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The All Things IR35 Related Thread

Discussion in 'Careers, Employment and Professional Development' started by NVP, Aug 23, 2019.

  1. Maundie

    Mobster

    Joined: Oct 20, 2010

    Posts: 2,628

    This is why they brought in IR35 isn't it?

    Because firms were hiding permanent jobs behind contract positions, as I understand if your job falls inside IR35 the only way to stay contracting is to use an umbrella company isn't it?
     
  2. mid_gen

    Sgarrista

    Joined: Dec 20, 2004

    Posts: 9,561

    Basically yes. People functioning as employees but using limited company arrangements to avoid tax, for both parties...helps with accounting for the employers/service customers (haha) too.

    Back when I was working in the City 90% of the workers were going through limited companies, and the vast majority of them were banking 5 figure sums every month.

    My opinion : if companies want the state to spend vast sums of money to provide a workforce, they need to not take the **** with their accounting.
     
  3. FishThrower

    Wise Guy

    Joined: Jul 15, 2005

    Posts: 1,156

    Surely if you were a "proper" contractor knowledge sharing would be part of the handover process to BAU?

    IR35 is there to help prevent contractors from doing BAU tasks, keeping knowledge to yourself suggests that you are working on BAU work which would put you inside IR35 in a heartbeat.

    Its not unusual for a contractor to be at a major bank for 5 years plus... but they are working on different projects during that time period and possibly reporting into different managers.

    Contracting for the same role for ten years doing server checks, resolving incident tickets is a big no no for the tax man as your working practices will fall inside IR35.

    If you are working 100% on projects, i suggest that you get your contract amended so it has deliverables in rather than a standard 9-5 contract.
     
  4. fezster

    Hitman

    Joined: Jan 7, 2007

    Posts: 506

    If you're a contractor and have not familiarised yourself with the off payroll rules coming in next year, you need to start doing some reading asap.

    The long and short of what is concerning many in the contractor community is that agencies need to make an IR35 determination some time in the next few months. If that determination is inside IR35, then hmrc can and will argue that your entire engagement must have been inside IR35. The legislation allows them to go back up to 6 years. If you think this is all scaremongering, have a look at what is happening to GSK contractors right now.

    https://www.contractoruk.com/ir35/n...they_say_and_how_contractors_can_respond.html

    https://www.ft.com/content/3dfeb794-c5c6-11e9-a8e9-296ca66511c9
     
  5. dowie

    Caporegime

    Joined: Jan 29, 2008

    Posts: 47,092

    I think that is a bit of an exaggeration, even if you're confining it to back office/IT roles, but it is certainly common within IT jobs in the city for people to be working as contractors and plenty of these roles aren't for specific projects but are just 6 months contracts that keep on getting rolled over for years. I know of a few cases where the offer of a contract was used for retention purposes i.e. someone leaving to go to a rival, instead offered a contractor role as an easy way to give a significant pay rise and keep them doing the same job they were doing as a permie.

    It is quite blatantly a complete **** take in those situations and they can't really complain too much if HMRC rumbles them, ought to have some cash put to one side for this as it isn't as though IR35 is anything particularly new, it is just something that was easier to try and dodge previously.
     
  6. NVP

    Soldato

    Joined: Sep 6, 2007

    Posts: 7,305

    Thank you
     
  7. FishThrower

    Wise Guy

    Joined: Jul 15, 2005

    Posts: 1,156

    No problem,

    If you are on a 3-6 month rolling contract.. get the agency to put down deliverables in the contract such as 1) complete application testing before end date of contract 2 ) determine application requirements before end date of contract etc. It will be really hard to get the end client to change the way they work so you will probably get resistance from them, but try your best.

    I would also recommend getting ir35 insurance from qdos for peace of mind, it only costs 100 quid a year when I last checked ( this was 5 years ago).
     
  8. NVP

    Soldato

    Joined: Sep 6, 2007

    Posts: 7,305

    They're 12 month contracts but I will see what my agency say too, even my big boss is a contractor so I think it's in everyone's interest. Thanks for the advice on insurance too, I will look at it today :) much appreciated.


    Rumour today is it'll be postponed a year.
     
  9. fezster

    Hitman

    Joined: Jan 7, 2007

    Posts: 506

    IR35 is a very poorly defined piece of legislation, proven by the fact that HMRC have lost pretty much every IR35 case that has been taken to court. To demonstrate the absurdity of the current off payroll rules - HMRC has a tool called CEST to determine IR35 status. It has argued in court that it's own tool cannot be relied upon to determine a contractor's IR35 status (!)
     
  10. Pudney

    Soldato

    Joined: Sep 6, 2005

    Posts: 5,545

    Location: Essex

    In 2019 in the FTT so far HMRC has:
    • Lost 3 cases (one of which depended on a casting vote by the judge),
    • Mixed result on 1 case (2 contracts, one was inside IR35, the other outside), and
    • Won 1 case.
    In 2018 in the FTT HMRC:
    • Lost 3 cases,
    • Won 1 case.
    Not amazing statistics by HMRC's standards, but not necessarily terrible either. The Christa Ackroyd case alone probably made HMRC significant cash benefits to justify all the above cases.
     
  11. fezster

    Hitman

    Joined: Jan 7, 2007

    Posts: 506

  12. Pudney

    Soldato

    Joined: Sep 6, 2005

    Posts: 5,545

    Location: Essex

    That list is incomplete. For example it doesn't include Big Bad Wolff Ltd, which although an NIC case was dependent on the IR35 status (and HMRC won, both at FTT and the UTT). I prefer to go to BAILII for tax decisions rather than rely on third party journalism.
     
  13. dowie

    Caporegime

    Joined: Jan 29, 2008

    Posts: 47,092

    It might well be poorly implemented but my point is more about how the general intent is pretty apparent and has been for a while - essentially they want to crack down on hidden employees. I know a fair few people who have taken the Mickey over the years and have been contracting in what are essentially regular employee roles. Most of them are probably switched on enough to get those roles redefined etc..
     
  14. ChrisD.

    Capodecina

    Joined: Sep 20, 2006

    Posts: 24,216

    Contractors really need to get a grip with IR35. Get pay a proper tax advisor to help you rather than speculation and internet forums.

    HMRC will look into old contracts so having it reworded now will make diddly squat difference. HMRC are on a war path and nothing is going to stop them. Get your affairs, legal covers and what not in order before it's too late.
     
  15. NVP

    Soldato

    Joined: Sep 6, 2007

    Posts: 7,305

    Will they look into old Ltd's?
     
  16. ChrisD.

    Capodecina

    Joined: Sep 20, 2006

    Posts: 24,216

    I wouldn't put it past them based on recent actions such as the loan charge news. Also look at how contractors at GSK are being heavily targeted.
     
  17. NVP

    Soldato

    Joined: Sep 6, 2007

    Posts: 7,305

    [​IMG]
     
  18. dowie

    Caporegime

    Joined: Jan 29, 2008

    Posts: 47,092

    Which is why you should put some money to one side. I suspect that they're not going to go too far back with everyone as I doubt they have the resources to do so given the number of IT contractors out there in general (also I'm not sure they're as unrestricted in terms of time as they might be with the loan tax dodge, but people will certainly need to be careful going forwards).
     
  19. ChrisD.

    Capodecina

    Joined: Sep 20, 2006

    Posts: 24,216

    It's also worth noting that any IR35 insurance is based on the fact that the contract it was insured for (or you were doing at the time) is actually according to the law, outside of IR35. If you were working inside of IR35 then the insurance isn't valid.
     
  20. NVP

    Soldato

    Joined: Sep 6, 2007

    Posts: 7,305

    x 2