IR35 - does it need binning?

  • Thread starter Deleted 163822
  • Start date

ClentBoy

War Hero
A single unintelligible sentence of 181 words. No paragraph structure and no punctuation. Random irrelevant factoids about Maslow and Keynes that have no relevance to the debate. It's not the logical, incisive work of someone who has studied at one of the world's top business schools. Not that one would expect to find a Harvard MBA stuffing around with IR35 cases.

Keynes, by the way, was a macro-economist who wrote nothing of note about business structure. Even if he had, he would have been the best part of a hundred years late. The basic business structure of limited liability companies dates back to the Joint Stock Companies Act 1856, the features of which were largely retained in the Companies Act 2006. I've given you the specific paragraph of the latter act which defines four types of company. Three of those types were defined in 1856.

Sole traders and partnerships are entirely relevant to IR35. Section 46 of Chapter 7 of the Income Tax (Earnings and Pensions) Act 2003 deals specifically with the case of unincorporated bodies. Here it is:

46 Cases involving unincorporated bodies etc.
(1) Section 44 also applies—
(a) if the worker personally provides, or is under an obligation to personally provide, the services in question as a partner in a firm or a member of an unincorporated body;
(b) if the agency in question is an unincorporated body of which the worker is a member.
(2) In a case within subsection (1)(a), remuneration receivable under or in consequence of the agency contract is to be treated for income tax purposes as income of the worker and not as income of the firm or body.


Note also the Section 44 (1) which states that the section applies if:

an individual (“the worker”) personally provides, or is under an obligation personally to provide, services (which are not excluded services) to another person (“the client”)

Nowhere does it mention exemptions for industry sectors, corporate structures or anything else. Its universal.
Frankly haven't had any need for punctuation for 22 years so who cares but yes I loved my time at Harvard Business School its not all that big there was about 1800 on campus when I was there it was an amazing place at Allston on the Charles river with nine different campus covering its faculties with a specific business school, my first degree and professional training was in the UK but they did a student swap with my University MBA with theirs as it was so new in 1996 we were the first to study one at my Uni our MBA was invigilated by the Harvard Business School. I was quoting Keynes and his macro economic theorem which is basically the structural environment which all businesses operate in todays free market sadly unless unincorporated bodies were within the scope of PAYE until 2016 HMRC took a soft touch in compliance to Sole Traders and Partnerships I am sure you will agree that the IR35 is now all encompassing to all business structures.
 
Last edited:
I was quoting Keynes and his macro economic theorem which is basically the structural environment which all businesses operate in todays free market sadly unless within the scope of PAYE until 2016 HMRC took a soft touch in compliance to Sole Traders and Partnerships I am sure you will agree that the IR35 is now all encompassing to all business structures.
Macroeconomics is the study of factors applying to the economy as a whole; interest rates, employment levels and GDP. Its got nothing to do with the "principles of business structure" nor is it 'the fundamental base of UK companies is built upon". There is zero connection between Keynesian economics and English company law.

With a pedant hat on, Keynes didn't postulate a "macro economic theorem". A theorem is a result that can be proven to be true from a set of axioms. The term is used especially in mathematics where the axioms are those of mathematical logic and the systems in question. A theory is a set of ideas used to explain why something is true, or a set of rules on which a subject is based on. Keynes postulated theories.

You are once again asking me to agree with myself. I have consistently argued that IR35 applied universally to alll businesses; it is you that has been arguing otherwise. IR35 has always been encompassing to all business structures. Indeed the Off-Payroll Working Regulations (ITEPA Section 8) have always been all encompassing, but the private sector had a longer implementation period.
 

ClentBoy

War Hero
Macroeconomics is the study of factors applying to the economy as a whole; interest rates, employment levels and GDP. Its got nothing to do with the "principles of business structure" nor is it 'the fundamental base of UK companies is built upon". There is zero connection between Keynesian economics and English company law.

With a pedant hat on, Keynes didn't postulate a "macro economic theorem". A theorem is a result that can be proven to be true from a set of axioms. The term is used especially in mathematics where the axioms are those of mathematical logic and the systems in question. A theory is a set of ideas used to explain why something is true, or a set of rules on which a subject is based on. Keynes postulated theories.

You are once again asking me to agree with myself. I have consistently argued that IR35 applied universally to alll businesses; it is you that has been arguing otherwise. IR35 has always been encompassing to all business structures. Indeed the Off-Payroll Working Regulations (ITEPA Section 8) have always been all encompassing, but the private sector had a longer implementation period.
Fair points I am sure & I am glad to see your finally agreeing with your own opinions on IR35 although I personally cannot agree with any of it from my own personal day to day dealings with HMRC & Companies House I stand by my previous posts fully and the direction we receive from our accountancy Institutes Tax Faculty however.
 
Last edited:

A.N.Other

Old-Salt
My congratulations to BobTheBuilder and ClentBoy on what must be their upcoming nuptuals and for killing what was an informative and useful thread.
 

ClentBoy

War Hero
My congratulations to BobTheBuilder and ClentBoy on what must be their upcoming nuptuals and for killing what was an informative and useful thread.
We have only been discussing the legislation and technical points that is applicable . HMRC have indicated today IR35 will be blanketed across all sectors fell free to raise any concerns and thoughts on this very important matter I am sure BobTheBuilder will agree we both only want to provide clarification on this matter and do not want to stifle comments on this informative and useful thread.
 

A.N.Other

Old-Salt
Sorry but from my point of view your discussion started to take up more space in the thread than anything else, was very technical and at time attacking each other. It took over the thread.

I'd suggest that such strong arguments where you have diametrically opposed positions should not be held in a thread for all to see. It gets confusing and to be honest the one-upmanship re qualifications came across as childish at times. Despite a couple of polite nudges from other posters it kept going.

It would have been better if the discussion had moved to PM and once you have an agreed position it is posted to the thread.
 

ClentBoy

War Hero
Sorry but from my point of view your discussion started to take up more space in the thread than anything else, was very technical and at time attacking each other. It took over the thread.

I'd suggest that such strong arguments where you have diametrically opposed positions should not be held in a thread for all to see. It gets confusing and to be honest the one-upmanship re qualifications came across as childish at times. Despite a couple of polite nudges from other posters it kept going.

It would have been better if the discussion had moved to PM and once you have an agreed position it is posted to the thread.
I do not agree there was never any form of one upmanship we were discussing the relevant merits of the legislation of IR35 in constructive form as it currently applies do you not want a legitimate debate on this very serious matter that effects many from the 6th April 2020 & I am never childish I pride myself with my professionalism in my work for my clients & was only aiming to clarify the technical matters on this serious thread with Bob The Builder and do not agree we are from diametrically different positions but interpret them from Bob The Builders academic perspective which I fully respect and mine from day to day engagement with HMRC and Companies House sadly I very much regret you disagree?
 
Last edited:
Sorry but from my point of view your discussion started to take up more space in the thread than anything else, was very technical and at time attacking each other. It took over the thread.

I'd suggest that such strong arguments where you have diametrically opposed positions should not be held in a thread for all to see. It gets confusing and to be honest the one-upmanship re qualifications came across as childish at times. Despite a couple of polite nudges from other posters it kept going.

It would have been better if the discussion had moved to PM and once you have an agreed position it is posted to the thread.
Was anyone else posting? It’s perfectly possible to have multiple discussions going on a thread; if you don’t like part of the debate, ignore it. If its that bad, just put the protagonists on ignore. The fact is though that @ClentBoy has been and still is spouting bollocks that needed to be challenged and he still is.

My own perspective is not as @ClentBoy suggests, an academic one. I am not an academic. I have, however been on both client and consultant sides of IR35 in multiple roles and different corporate structures. And I do happen to have both an MBA and a IoD Certificate in Company Direction, not that I have mentioned it other than to point ClentBoy in the direction of some learning. I have always taken the view that businesses should properly understand the legal environment in which they operate.

ClentyBoy is now claiming that "HMRC have indicated today IR35 will be blanketed across all sectors". I've posted the relevant legislation which shows that to be wrong. To be clear, IR35 has applied across all sectors and all business structures since introduction in 2000. The Off-Payroll Tax rules that change who is responsible for identifying status apply to all sectors from April 2000. However they do not apply to Small Enterprises.

I've put @ClentBoy on ignore as he's wasting far too much of my time. I've come to the conclusion he's been trolling me and making stuff up as he goes along.
 
‘I’m so clever! I don’t pay a penny in tax’ contractors still crying bitter tears now the taxmans caught up with them?

what was that sage advice my accountant gave me all them years ago when I was a sole trader...’if it sounds too good to be true, it is, and the taxman will come after you eventually.’
 

ClentBoy

War Hero
‘I’m so clever! I don’t pay a penny in tax’ contractors still crying bitter tears now the taxmans caught up with them?

what was that sage advice my accountant gave me all them years ago when I was a sole trader...’if it sounds too good to be true, it is, and the taxman will come after you eventually.’
Personally I cannot see what the fuss is about if contractors took the correct professional advice and structured their companies in the manner I was trying to explain to @bobthebuilder there is not an real issue with IR35 not a single one of our sub contractor clients operating through a PSC has been deemed by their contractor to be within the scope of IR35
 

Tyk

LE
Personally I cannot see what the fuss is about if contractors took the correct professional advice and structured their companies in the manner I was trying to explain to @bobthebuilder there is not an real issue with IR35 not a single one of our sub contractor clients operating through a PSC has been deemed by their contractor to be within the scope of IR35
Hogwash. Oh and I don't believe for a second that you have the qualifications you claim.
 
Hogwash. Oh and I don't believe for a second that you have the qualifications you claim.
“Not a single one” would be a round true if he Is a bullshitting walt who has no clients! Equally he could be advising clients who consult in roles which are clearly outside of IR35.

it’s simply not true that the structure of a PSC affects whether an individual is inside or outside of IR35; it’s not and never has been one of HMRCs tests.
 

Tyk

LE
“Not a single one” would be a round true if he Is a bullshitting walt who has no clients! Equally he could be advising clients who consult in roles which are clearly outside of IR35.

it’s simply not true that the structure of a PSC affects whether an individual is inside or outside of IR35; it’s not and never has been one of HMRCs tests.
Indeed, as someone who's been Ltd incorporated for well over 20 years and is quite aware of how IR35 works and is applied in practice, he's talking through an orifice not designed for the task.
 
Personally I cannot see what the fuss is about if contractors took the correct professional advice and structured their companies in the manner I was trying to explain to @bobthebuilder there is not an real issue with IR35 not a single one of our sub contractor clients operating through a PSC has been deemed by their contractor to be within the scope of IR35
I’ve made the mistake of viewing the hogwash you posted today. I’m responding since you named me in your post.

It’s simply not true that the structure of a PSC affects whether an individual is inside or outside of IR35; it’s not and never has been one of HMRCs tests.

For the avoidance of doubt follow the questions in HMRCs own test and advise us how you can “structure a PSC” to stay outside of IR35. https://www.tax.service.gov.uk/check-employment-status-for-tax/disclaimer

How do you advise a PSC client to manage the right of substitution?
 
Indeed, as someone who's been Ltd incorporated for well over 20 years and is quite aware of how IR35 works and is applied in practice, he's talking through an orifice not designed for the task.
Interesting stat about the HMRC employment status checker questionnaire I posted earlier. They expect 90% of test cases to be inside IR35. A stat that highlights just how much tax avoidance has been going on.

Clenty must select his clients carefully if they all fall in to the 10% who are outside IR35. Actually, it’s much less than 10% since he’s claiming that not a single client has determined that the PSC is inside IR35. Which limits the sample to public sector or large and medium enterprises.

He’s a bullshitting buffoon of gamlinian scale.
 

ClentBoy

War Hero
I’ve made the mistake of viewing the hogwash you posted today. I’m responding since you named me in your post.

It’s simply not true that the structure of a PSC affects whether an individual is inside or outside of IR35; it’s not and never has been one of HMRCs tests.

For the avoidance of doubt follow the questions in HMRCs own test and advise us how you can “structure a PSC” to stay outside of IR35. https://www.tax.service.gov.uk/check-employment-status-for-tax/disclaimer

How do you advise a PSC client to manage the right of substitution?
Oh that is so simple substitution is done by another of our clients working in the same field.
 
Interesting stat about the HMRC employment status checker questionnaire I posted earlier. They expect 90% of test cases to be inside IR35. A stat that highlights just how much tax avoidance has been going on.

Clenty must select his clients carefully if they all fall in to the 10% who are outside IR35. Actually, it’s much less than 10% since he’s claiming that not a single client has determined that the PSC is inside IR35. Which limits the sample to public sector or large and medium enterprises.

He’s a bullshitting buffoon of gamlinian scale.
The problem with every status checker they've made is that it is weighted heavily towards people being inside IR35 and ignores case law that would put people outside IR35

Plenty of people that have been declared outside IR35 in a court of law fail their status checker on the same facts

It should be taken with a pinch of salt

And as for HMRC saying they expect 90% of people to be inside, the would say that wouldn't they....
 
Interesting stat about the HMRC employment status checker questionnaire I posted earlier. They expect 90% of test cases to be inside IR35. A stat that highlights just how much tax avoidance has been going on.

Clenty must select his clients carefully if they all fall in to the 10% who are outside IR35. Actually, it’s much less than 10% since he’s claiming that not a single client has determined that the PSC is inside IR35. Which limits the sample to public sector or large and medium enterprises.

He’s a bullshitting buffoon of gamlinian scale.

I know a few people who are 'self employed' in the IT industry - all complaining bitterly they won't have contracts renewed come April - all been working solely for their outfit for years
 
The problem with every status checker they've made is that it is weighted heavily towards people being inside IR35 and ignores case law that would put people outside IR35

Plenty of people that have been declared outside IR35 in a court of law fail their status checker on the same facts

It should be taken with a pinch of salt

And as for HMRC saying they expect 90% of people to be inside, the would say that wouldn't they....
If you follow through the status checker, all it does is ask Yes / No questions for each of the tests that HMRC have published for years. The tests are HMRC's interpretation of the law; they aren't statutory. So its quite right and proper that they can be tested in a court of law.

As for the 90% statistic, if one analyses the substitution tests, it's very hard to see how most self-employed or PSC contractors can pass the test as they have no means of substitution. It is the intermediary (if there is one) who can substitute.

The latest bit of case law has firmly sided with HMRC and wired the smug smile of the fat, smug, tax-avoiding git that is Eamonn Holmes. Quite how the face of major TV show like This Morning can possibly be anything but an employee beats me. He's the customer facing representative of ITV working to a schedule that ITV defines, he takes near zero entrepreneurial risk, uses company tools and equipment to deliver his work, his PSC can't provide a substitute etc etc. And yet the cnut claims to consider himself self-employed, despite working through a PSC.
 

Latest Threads

Top