Discussion
Twinfan said:
Abdul Abulbul Amir said:
I think he was saying that HMRC challenging and losing helps create clarity of what is allowed.
BTW, multiple contracts isn't a defence against IR35.
They have lost quite a few cases and there's still not enough clarity, they can't even agree themselves what's right and what's wrong.BTW, multiple contracts isn't a defence against IR35.
Multiple contracts can form part of a defence, and as I said they're a good indicator that you're operating as a contractor and not an employee.
Abdul Abulbul Amir said:
Twinfan said:
paulrockliffe said:
I don't know anything about the details of this case
Then I suggest you read up on both it and IR35 before stating that it's OK for HMRC to do what they're currently doing.BTW, multiple contracts isn't a defence against IR35.
TX.
Abdul Abulbul Amir said:
Terminator X said:
It should be though as you clearly aren't an employee when working for two or more companies at the same time.
TX.
Why not? Lots of people have two jobs.TX.
TX.
Terminator X said:
Abdul Abulbul Amir said:
Terminator X said:
It should be though as you clearly aren't an employee when working for two or more companies at the same time.
TX.
Why not? Lots of people have two jobs.TX.
TX.
The substance of the relationship is assessed regardless of how many engagements a person has. Otherwise, we would all take a couple of part time jobs and bill through a ltd company to get the tax advantages.
Terminator X said:
Abdul Abulbul Amir said:
Terminator X said:
It should be though as you clearly aren't an employee when working for two or more companies at the same time.
TX.
Why not? Lots of people have two jobs.TX.
TX.
Having multiple engagements is not a clincher as to whether IR35 should apply to any or all of them. However, it CAN be a factor in deciding how the individual and his/her company (assuming they are operating through a limited company - other "intermediaries" are available).
Over the past couple of years, HMRC has tried to clobber a number of TV personalities/presenters etc by claiming that some - if not all - of their engagments are caught by IR35. They have won a few of these cases but they have also lost a few. How the case is decided is very much predicated on the specific terms of engagment between the intermediary and the hirer. Every case is different.
MrBogSmith said:
nickfrog said:
MrBogSmith said:
Always a pleasure watching HMRC lose.
You do realise that it also means that other tax payers have lost? It's important that HMRC lose if their case is not valid but conversely I want them to win as often as possible when it is.Abdul Abulbul Amir said:
Terminator X said:
Abdul Abulbul Amir said:
Terminator X said:
It should be though as you clearly aren't an employee when working for two or more companies at the same time.
TX.
Why not? Lots of people have two jobs.TX.
TX.
The substance of the relationship is assessed regardless of how many engagements a person has. Otherwise, we would all take a couple of part time jobs and bill through a ltd company to get the tax advantages.
TX.
nickfrog said:
You do realise that it also means that other tax payers have lost? It's important that HMRC lose if their case is not valid but conversely I want them to win as often as possible when it is.
I think the underlying point is that IR35 has been a poorly conceived and overly complex tax to impose, to the point where the cost to HMRC and burden on individuals and companies has outweighed any gain. There are far more deserving targets for avoidance but contractors were viewed as a soft bet, so they went after them with a very blunt sledgehammer! The main beneficiaries seem to be umbrella companies and accountants from what I can see.
Agreed.
IR35 in its various forms has been around for over 20 years and many aspects of it are still mired in uncertainty.
It hasn't at all been a boon to accountants. In fact, it's been a right pain in the neck as it makes what should be fairly straightforward working arrangements much more complicated and risky.
IR35 in its various forms has been around for over 20 years and many aspects of it are still mired in uncertainty.
It hasn't at all been a boon to accountants. In fact, it's been a right pain in the neck as it makes what should be fairly straightforward working arrangements much more complicated and risky.
Eric Mc said:
Agreed.
IR35 in its various forms has been around for over 20 years and many aspects of it are still mired in uncertainty.
It hasn't at all been a boon to accountants. In fact, it's been a right pain in the neck as it makes what should be fairly straightforward working arrangements much more complicated and risky.
Apologies Eric, as a lapsed lawyer I didn’t mean to insult the ‘oldest profession’. I believe the roots of this malevolent tax lie in the rail companies, post privatisation, who started to engage drivers on a contract basis. IR35 in its various forms has been around for over 20 years and many aspects of it are still mired in uncertainty.
It hasn't at all been a boon to accountants. In fact, it's been a right pain in the neck as it makes what should be fairly straightforward working arrangements much more complicated and risky.
HMRC decided to do something about it and assembled a team of incompetents, to draft an incomprehensible set of regulations that are so woolly that it’s resulted in more test cases than the quality control department at Samsonite.
Blue62 said:
Apologies Eric, as a lapsed lawyer I didn’t mean to insult the ‘oldest profession’. I believe the roots of this malevolent tax lie in the rail companies, post privatisation, who started to engage drivers on a contract basis.
HMRC decided to do something about it and assembled a team of incompetents, to draft an incomprehensible set of regulations that are so woolly that it’s resulted in more test cases than the quality control department at Samsonite.
Umm..accountants are the third oldest profession.HMRC decided to do something about it and assembled a team of incompetents, to draft an incomprehensible set of regulations that are so woolly that it’s resulted in more test cases than the quality control department at Samsonite.
ETA
..
Unless you know something about Eric we don't.
Blue62 said:
Apologies Eric, as a lapsed lawyer I didn’t mean to insult the ‘oldest profession’. I believe the roots of this malevolent tax lie in the rail companies, post privatisation, who started to engage drivers on a contract basis.
HMRC decided to do something about it and assembled a team of incompetents, to draft an incomprehensible set of regulations that are so woolly that it’s resulted in more test cases than the quality control department at Samsonite.
Part of the problem was the government themselves relaxing the set-up criteria for limited companies. As part of the Thatcherite "deregulation" criteria and to encourage entrepreneurship, the requirements for setting up limited companies and the reporting and disclosure requirements for small limited companies were massively relaxed in the early 1990s. Once upon a time you needed a minimum of three people to set up a company and each and every company in the land had to undergo a formal audit by a recognised professional auditor. HMRC decided to do something about it and assembled a team of incompetents, to draft an incomprehensible set of regulations that are so woolly that it’s resulted in more test cases than the quality control department at Samsonite.
These requirements were all abolished by the mid 1990s and since 2008 you can have a bona-fide single person company with only one director and one shareholder who can be one and the same person - a weird concept for a "company" when you think about it. After all, the dictionary definition of "company" is a "group of people".
It looks like some of the relaxations of rules we have seen over the past 30 plus years are set to be reversed. For instance, the government is currently looking into the ability of small limited companies to submist reduced disclosure "abridged" accounts to Companies House. It has stated that it wants small companies to file much more revealing accounts than they currently can.
Sheepshanks said:
Abdul Abulbul Amir said:
....Otherwise, we would all take a couple of part time jobs and bill through a ltd company to get the tax advantages.
For someone like Gary L - with his income - would it actually make much difference?His Ltd company has to pay corp tax, and then he pays tax on (presumably) his largly dividend income.
Lineker has also been involved with other avoidance schemes relating to film production...this has also gone through numerous court cases.
Abdul Abulbul Amir said:
Sheepshanks said:
Abdul Abulbul Amir said:
....Otherwise, we would all take a couple of part time jobs and bill through a ltd company to get the tax advantages.
For someone like Gary L - with his income - would it actually make much difference?His Ltd company has to pay corp tax, and then he pays tax on (presumably) his largly dividend income.
Lineker has also been involved with other avoidance schemes relating to film production...this has also gone through numerous court cases.
HMRC says he owed £3,621,735.90 in income tax and £1,313,755.38 in national insurance contributions over about a 5yr period.
His was in a partnership, not a Ltd.
Partners should pay tax an NI on profits shared from the partnership so where's the scope for tax and NI savings, unless they're suggesting dodgy accounting, which I don't see mentioned?
Even in a LTD, you're paying corp tax which is more than NI would be. Then tax on dividends rather than PAYE but it doesn't make much difference.
Sheepshanks said:
Abdul Abulbul Amir said:
Sheepshanks said:
Abdul Abulbul Amir said:
....Otherwise, we would all take a couple of part time jobs and bill through a ltd company to get the tax advantages.
For someone like Gary L - with his income - would it actually make much difference?His Ltd company has to pay corp tax, and then he pays tax on (presumably) his largly dividend income.
Lineker has also been involved with other avoidance schemes relating to film production...this has also gone through numerous court cases.
HMRC says he owed £3,621,735.90 in income tax and £1,313,755.38 in national insurance contributions over about a 5yr period.
His was in a partnership, not a Ltd.
Partners should pay tax an NI on profits shared from the partnership so where's the scope for tax and NI savings, unless they're suggesting dodgy accounting, which I don't see mentioned?
Even in a LTD, you're paying corp tax which is more than NI would be. Then tax on dividends rather than PAYE but it doesn't make much difference.
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