IR35 abuses by employers/clients

Marcon

Ddeebbiiee said:

I am a contractor working in psychological at an independent school. The school have engaged my services as a selfemployed counsellor for the last 14 years. I have been issued with a contract covering  September to the end of the academic year (end of June) for every one of the 14 years. 

In starting talks yesterday the contractor told me they see me as employed and therefore coming under the terms of IR35. They told me they will be cutting my fee (by approximately half to two thirds) and advertising the role as two jobs; one of which I can apply for. 

I understood IR35 is an HMRC new rule brought about to deal with tax evasion.

I would take a huge drop in my fee in that I would take a huge reduction in my personal income and not be able to claim any travel or other expenses related to my self employment status.
Can anyone advise if this abuse of HMRCs IR35 and what appears to me to be a cynical manipulation of the intended purpose of this new HMRC ruling by taking  huge amounts of money away from contractors, is legally acceptable, and if so how it can be legally challenged.

Falling within the scope of IR35 doesn't make you a 'full' employee - it's a most peculiar halfway status which many contractors (and employers!) don't fully understand.

Are they talking about making these two roles true employee roles - i.e. with benefits such as holiday, pension, sickness pay etc? Simply being classed by the school as 'within IR35' doesn't mean you'll get such benefits.

If you apply for one of these roles, will it be part time? If so, is there anything to stop you looking for work elsewhere - or offering your services as a counsellor via Zoom, as many are now doing, and keeping your self employment status that way?

motorguy

unforeseen said:

motorguy said:

Thrugelmir said:

If you are based at the school. What travel and other expenses do you incur? 

He would have been able to claim mileage from his office (usually home) to his place of work

Not after 2 years he wouldn't. HMRC consider that if your contract exceeds 2 years or you know before that it will exceed 2 years at the same place then it is your permanent place of employment and you can not claim for the commute

As has been said, 9 months contracts then three months out.

motorguy

unforeseen said:

I'm not an expert on tax but I would think that HMRC would look closely at those circumstances and consider it continuous with breaks due to school holidays. 

The rules for claiming state that period of continuous work can remain continuous even where there is a break in attendance.
One of the examples given involve a 3 month break. 

They wont.  They wont look at all.

Theres a remote chance they might instigate an investigation but thats the only real scenario.

prowla

motorguy said:

Thrugelmir said:

If you are based at the school. What travel and other expenses do you incur? 

He would have been able to claim mileage from his office (usually home) to his place of work

Not after 2 years.

prowla

Ddeebbiiee said:

...

I understood IR35 is an HMRC new rule brought about to deal with tax evasion.

...

Tax avoidance, not evasion - the difference between the two is said to be the width of a prison wall...

motorguy

prowla said:

motorguy said:

Thrugelmir said:

If you are based at the school. What travel and other expenses do you incur? 

He would have been able to claim mileage from his office (usually home) to his place of work

Not after 2 years.

9 month contracts and three months out, not a continuous contract exceeding 2 years.

motorguy

prowla said:

Ddeebbiiee said:

...

I understood IR35 is an HMRC new rule brought about to deal with tax evasion.

...

Tax avoidance, not evasion - the difference between the two is said to be the width of a prison wall...

Yeah if you're Al Capone.  IR35 status, not so much.