IR35 - does it need binning?

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Anyone listen to the LBC debate on IR35 last night? Was very good.

Probably on a PodCast somewhere.
 

A.N.Other

Old-Salt
Anyone listen to the LBC debate on IR35 last night? Was very good.

Probably on a PodCast somewhere.
Was it on Ian Dale's show and at what time? He has been really critical of HMRC, IR35 and the Loan Charge.

It's easy enough to listen to on the app or website and skip to the time of the discussion.
 
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Deleted 169889

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Was it on Ian Dale's show and at what time? He has been really critical of HMRC, IR35 and the Loan Charge.

It's easy enough to listen to on the app or website and skip to the time of the discussion.
Ian Dale has been vocal on the [plight of the contractor If only a humble baggies supporter could have the same platform. @bobthebuilder cpould learn a thing or two about the differences between contracting and disguised employment. @bobthebuilder is in need of some education on this and other matters pertaining
 
Ian Dale has been vocal on the [plight of the contractor If only a humble baggies supporter could have the same platform. @bobthebuilder cpould learn a thing or two about the differences between contracting and disguised employment. @bobthebuilder is in need of some education on this and other matters pertaining
Go on then, educate me; the only definition that matters is that used by HMRC. I've provided references to the primary legislation and even quoted from it (ITEPA). I've provided links to and quotes from the relevant HMRC guidance notes. It's not hard, but for the terminally dim, if you are claiming to be outside IRC35 when in fact you are inside, then you are disguising your employment. That's what IR35 is and always has been about.

For the avoidance of doubt, the core contractual tests are Control & Direction, Substitution and Mutuality. The fact is that the vast majority of self employed and PSC contractors cannot credibly fulfil the substitution obligation. Add in further tests like Provision of Equipment, Financial Risk, Basis of Payment, Part & Parcel and Exclusive Service, Intention and In Business on Your Own Account and few contractors stand scrutiny.

I'm guessing you one of the many "contractors' who has deliberately avoided tax by operating outside of IR35 when in fact you were disgusting employment. Genuine contractors have nothing to fear from IR35. The fact is most aren't genuine; they may operate as a business in their own account, but they fail nearly every other test.

I'm following an old colleague whining of Facebook on this. For approaching ten years, he's been contracting to the same company in a project management role. He had control of project budget, carried company business cards, attended company meetings, was listed on directories, faced the client, had a permanent desk in the office with company computer and email address, reported to a director and had people reporting to him. He's never provided a substitute; he couldn't. And now he, and another 1000 or so "contractors' working for that company have been caught. He knew he was inside IR35 but he thought he'd get away with it. The company, like many, took the view that tax was a matter for the employee or contractor and encouraged contract working. Tough. He's avoided tax for years and deserves a bill.
 

ClentBoy

War Hero
Go on then, educate me; the only definition that matters is that used by HMRC. I've provided references to the primary legislation and even quoted from it (ITEPA). I've provided links to and quotes from the relevant HMRC guidance notes. It's not hard, but for the terminally dim, if you are claiming to be outside IRC35 when in fact you are inside, then you are disguising your employment. That's what IR35 is and always has been about.

For the avoidance of doubt, the core contractual tests are Control & Direction, Substitution and Mutuality. The fact is that the vast majority of self employed and PSC contractors cannot credibly fulfil the substitution obligation. Add in further tests like Provision of Equipment, Financial Risk, Basis of Payment, Part & Parcel and Exclusive Service, Intention and In Business on Your Own Account and few contractors stand scrutiny.

I'm guessing you one of the many "contractors' who has deliberately avoided tax by operating outside of IR35 when in fact you were disgusting employment. Genuine contractors have nothing to fear from IR35. The fact is most aren't genuine; they may operate as a business in their own account, but they fail nearly every other test.

I'm following an old colleague whining of Facebook on this. For approaching ten years, he's been contracting to the same company in a project management role. He had control of project budget, carried company business cards, attended company meetings, was listed on directories, faced the client, had a permanent desk in the office with company computer and email address, reported to a director and had people reporting to him. He's never provided a substitute; he couldn't. And now he, and another 1000 or so "contractors' working for that company have been caught. He knew he was inside IR35 but he thought he'd get away with it. The company, like many, took the view that tax was a matter for the employee or contractor and encouraged contract working. Tough. He's avoided tax for years and deserves a bill.
@gibsons dog you are so right speaking as a humble VILLA fan what a few days we have both have had with our West Midlands teams @bobthebuilder has posted nothing but drivel in his interpretation of IR35 his lack of education on the subject to those of us who are qualified professionals is quite simply laughable his so called links to HMRC simply indicate the actions of an amateur who has no grasp of the subject as for his attempts at an interpretation of primary legislation his comments simply prove his ineptitude.
 
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Go on then, educate me; the only definition that matters is that used by HMRC. I've provided references to the primary legislation and even quoted from it (ITEPA). I've provided links to and quotes from the relevant HMRC guidance notes. It's not hard, but for the terminally dim, if you are claiming to be outside IRC35 when in fact you are inside, then you are disguising your employment. That's what IR35 is and always has been about.

For the avoidance of doubt, the core contractual tests are Control & Direction, Substitution and Mutuality. The fact is that the vast majority of self employed and PSC contractors cannot credibly fulfil the substitution obligation. Add in further tests like Provision of Equipment, Financial Risk, Basis of Payment, Part & Parcel and Exclusive Service, Intention and In Business on Your Own Account and few contractors stand scrutiny.

I'm guessing you one of the many "contractors' who has deliberately avoided tax by operating outside of IR35 when in fact you were disgusting employment. Genuine contractors have nothing to fear from IR35. The fact is most aren't genuine; they may operate as a business in their own account, but they fail nearly every other test.

I'm following an old colleague whining of Facebook on this. For approaching ten years, he's been contracting to the same company in a project management role. He had control of project budget, carried company business cards, attended company meetings, was listed on directories, faced the client, had a permanent desk in the office with company computer and email address, reported to a director and had people reporting to him. He's never provided a substitute; he couldn't. And now he, and another 1000 or so "contractors' working for that company have been caught. He knew he was inside IR35 but he thought he'd get away with it. The company, like many, took the view that tax was a matter for the employee or contractor and encouraged contract working. Tough. He's avoided tax for years and deserves a bill.
@bobthebuilder the right of substitution is to demonstrate that the end client doe not need need the contractor to deliver a service personally @bobthebuilder perhaps you should recollect that we are talking about business to business agreements for the supply of services the Crux @bobthebuilder is that the substitute doesn't need to an employee of said contractors Ltd company it just be someone the contractor knows is able to deliver the service and further the contract merely needs to state that the contractors ltd company is liable for any and all costs associated with the substitute.

hopefully that makes sense to you @bobthebuilder


Thanks for your kind words @ClentBoy I couldn't agree more
 
@bobthebuilder the right of substitution is to demonstrate that the end client doe not need need the contractor to deliver a service personally @bobthebuilder perhaps you should recollect that we are talking about business to business agreements for the supply of services the Crux @bobthebuilder is that the substitute doesn't need to an employee of said contractors Ltd company it just be someone the contractor knows is able to deliver the service and further the contract merely needs to state that the contractors ltd company is liable for any and all costs associated with the substitute.

hopefully that makes sense to you @bobthebuilder


Thanks for your kind words @ClentBoy I couldn't agree more
I posted earlier a specific quote from the ITEPA which clearly states that IR35 applies irrespective of the status of the parties. The client can be an individual in a B2C arrangement.

Next substitution. Your interpretation is at odds with the recent Appeal Court ruling which found that the substitution clause was a sham and rules that the contractors were in fact employees. I’m not arguing that the substitute has to be an employee of the contractors limited company, simply that it has to be genuine, acceptable to the client and available. The Appeal Court case found that the contractors didn’t even know that the substitution clause existed never making genuine steps to be able to comply with the contract.

I stand by my view that most PSC contractors have no genuine means of fulfilling their substitution obligations.
 
@bobthebuilder I reject your hypothesis making a sweeping generalisation
What hypothesis? HMRCs states view is that 90% of contracts are disguised employment. As businesses start to fulfil their new obligations under Section 8 of ITEPA they are concluding that most of their contractors are in fact employees.

When you logically follow through the rules, guidance and tests that have been in place for 20 years it’s hard not to agree.
 

ClentBoy

War Hero
What hypothesis? HMRCs states view is that 90% of contracts are disguised employment. As businesses start to fulfil their new obligations under Section 8 of ITEPA they are concluding that most of their contractors are in fact employees.

When you logically follow through the rules, guidance and tests that have been in place for 20 years it’s hard not to agree.
Yes I fully agree with @gibsons dog your hypothesis @bobthebuilder are structurally unsound and do not reflect the manuals given to HMRC Inspectors your opinions although literal and in real life laughable but yes Sec 8 of ITEPA concludes that most of their contractors are in fact employees but when tested at 1st tier tribunals the legislation is ambiguous and unsound
 
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Deleted 169889

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What hypothesis? HMRCs states view is that 90% of contracts are disguised employment. As businesses start to fulfil their new obligations under Section 8 of ITEPA they are concluding that most of their contractors are in fact employees.

When you logically follow through the rules, guidance and tests that have been in place for 20 years it’s hard not to agree.
Hmrc hasn't assessed those hundreds of thousands of contracts That statement is conjecture @bobthebuilder
I'd invite you to follow the campaign by Dave 'the rave' Chaplain. Her Majesties Robbers and Crooks are unaccountable and have gone rogue. The treasury will receive less taxes than before and cripple the UKs ability to complete project work @bobthebuilder
 
Hmrc hasn't assessed those hundreds of thousands of contracts That statement is conjecture @bobthebuilder
I'd invite you to follow the campaign by Dave 'the rave' Chaplain. Her Majesties Robbers and Crooks are unaccountable and have gone rogue. The treasury will receive less taxes than before and cripple the UKs ability to complete project work @bobthebuilder
How on earth is it going to cripple the UKs ability to complete project work?

There’s a market for short term contract work. There’s a supply of people who want project work. The two will engage, market forces will prevail and a new price point will be established.

Employers aren’t suddenly going to create permanent roles. They’ll do what my former employer did when they realised that their 30% employee, 70% contractor model didn’t comply with their FCPA obligations since many contractors were client facing; they introduced zero hours contracts of employment for non-permanent staff.
 

ClentBoy

War Hero
How on earth is it going to cripple the UKs ability to complete project work?

There’s a market for short term contract work. There’s a supply of people who want project work. The two will engage, market forces will prevail and a new price point will be established.

Employers aren’t suddenly going to create permanent roles. They’ll do what my former employer did when they realised that their 30% employee, 70% contractor model didn’t comply with their FCPA obligations since many contractors were client facing; they introduced zero hours contracts of employment for non-permanent staff.
@gibsons dog is quite correct the amount of CT600 revenue lost is staggering with the new interpretation of IR35 HMRC have shot themselves in the foot with this UK project work is dead and a Conservative government led by an idiotic woman and her pathetic lap dog Chancellor now both now discredited are the cause of the destruction of British business just pure madness and sadly @bobthebuilder simply does not understand the fundamental workings of HMRC and continues to simply makes himself look a fool with his responses to @gibsons dog
 
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@gibsons dog is quite correct the amount of CT600 revenue lost is staggering with the new interpretation of IR35 HMRC have shot themselves in the foot with this UK project work is dead and a Conservative government led by an idiotic woman and her pathetic lap dog Chancellor now both now discredited are the cause of the destruction of British business just pure madness and sadly @bobthebuilder simply does not understand the fundamental workings of HMRC and continues to simply makes himself look a fool with his responses to @gibsons dog
Christ you're a muppet; is @gibsons dog your more literate sock?

Of course CT600 tax will go down, but that will be offset by employers ERNIC and income tax. Meanwhile a whole layer of bureaucratic overhead will be removed; all you "highly skilled" accountants who add nothing to the value chain but leach money out from the relationship between employer and employee.

Why on earth would changing the tax position kill project work? You have no evidence to support that conjecture. Its basic supply and demand; the tax position changes nothing. BTW just to further highlight the dumbness that assertion, ITEPA Section 8 doesn't apply to 99.% of the private sector. I'll leave you to work out why.

Which bit of fact have you missed. Gordon Brown introduced IR35 in 2000. During Hammond's time as Chancellor, the only thing he introduced was the Off-Payroll Regulations in ITEPA Section 8. ITEPA 8 changes the responsibility for identifying whether a role is inside or outside of IR35 from employee / contractor to employee.

Funnily enough, those medium businesses turning over more than 10.2M and all large businesses (1% of the private sector) don't see it your way. They are rapidly changing the way they hire project staff to meet demand. Not one of them has raised concerns that they won't be able to.

The noise all comes from those who have avoided tax by disguising employment, often for decades. Or it comes from those who leach money out of the value chain in administration overhead.
 
How on earth is it going to cripple the UKs ability to complete project work?

There’s a market for short term contract work. There’s a supply of people who want project work. The two will engage, market forces will prevail and a new price point will be established.

Employers aren’t suddenly going to create permanent roles. They’ll do what my former employer did when they realised that their 30% employee, 70% contractor model didn’t comply with their FCPA obligations since many contractors were client facing; they introduced zero hours contracts of employment for non-permanent staff.
‘self employed‘ contractors,Aka, business’s avoiding paying sick pay, pensions and holidays to fixed term contract staff,
 
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Deleted 169889

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‘self employed‘ contractors,Aka, business’s avoiding paying sick pay, pensions and holidays to fixed term contract staff,
Indeed @PhotEx the door is opened by ir35 to create zero rights employees either an individual should be deemed an employee or an independent contractor

Inside ir35 is the worst of both worlds which @bobthebuilder seems unable to grasp how long before companies simply decide to fill their entire workforce with zero rights employees
 

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