Contractors: IR35 & general discussion
Discussion
98elise said:
Any sensible contractor should have enough of a cash buffer in the business to continue paying themselves for at least 3 months.
Yes, or 6/12 months depending on your definition of sensible!However there are plenty who don’t, for a multitude of reasons, including myself.
I was just getting back on my feet after a disastrous chapter in my life in family, health and financial terms and my relatively good fortune by way of continued contract engagement was enabling this. Now yet another rug is set to be pulled from beneath my feet.
Next year is going to be interesting. I’ll weather the storm one way or another.
98elise said:
catweasle said:
HMRC have lost plenty of IR35 cases, it still hasn't stopped them persisting with it. It's only taxpayers money they are wasting by fighting these cases after all. If they keep going they'll get the result they want eventually, they are playing the long game.
In fact they've more than likely won already by putting the onus for IR35 status on the client. As has been amply shown, most big companies will simply role over and play ball, after all who really wants to p
s off the taxman, especially if there is no financial benefit for the companies concerned.
What made me laugh was the news that HMRC are going after the NHS to the tune of £4m for what they deem to be incorrectly categorised contractors so one government department spending money to go after another government department, surely it's all the same pot of taxpayers money at the end of the day!
Only 2 things certain in this world, death and taxes.
In fact they've more than likely won already by putting the onus for IR35 status on the client. As has been amply shown, most big companies will simply role over and play ball, after all who really wants to p
s off the taxman, especially if there is no financial benefit for the companies concerned.What made me laugh was the news that HMRC are going after the NHS to the tune of £4m for what they deem to be incorrectly categorised contractors so one government department spending money to go after another government department, surely it's all the same pot of taxpayers money at the end of the day!
Only 2 things certain in this world, death and taxes.
Guvernator said:
In fact they've more than likely won already by putting the onus for IR35 status on the client. As has been amply shown, most big companies will simply role over and play ball, after all who really wants to ps off the taxman, especially if there is no financial benefit for the companies concerned.
Agreed but this case was regarding ‘unpaid’ tax rather than future tax liabilities. s off the taxman, especially if there is no financial benefit for the companies concerned.Guvernator said:
Companies including HSBC are obviously not understanding the rules and the vindictiveness of HMRC against contractors. Asking your contractors to go blanket inside when you were previously declared outside is just asking for trouble. Are they really expecting hundreds of contractors to do that or do they just want them to leave?
If they are smart, hundreds of contractors will be out of there on Jan 2020 leaving HSBC and any other company who goes this route with a big resourcing hole because any who stay on will be painting a big target on their backs.
I think actually there is a tiny glimmer of hope here. I don't think banks are actually saying Inside or Outside, they are merely saying no more PSC's, just PAYE or go perm (incidentally where the fook do they actually get the money to offer all these perm packages anyway? permies don't disappear after a few months..!), anyway...by just blanketing everyone then it's clear individual assessment tests have not been carried out meaning anyone that was happy with their working practice being Outside prior to April 20 can then claim they are still Outside as no assessment was made and nothing has changed should HMRC come knocking.If they are smart, hundreds of contractors will be out of there on Jan 2020 leaving HSBC and any other company who goes this route with a big resourcing hole because any who stay on will be painting a big target on their backs.
I imagine a few court cases will put that theory into practice.
Slightly worrying times ahead. I've only been contracting for a little over a year. I work for three separate clients at present, all SME's and not one of them seems to know a thing about this. The one that I would say is closest to inside IR35 do treat contractors like staff, or at least try to. I have had to take a very firm line with certain aspects, like substitutions, working location, working times , invoicing, equipment I use etc. I've tried to make it very clear that I'm there to carry out a specific objective in the best manner that I know how. But they need constant reminding and I really don't think as a company they draw much of a line between staff and contractors. My written agreements are all in place and my audit trail probably looks sound but it's a worry and it should certainly be a worry for some other contractors there who also seem utterly oblivious to all this. I think when companies like that suddenly smell the roses, there will simply be a panic reaction and everything will go 'inside' and as others have pointed out, that won't look very good if you stick around for that journey!
So I'm already looking at where I go with all of this. I'm trying to get much more into multiple short term projects but the effort required in marketing myself to find these tasks is tough going I must admit. Interesting times ahead indeed.
So I'm already looking at where I go with all of this. I'm trying to get much more into multiple short term projects but the effort required in marketing myself to find these tasks is tough going I must admit. Interesting times ahead indeed.
Gad-Westy said:
Slightly worrying times ahead. I've only been contracting for a little over a year. I work for three separate clients at present, all SME's and not one of them seems to know a thing about this. The one that I would say is closest to inside IR35 do treat contractors like staff, or at least try to. I have had to take a very firm line with certain aspects, like substitutions, working location, working times , invoicing, equipment I use etc. I've tried to make it very clear that I'm there to carry out a specific objective in the best manner that I know how. But they need constant reminding and I really don't think as a company they draw much of a line between staff and contractors. My written agreements are all in place and my audit trail probably looks sound but it's a worry and it should certainly be a worry for some other contractors there who also seem utterly oblivious to all this. I think when companies like that suddenly smell the roses, there will simply be a panic reaction and everything will go 'inside' and as others have pointed out, that won't look very good if you stick around for that journey!
So I'm already looking at where I go with all of this. I'm trying to get much more into multiple short term projects but the effort required in marketing myself to find these tasks is tough going I must admit. Interesting times ahead indeed.
If your SME clients are defined as small businesses by the following criteria (of which at least 2 must be met in a 12 month period) then they are except from the reforms and you continue to be responsible for IR35 status determination:So I'm already looking at where I go with all of this. I'm trying to get much more into multiple short term projects but the effort required in marketing myself to find these tasks is tough going I must admit. Interesting times ahead indeed.
Turnover – not more than £10.2 million
Balance sheet total – not more than 5.1 million
Number of employees – no more than 5
Sounds to me as though you have your head screwed on for a relative newcomer to the contracting scene. know plenty of veterans who are largely oblivious to all this stuff!
theboss said:
If your SME clients are defined as small businesses by the following criteria (of which at least 2 must be met in a 12 month period) then they are except from the reforms and you continue to be responsible for IR35 status determination:
Turnover – not more than £10.2 million
Balance sheet total – not more than 5.1 million
Number of employees – no more than 5
Sounds to me as though you have your head screwed on for a relative newcomer to the contracting scene. know plenty of veterans who are largely oblivious to all this stuff!
Thank you very much. I suspect my biggest client fails on 2 out of 3 of those....Turnover – not more than £10.2 million
Balance sheet total – not more than 5.1 million
Number of employees – no more than 5
Sounds to me as though you have your head screwed on for a relative newcomer to the contracting scene. know plenty of veterans who are largely oblivious to all this stuff!
So HMRC have said :
-> ‘The reform is not retrospective – as it has in the public sector HMRC will focus its efforts on ensuring businesses comply with the reform rather than focusing on historic cases.’
-> ‘HMRC will not carry out targeted campaigns into previous years when individuals start paying employment taxes under IR35 for the first time following the reform and businesses’ decisions about whether their workers are within the rules will not automatically trigger an enquiry into earlier years.’
Am I the only one that reads this as leaving the door open to retrospective reviews? Maybe encouraging people to remain with the same client, doing the same ‘job’ and just moving either inside IR35 or into an umbrella, then they will wait a few months and hunt them all down.
-> ‘The reform is not retrospective – as it has in the public sector HMRC will focus its efforts on ensuring businesses comply with the reform rather than focusing on historic cases.’
-> ‘HMRC will not carry out targeted campaigns into previous years when individuals start paying employment taxes under IR35 for the first time following the reform and businesses’ decisions about whether their workers are within the rules will not automatically trigger an enquiry into earlier years.’
Am I the only one that reads this as leaving the door open to retrospective reviews? Maybe encouraging people to remain with the same client, doing the same ‘job’ and just moving either inside IR35 or into an umbrella, then they will wait a few months and hunt them all down.
Gazzab said:
So HMRC have said :
-> ‘The reform is not retrospective – as it has in the public sector HMRC will focus its efforts on ensuring businesses comply with the reform rather than focusing on historic cases.’
-> ‘HMRC will not carry out targeted campaigns into previous years when individuals start paying employment taxes under IR35 for the first time following the reform and businesses’ decisions about whether their workers are within the rules will not automatically trigger an enquiry into earlier years.’
Am I the only one that reads this as leaving the door open to retrospective reviews? Maybe encouraging people to remain with the same client, doing the same ‘job’ and just moving either inside IR35 or into an umbrella, then they will wait a few months and hunt them all down.
It is cagey isn’t it. Saying we’ll not automatically do this and it won’t be targeted that...-> ‘The reform is not retrospective – as it has in the public sector HMRC will focus its efforts on ensuring businesses comply with the reform rather than focusing on historic cases.’
-> ‘HMRC will not carry out targeted campaigns into previous years when individuals start paying employment taxes under IR35 for the first time following the reform and businesses’ decisions about whether their workers are within the rules will not automatically trigger an enquiry into earlier years.’
Am I the only one that reads this as leaving the door open to retrospective reviews? Maybe encouraging people to remain with the same client, doing the same ‘job’ and just moving either inside IR35 or into an umbrella, then they will wait a few months and hunt them all down.
HMRC have also said they’d stand by their CEST tool verdicts, but have themselves dismissed it in court several times when it gives the “wrong” answer, and have ignored complaints that its biased since it doesn’t ask about Mutuality of Obligation which has been the lynchpin of several cases in the judge’s eyes.
Gazzab said:
So HMRC have said :
-> ‘The reform is not retrospective – as it has in the public sector HMRC will focus its efforts on ensuring businesses comply with the reform rather than focusing on historic cases.’
-> ‘HMRC will not carry out targeted campaigns into previous years when individuals start paying employment taxes under IR35 for the first time following the reform and businesses’ decisions about whether their workers are within the rules will not automatically trigger an enquiry into earlier years.’
Am I the only one that reads this as leaving the door open to retrospective reviews? Maybe encouraging people to remain with the same client, doing the same ‘job’ and just moving either inside IR35 or into an umbrella, then they will wait a few months and hunt them all down.
They seem to be going after TV presenters for previous years.-> ‘The reform is not retrospective – as it has in the public sector HMRC will focus its efforts on ensuring businesses comply with the reform rather than focusing on historic cases.’
-> ‘HMRC will not carry out targeted campaigns into previous years when individuals start paying employment taxes under IR35 for the first time following the reform and businesses’ decisions about whether their workers are within the rules will not automatically trigger an enquiry into earlier years.’
Am I the only one that reads this as leaving the door open to retrospective reviews? Maybe encouraging people to remain with the same client, doing the same ‘job’ and just moving either inside IR35 or into an umbrella, then they will wait a few months and hunt them all down.
Countdown said:
Is MOO a key factor in the "Employed vs. Self Employed" question (as opposed to being "one of the factors"?
There's no MOO for somebody on a zero-hours contract, they can also have multiple clients/employers. Should they be treated as self-employed?
Reading some of the case notes from some of HMRC's lost cases, HMRC seem to define MOO as any arrangement that exchanges money for labour. A bit broad to say the least. That would presumably include your window cleaner, the dentist, that guy who photographed your wedding and presumably HMRC's own legal representation in court. Even the judges seem to deride it. The whole thing seems a shambles and truly stinks but as someone pointed out earlier, HMRC will get their way one way or another because for all the plucky individuals fighting them, there'll be thousands bending over and taking it. There's no MOO for somebody on a zero-hours contract, they can also have multiple clients/employers. Should they be treated as self-employed?
98elise said:
anonymous said:
[redacted]
Any sensible contractor should have enough of a cash buffer in the business to continue paying themselves for at least 3 months. And crucially, this is in addition to the money ring-fenced for corporation and other taxes.
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