IR35 - does it need binning?

True, but it’s a way to end rackets like making a Council Manager aged 55 ‘redundant’, giving him £550,000 in cash as a ‘redundancy’ payment, and then reemploying him on the Monday in exactly the same job as a ‘contractor’ until he retires in 5 years. Win-win for him, taxpayer royally ripped off. It’s become an accepted Spanish practice across local authorities in particular.

I see a lot of people these days who are with a firm so long as their sole ‘contract’, people think they are permanent staff which in reality they really are. Most ‘contractors’ Really aren’t, and a lot of people use IR35 to avoid tax with the connivance of their employer who keeps the seat warm until Monday. NHS has a lot of admin staff playing that racket.
Which is why the 24 mths max contract with 6 mths gap makes sense. I get none of the perks that Permies get, no invites to the company BBQ (sometimes that can be a good thing), no holiday, forced furlough, no sickpay and no wonderful 'career advancement'.
Instead I get pots of lovely cash....which is the only reason I would ever turn up to work anyway. All the rest of the supposed perks are total garbage. I want money, as much as I can get, so I can spend it on things I want or things that please me.

I have been on this contract for 13 mths now and I will be on to another contract in 7-8 mths time. Even if they tried to extend me, I would be out, as my expenses percentage gets reduced due to IR35 so I lose money.

The changes being made to IR35 in April are wrong and will hopefully be stopped or heavily altered.
 
That’s the badger.
Endemic in government, local authorities and the NHS.
De facto permanent employees avoiding tax.
Frequently made redundant junior and middle managers who walk out the door ‘redundant’ on Friday with a big pay off and walk back in the door on Monday as a ‘contractor’.
I’d argue that they are not avoidIng tax; they are evading it. The regulations and tests are clear and have been for nearly 20 years. Misrepresentation of employment status is a deliberate act to evade a lawful tax commitment.
 
Which is why the 24 mths max contract with 6 mths gap makes sense. I get none of the perks that Permies get, no invites to the company BBQ (sometimes that can be a good thing), no holiday, forced furlough, no sickpay and no wonderful 'career advancement'.
Instead I get pots of lovely cash....which is the only reason I would ever turn up to work anyway. All the rest of the supposed perks are total garbage. I want money, as much as I can get, so I can spend it on things I want or things that please me.
One of the reasons I've remained a contractor rather than going back to the Dark Side, is that should I find myself working for a kn*bhead boss, a sh*te mendacious organisation, or on a project that should have been killed with fire at conception, I can leave at my own whim (although you're only as good as your last reference), or refuse an extension. Given that all my contracts have started with a 3 or 6 month initial term, but always extended after that, It's comforting to know that don't have to put up with the bullsh*t for too long. I've only refused an extension on two contracts but the look on their faces when I just said no was priceless.
 
One of the reasons I've remained a contractor rather than going back to the Dark Side, is that should I find myself working for a kn*bhead boss, a sh*te mendacious organisation, or on a project that should have been killed with fire at conception, I can leave at my own whim (although you're only as good as your last reference), or refuse an extension. Given that all my contracts have started with a 3 or 6 month initial term, but always extended after that, It's comforting to know that don't have to put up with the bullsh*t for too long. I've only refused an extension on two contracts but the look on their faces when I just said no was priceless.
That is why I list 'Number of Extensions' for each role on my CV. It is a sign that you are doing a good / great job. I see extensions as a bonus / pat on the back, better and more effective than any performance review. My current contract is due to end in December, but if I don't get a commitment to extending past next March I will be looking for a new role in October. Looking for work Jan - Mar is usually quite depressing, and I don't fancy taking a filler role.
 

Brexit_Pride

Old-Salt
Which is why the 24 mths max contract with 6 mths gap makes sense. I get none of the perks that Permies get, no invites to the company BBQ (sometimes that can be a good thing), no holiday, forced furlough, no sickpay and no wonderful 'career advancement'.
Instead I get pots of lovely cash....which is the only reason I would ever turn up to work anyway. All the rest of the supposed perks are total garbage. I want money, as much as I can get, so I can spend it on things I want or things that please me.

I have been on this contract for 13 mths now and I will be on to another contract in 7-8 mths time. Even if they tried to extend me, I would be out, as my expenses percentage gets reduced due to IR35 so I lose money.

The changes being made to IR35 in April are wrong and will hopefully be stopped or heavily altered.
Ultimately, they'll lead to a reduced tax take as services are relocated to countries where it's less onerous to hire talent for finite length projects.

Forcing all folk working on a project into permanent employment drives up costs, reduces competitiveness and will see other more business friendly countries snap up the work.

Quite why the government wishes to hamstring business at this crucial juncture is beyond me.

Perhaps zero taxes for large corporations and the burden shifted onto the highly skilled is the model they are looking for.

**** business indeed
 
I’d argue that they are not avoidIng tax; they are evading it. The regulations and tests are clear and have been for nearly 20 years. Misrepresentation of employment status is a deliberate act to evade a lawful tax commitment.
It could help by harmonising tax and employment laws so there aren't loopholes, also it would be fairer if workers are to treated as employees for tax purposes that they get the rights and entitlements of an employee paid for by the deemed employer

A half way house where you tax people as employees, but let the employers evade their responsibilities as an employer is morally wrong
 
Ultimately, they'll lead to a reduced tax take as services are relocated to countries where it's less onerous to hire talent for finite length projects.

Forcing all folk working on a project into permanent employment drives up costs, reduces competitiveness and will see other more business friendly countries snap up the work.

Quite why the government wishes to hamstring business at this crucial juncture is beyond me.

Perhaps zero taxes for large corporations and the burden shifted onto the highly skilled is the model they are looking for.

**** business indeed
Perhaps the number of ex Ministers on the boards of the big consultancies plays a part, and the desire of HMRC to push as many people in permanent employment as possible

It's always been HMRC pushing the government into more IR35 legislation, no matter whether it's been Labour or the Tories in power
 

Brexit_Pride

Old-Salt
Perhaps the number of ex Ministers on the boards of the big consultancies plays a part, and the desire of HMRC to push as many people in permanent employment as possible

It's always been HMRC pushing the government into more IR35 legislation, no matter whether it's been Labour or the Tories in power
Yet they are not subject to any independent scrutiny as I understand.

Largely left to their own devices.

Can't find the link, but saw a report saying once accountancy predicts that the implementation change will raise the princely sum of £27M. Not billions as HMRC project.

They wouldn't get it wrong, would they?
 

Bluenose2

Old-Salt
True, but it’s a way to end rackets like making a Council Manager aged 55 ‘redundant’, giving him £550,000 in cash as a ‘redundancy’ payment, and then reemploying him on the Monday in exactly the same job as a ‘contractor’ until he retires in 5 years. Win-win for him, taxpayer royally ripped off. It’s become an accepted Spanish practice across local authorities in particular.
Am I being dim here (probably) but I can't see any possible financial incentive for the council to do this?

Genuine open question to everyone - how many instances have you actually seen someone deliberately made redundant with the intention of re-hiring as a contractor?

I've not witnessed a single one in 30 years across 6 industries (inc 2 years in the public sector) and only one instance of someone being reluctantly re-hired once the management team realised his skills were unique.
 

Brexit_Pride

Old-Salt
Have you considered self-immolation somewhere quiet and secluded?

That'll learn 'em.
No. Why do you wish harm and spend so much time posting about an internet stranger.

Are you jealous of skilled folk making a good whack consulting in the flexible market?

Has soldering wires and installing virgin media on council estates in civvy street knotted your gusset?
 

Tired_Tech

On ROPS
On ROPs
No. Why do you wish harm and spend so much time posting about an internet stranger.

Are you jealous of skilled folk making a good whack consulting in the flexible market?

Has soldering wires and installing virgin media on council estates in civvy street knotted your gusset?
I am skilled folk making a good whack.

last month my hobby netted me £1000. It's my fun money. I think this month my hobby is going to take in approx £2-2.5k.

If I read it right.

might sack off my highly skilled work at this rate.

ps less than 70 people in UK do what I do ;)
 
Am I being dim here (probably) but I can't see any possible financial incentive for the council to do this?

Genuine open question to everyone - how many instances have you actually seen someone deliberately made redundant with the intention of re-hiring as a contractor?

I've not witnessed a single one in 30 years across 6 industries (inc 2 years in the public sector) and only one instance of someone being reluctantly re-hired once the management team realised his skills were unique.

If you opt to to take early retirement at 55, you get no severance, and an actuarially reduced pension.

By being made ‘redundant’, you get a big fat wedge of cash - and you and leave your pension to mature to it’s full value, (then draw down 25%) while working on as a ‘contractor’, and now avoiding tax.

Suffice to cases at my County Council for some very pointed questions to be asked in the press and by local MPs.
 

Bravo_Bravo

On ROPS
On ROPs
Am I being dim here (probably) but I can't see any possible financial incentive for the council to do this?

Genuine open question to everyone - how many instances have you actually seen someone deliberately made redundant with the intention of re-hiring as a contractor?

I've not witnessed a single one in 30 years across 6 industries (inc 2 years in the public sector) and only one instance of someone being reluctantly re-hired once the management team realised his skills were unique.
Gets him off their books for (final salary) pension and other benefit purposes, and so actually saves them a packet.
 

Brexit_Pride

Old-Salt
I am skilled folk making a good whack.

last month my hobby netted me £1000. It's my fun money. I think this month my hobby is going to take in approx £2-2.5k.

If I read it right.

might sack off my highly skilled work at this rate.

ps less than 70 people in UK do what I do ;)
Does posting about immigrants 20 hours a day pay that well?

Stone me
 
Lobster is thrashing away at the buttons with gusto. Wot a funny little chap.
 
The 2019 Loan Charge is backdated to 1999, not 7 years.

As a result of this there have been 5 suicides to date, divorces, 40% of contractors surveyed have considered self harm/suicide and a number of people made bankrupt.

HMRC are sticking 2 fingers up to MPs from all parties who are calling on them to suspend activities.
Have you read the details of this; your pay went into an offshore account and you receveid an equivalent 'loan' taxed at 1-2%, which you were never going to repay. Just what bit of that doesn't scream 'dodgy tax scam'. What pisses me off aboout this is that it's taken HMRC so long to act that they can't go after the accountants/lawyers who set these things up.
 

Toppet

Clanker
Have you read the details of this; your pay went into an offshore account and you receveid an equivalent 'loan' taxed at 1-2%, which you were never going to repay. Just what bit of that doesn't scream 'dodgy tax scam'. What pisses me off aboout this is that it's taken HMRC so long to act that they can't go after the accountants/lawyers who set these things up.
If it were a company that had fone this to avoid so.e type of tax then people would be baying for blood. Agreed re your last sentence.
 
Absolute bollox.
I am a contractor because I am good enough to do my job and I get paid a lot of money to do it. Without having to 'care' about a company that does not give a toss about it's employees, without having to bother with useless performance reports and so called career progression.

For this, I go without all of the perks that a permie gets such as medical, pension, holiday pay and other benefits.
After I have made my VAT/Corporation Tax and Self Assesment tax payments, I end up paying a lot more tax per year than the permies around me that are supposed to be doing the same job.
I average about 18-24 months per contract and I expect to be paid a good amount to do so. There is no longer such thing as a permanent job in business. the government and HMRC are being completely inept in their management of the whole concept.
Well said that man.
 
Have you read the details of this; your pay went into an offshore account and you receveid an equivalent 'loan' taxed at 1-2%, which you were never going to repay. Just what bit of that doesn't scream 'dodgy tax scam'. What pisses me off aboout this is that it's taken HMRC so long to act that they can't go after the accountants/lawyers who set these things up.
I wouldn't have touched it with a barge pole, it was long the topic on contractor forums of being something that would be legislated against for a long time, the real issue is retrospectively applying legislation

One minute something is legal in tax law, then suddenly in the past it is declared illegal, it sets rather a dangerous precedent
 

Brexit_Pride

Old-Salt
I wouldn't have touched it with a barge pole, it was long the topic on contractor forums of being something that would be legislated against for a long time, the real issue is retrospectively applying legislation

One minute something is legal in tax law, then suddenly in the past it is declared illegal, it sets rather a dangerous precedent
HMRC are enemies of the people.
 

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