Ir35
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Guerillatoker
Posts: 625 Forumite
in Cutting tax
I'll be honest, there isn't much point to this thread, its mostly to moan and express solidarity with my fellow sufferers.
Anyone else caught under this nonsense legislation - being taxed as a normal employee but receiving none of the rights?
Unfortunately I'm in the sector that unilaterally decided to make all of its contractors in-scope of IR35 with no input from us or any evaluation of our contracts, so I'm stuck in with my main contract. :money:
If anyone has any tips and tricks or useful info to make life under IR35 any easier then please share.
Anyone else caught under this nonsense legislation - being taxed as a normal employee but receiving none of the rights?
Unfortunately I'm in the sector that unilaterally decided to make all of its contractors in-scope of IR35 with no input from us or any evaluation of our contracts, so I'm stuck in with my main contract. :money:
If anyone has any tips and tricks or useful info to make life under IR35 any easier then please share.
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Comments
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The compensation for the downsides of IR35 is that you should be on a significantly higher rate than an employee. If you're not then that's poor negotiating on your part.0
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Guerillatoker wrote: »Anyone else caught under this nonsense legislation - being taxed as a normal employee but receiving none of the rights?
But also, earning far more than a normal employee hopefully. It should be a matter for the worker/engager to negotiate terms - if an employer wants flexible short term contractors with specialist skills, then they need to pay accordingly - if they want to avoid employment obligations such as holiday pay, sick pay, training, redundancy etc, then again they have to pay. It's not really a matter for HMRC/Treasury (ultimately taxpayer) to subsidise contractors by means of lower tax/nic, which is exactly why IR35 exists.0 -
Guerillatoker
Do you genuinely think your work is that of a contractor and not an employee? If so, have you completed the HMRC tool to determine whether the role is in or out of scope for IR35?
If you're working in the public sector this article may be informative;
https://www.accountingweb.co.uk/tax/hmrc-policy/ir35-thousands-of-contractors-have-been-wrongly-taxed
I recently successfully challenged the assessment for the short term contract I'm currently on. The key points were whether my company, not an umbrella, could provide another worker who would be acceptable for the role if I wasn't able to continue, the level of autonomy I am allowed to complete the work and finally, my role is not gapping a permanent post. However, out of the dozen or so "contractors" I'm working alongside, I was the only one who met that criteria.0 -
But also, earning far more than a normal employee hopefully. It should be a matter for the worker/engager to negotiate terms - if an employer wants flexible short term contractors with specialist skills, then they need to pay accordingly - if they want to avoid employment obligations such as holiday pay, sick pay, training, redundancy etc, then again they have to pay. It's not really a matter for HMRC/Treasury (ultimately taxpayer) to subsidise contractors by means of lower tax/nic, which is exactly why IR35 exists.
Of course, I wouldn't do it if it wasn't worth it, so I'm not going to act too hard done by.
Is it not actually subsidising the "employer" though? They get their specialist contractor - HMRC gets increased tax revenue - the contractor gets nothing. The "employer" pay better rates to be able to find specialist labour at ease and to avoid obligations over employment benefits. The contractor on the other hand still has to cover the costs of owning a business but don't get any of the tax relief that any other business owner would get.
I wonder what would happen if someone tried to pull a Plimco Plumbers case using the IR35 "stealth employment" language to support their case. I have no intention to do this btw, just a thought exercise (I don't know the answer either).
EDIT: Just noticed that I missed your the point of your post and you're actually making the same point I am making here.0 -
Guerillatoker
Do you genuinely think your work is that of a contractor and not an employee? If so, have you completed the HMRC tool to determine whether the role is in or out of scope for IR35?
If you're working in the public sector this article may be informative;
https://www.accountingweb.co.uk/tax/hmrc-policy/ir35-thousands-of-contractors-have-been-wrongly-taxed
I recently successfully challenged the assessment for the short term contract I'm currently on. The key points were whether my company, not an umbrella, could provide another worker who would be acceptable for the role if I wasn't able to continue, the level of autonomy I am allowed to complete the work and finally, my role is not gapping a permanent post. However, out of the dozen or so "contractors" I'm working alongside, I was the only one who met that criteria.
Nice one on winning your assessment dispute :money:
It is an interesting one, my short term contract isn't clear on substitution but on a practical level there is no reason why I couldn't. I have full autonomy. Not sure how to prove I'm gapping a permanent post. My Public Sector contractor introduced it as a blanket to all contracts started after early 2017. I know people who do the same role as me whose contracts from before that time have been renewed without putting them In-Scope.
This was my first contractor role so I'll admit I was far too confused to understand IR35 upon acceptance, information about off-payroll working is terribly opaque on the internet. I will no doubt find myself a decent Private Sector contract out of scope eventually so I'm not asking for anyone's sympathy, just discussion.0 -
The GMPFive Consulting Ltd (GMP5) would be hilarious if it was not so deadly serious for the directors of that company.
This company provided software services to HMRC for 2 years 2013 to 2015. The end employer - HMRC IT - had assessed the contract as being very firmly outside of IR35 and settled the company invoices accordingly.
Then in July 2015, the Numpty Department of HMRC - which is normally most of HMRC but in this case we refer to the IR35 section - sent the company a letter saying that it was assessing whether the contract with HMRC was inside or outside IR35.
After extensive correspondence, the inspector determined in September 2016 that in fact this contract was very firmly inside IR35 and duly raised an assessment for an extra £59k of tax.
I am writing an article for my local paper which will be entitled "HMRC sues HMRC!" Whilst this is strictly not technically accurate, what is not in doubt is that the Numpty Department of HMRC wasted plenty of taxpayers' scarce resources on this case before finally dropping it in July 2018. So 3 years of stress and expense for the unfortunate victims of the Numpty Department.
The lesson here for all contractors is clear. If one part of HMRC can disagree violently with another part over the IR35 status of a given contractor, this highlights what an utter shambles HMRC has made of IR35 since 1999.
And NEVER, NEVER accept anyone's assessment that your contract is a "slam dunk, inside of IR35, bad luck mate" situation.Hideous Muddles from Right Charlies0 -
Was reading about that HMRC IR35 case the other day...what a complete and utter joke.0
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