. The term self employed has a precise and specific meaning and is not to be conflated with being either an employee (if you have an employment contract) or an officer of a nano business (if you don't), the nano business is a Ltd Company, usually. The latest moves in the public sector and perhaps the private sector soon do not change the actual core IR35 legislation or case law one little bit.

To help you out a bit take a look here -

https://www.gov.uk/working-for-yourself

Where you'll see -

If you start working for yourself, you’re classed as a sole trader. This means you’re self-employed - even if you haven’t yet told HM Revenue and Customs (HMRC).

And (after explaining some stuff) it says -

Many of these also apply if you own a limited company but you’re not classed as self-employed by HMRC. Instead you’re both an owner and employee of your company.

[Hobosapien]

Much of the confusion is due to how over the years various entities have sought to protect themselves from liabilities (employment/tax law) when wanting to offer work to an individual rather than a company.

So we have all the hassle of individuals having to operator via a Ltd as the client/agency wouldn't offer a direct contract to the individual, yet the individual is still named on the contract as they don't want the Ltd sending just anyone to do the work the individual interviewed for.

The only way to avoid it is to enter a true b2b relationship where no individual is named on the contract, like consultancies and tender winning companies achieve. The client is sold on the company's ability to deliver what they need not on specific individuals within that company having passed an interview.

Of course for the majority of contracts that is not possible as the client just wants an individual as a specific resource. Hence why the government is chasing tax from those individuals due to them appearing to be employees similar to those on fixed term contracts with no employment rights and only a limited term in contract.

So the solution is for individual contractors to form consultancies based on their skillset and the consultancy enters contracts with the clients on a b2b basis. It's been tried and done before but has its own set of issues, but if the majority of contractors only operated that way the clients would start to entertain it more. That or they'd get more cheap labour from abroad that are willing to operate as temporary employees and pay the tax accordingly.

[poorautojobber]

I ' run a business' and I'm 'self-employed' the terms get used interchangeably whatever you use doesn't really matter except to HMRC and a judge.
What HMRC are trying to do is take your right to present your argument to a judge away and put it in the hands of someone who maybe can barely read let alone understand the law.

I'm getting out of a big Co as we speak because I'm not convinced they would have the skill or knowledge to implement any changes in the short term correctly they will get wise but could take years.
Get your contracts reviewed confirm you really do have a right of substitution and as far as HMRC CEST seems concerned you are not subject to IR35. I'm not btw just incase hectors watching <modsnip>

[mudskipper]

So use whatever terms you're comfortable with (but make sure they are ones that your MP will understand)

I doubt there's nearly as many constituencies where the contractor community is larger than the majority - sometimes it's useful to throw our hat in with others who work for themselves, regardless of vehicle.

Whilst IR35 does not apply to SchedD self-employed, their employment status is still subject to challenge. They have seen their own attacks. The message 'leave the self employed alone' is a good one.

If course, you're perfectly within your rights to do nothing, say it's all pointless and that IPSE and others do not know what they're doing. Or you can write to your MP, using your own language to describe what you do and the impact that such a rollout would have on your way of working.