New Contract, IR35 Compliance & Risks
Discussion
I've been offered a new role which will be office based & could either be worked as ltd co, paye umbrella, or agency paye. With the new agency workers directive coming into effect in October I'm keen to hear other contractors views on this if inside/outside ir35. (current role is ltd co)
Does anyone have the numbers for the no. of investigation HMRC carries out & their success rate on ir35?
Does anyone have the numbers for the no. of investigation HMRC carries out & their success rate on ir35?
S3K04 said:
The "husband-wife" case is the infamous Arctic Systems Ltd case which HMRC eventually lost. However, it should not be in a listing of IR35 cases as it had precvious little to do with IR35 matters at all.An alternative to Ltd Co that has been suggested to me is to use
http://www.ppcontracts.co.uk/
who operate an interest free offshore loan type arrangement. This sounds a bit dodgy. I think I may settle with a paye ubmrella as the new job offered a better rate so I won't be any worse off & won't have to worry about a potential tax investigation for 7 years.
http://www.ppcontracts.co.uk/
who operate an interest free offshore loan type arrangement. This sounds a bit dodgy. I think I may settle with a paye ubmrella as the new job offered a better rate so I won't be any worse off & won't have to worry about a potential tax investigation for 7 years.
I did think what would happen if asked to repay the loan. The guide explains the loan money is held in a trust that is ring fenced & can't be claimed by the company or its creditors. But you do owe the money for the rest of your days.
Eric, are there any other "safe" tax efficient ways to operate as a one man contractor?
Eric, are there any other "safe" tax efficient ways to operate as a one man contractor?
Tim330 said:
I did think what would happen if asked to repay the loan. The guide explains the loan money is held in a trust that is ring fenced & can't be claimed by the company or its creditors. But you do owe the money for the rest of your days.
Eric, are there any other "safe" tax efficient ways to operate as a one man contractor?
If you go about it the right way, a normal limited company can and does still work - you just have to make sure that you take on board ALL the aspects of the relationship with those you work for that could render you vulnerable to IR35.Eric, are there any other "safe" tax efficient ways to operate as a one man contractor?
Well although the contract can be written to be ir35 compliant I don't think it would stand up to scrutiny. The role is mon-fri flexible start/finish time.
It will contain a right of substitution & no mutuality of obligation. But this will be the only client/income stream for the next year or so it could be viewed as disguised employment.
I've read websites with various ir35 tests & in most categories if answering honestly would fall inside.
It will contain a right of substitution & no mutuality of obligation. But this will be the only client/income stream for the next year or so it could be viewed as disguised employment.
I've read websites with various ir35 tests & in most categories if answering honestly would fall inside.
Are you saying you get paid holidays, get paid when sick or absent, use the "employer" facilities such as canteens, gyms etc, are invited on staff outings and are looked on as one of the "staff"?.
If so, well, maybe you might have to bite the bullet and pay the correct tax and NI.
If it looks like an employee, acts like an employee and is treated like an employee - it is an employee.
On the other hand, if you ensure you keep yourself away from all those things that might mark you out as employee and go out of your way to highlight those factors that show you to be trading in your own right - then the dangers of IR35 should diminish.
Who is responsible for the work you do?
Who pays for the rectification of work you did if that work was done badly?
Can the "employer" seek recompense from you for bad work?
Have you taken out your own professional indemnity insurance (or any other business type insurances for that matter)?
If so, well, maybe you might have to bite the bullet and pay the correct tax and NI.
If it looks like an employee, acts like an employee and is treated like an employee - it is an employee.
On the other hand, if you ensure you keep yourself away from all those things that might mark you out as employee and go out of your way to highlight those factors that show you to be trading in your own right - then the dangers of IR35 should diminish.
Who is responsible for the work you do?
Who pays for the rectification of work you did if that work was done badly?
Can the "employer" seek recompense from you for bad work?
Have you taken out your own professional indemnity insurance (or any other business type insurances for that matter)?
Are you saying you get paid holidays, get paid when sick or absent, use the "employer" facilities such as canteens, gyms etc, are invited on staff outings and are looked on as one of the "staff"?.--No paid holidays/sick pay, just an hourly rate. Would get use of canteen
Who is responsible for the work you do?--Me
Who pays for the rectification of work you did if that work was done badly?--Me
Can the "employer" seek recompense from you for bad work?--Yes
Have you taken out your own professional indemnity insurance (or any other business type insurances for that matter)?--This is required
I have decided from reading more on where HMRC have been sucessful eg Dragonfly case to just use a paye ubmrella for this contract.
Who is responsible for the work you do?--Me
Who pays for the rectification of work you did if that work was done badly?--Me
Can the "employer" seek recompense from you for bad work?--Yes
Have you taken out your own professional indemnity insurance (or any other business type insurances for that matter)?--This is required
I have decided from reading more on where HMRC have been sucessful eg Dragonfly case to just use a paye ubmrella for this contract.
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