totally agree. and the irony of an organisation that invented the IR35 rules then finds they cannot even win cases trying to prove that an entity fell under 'disguised employment'. How much tax has been lost in fighting cases and being unsuccessful - would be a good FOI request.
What will happen to companies like Accenture and Capita I wonder. will their employees become employees of their contractors companies. Why go for PSC and yet the huge outsourcing companies are not under question!
agree Johnjenkins - and the question arising regarding mutuality of obligation which exists in almost all contracts should simply ask if the contractor still works in his own interest, for his own gain and not solely for the benefit of the 'employer'.
And if the contractor cannot apply employment law to the terms of service then quite simply there is no employment because if it is not recognised in law as being employment, it is not employment.
totally agree @johnjenkins.
Ok so in order to watch BBC tv, I have to pay for a licence. That in effect is a contract between me, the viewer and BBC, the provider of those services. I cannot copy or broadcast that material to other viewers therefore a degree of control exists.
There is a mutual obligation that by purchasing a licence, the BBC has to let me watch BBC tv as a viewer. Therefore a contract exists through that licence so I must be a BBC employee and I would like paid holiday, pension please etc.
Mutual obligation is the whole point of drawing up a contract. Defining what you will give in return for a fee.
And parameters have to exist in context of the services delivered.
The employee is not a separate entity to the employer since an employment contract means the employee agrees to perform a role on behalf of and to the benefit of the employer and control is therefore assumed. Unlike in a contract situation where control is mutual and so two entities need to agree terms - ie what will be offered in return for what will be paid.
If HMRC had won this case, wouldn't every goods or service supplier to eg, M+S, sainsburys etc be treated as employment since there is mutual obligation in most contracts and control. There will be agreed elements (clauses) to determine the delivery (ie control of the product or service being produced).
In their continued desperation to twist IR35 into every contract situation, HMRC have again cost the taxpayer money in fighting an unsuccessful case. When will they abolish IR35 and accept that most situations operate legitimately under contracts and are not disguised employment. Yet again in trying to un-disguise a contract as employment they simply demonstrate that it was not disguised at all.
Good that the tax payer won the round regardless of the debate about the quality of broadcast/programme.
Imagine she does not do a self-assessment.
Looks like we paid more council tax last year than she did for BP in 2017!
I guess something paid from HM to HMRC could be regarded as offset?
Actually she might fall inside IR35 as unlikely to have a substitution clause. And def gets paid holiday.
i think you are referring to freelancing (sole trader) which is a bit diff. Imagine you might work as eg, a stylist on a production, then you would probably be required to show your UTR and confirm you are responsible for your own tax NI etc.
Diff here is where a Ltd Company is the service provider (intermediary) and yet HMRC are trying to show that the situation of the contracted company/contracting party is actually one of employee/employer and that the contract is hypothetically a contract of employment - not services thus insist that payroll costs/NI must apply.
In most cases, the relationship of the contract provider is clearly not employment in 'disguise' because of the way each party treats the situation. However it is HMRC's intention to ignore the red flags (ie no employee benefits/rights under employment law) and pursue the case on minor detail which the appellant then has to prove is not evidence of actual employment.
The cost of that is time and again proven to be a waste of taxpayers money yet HMRC does not seem to learn from the number of cases it has lost that they are treading on thin ice each time they attempt to challenge under IR35
Presumably also where the 3 month time limit applied, a contractor's so called 'employment' could be deemed to cease when notice is given (ie contract ends) because contractors do not have the same notice period rights as normal employees - (again indication that they are not actually employees).
So therefore, if a contractor had not been given the same notice as other employees of that company, they could take it to an ET to claim unfair dismissal.
If HMRC had later won a case proving they were 'employed', then they could potentially (as above post states) have a valid reason for applying to an ET later than the norm.
ie If they were only determined to be in employment following the conclusion of any successful HMRC legal action, then they would not have been aware of their rights as 'employees'. Simply because they deemed by mutual agreement and their treatment from the contracting party that they were not in fact employees they therefore would not have sought to protect their rights under Employment Law.
Where HMRC had successfully shown there was 'genuine' employment, the said 'employee' should have the automatic legal right to then pursue the contracting party ('employer') for all unpaid benefits backdated to the commencement of the contract.
Fact is companies use contractors precisely because they do not have to pay benefits, holiday, NI etc and can be terminated without risk of ET. Easy come easy go. Serve a defined purpose or specialist need.
The contractor wants the freedom to function autonomously and manage their own services without being under the rules and obligations of an employer.
It all functioned perfectly well before IR35.
IR35 should never apply where there is a specific contract unless that contractor enjoys the same benefits that an employee is legally entitled to.
It should not be fought on 'disguised' employment but 'indistinguishable ' from employment in all areas!
I thought HM had opted to pay tax?
A concept is an idea. Therefore yes a concept is 'imagined'. But once that idea is put into a format that can be recognised, it is no longer 'imagined' and it is no longer a concept.
Important to separate out that for something to exist, it merely requires to be humanly recognisable or identifiable by some accepted characteristic (eg school, pop group) - also can be a mental state like a phobia, or physical state, like cold or tired.
Many things exist without being tangible - they exist in processes, exist in laws, exist in a recognisable structure of operation.
The question with IR35 is whether an employment contract exists - that is the question. And there is some irony in your posts about real v imagined because IR35 appears to imagine there is an employee when reality says that if you look at the process, the structure and what factors would normally identify 'employment', there often is a genuine contractor.
The fact HMRC refer to 'disguised' employment really means 'imagined' employment in many cases. The question of whether there is a 'hypothetical' employment contract disregards the key elements of a standard employee (pension, benefits etc) in favour of those that might in any case be incidental to any provision of service and/OR employment which is therefore biased evidence.
I'm off to the concept of a gym now for an imagined 10 mile run.
Cogito, ergo sum
absolutely - totally unfair and shows that IR35 was always just about HMRC trying to twist the situation and make the little guy trip up and pay - instead of focussing on the mega tax avoiders.
Plus surely all the 'proven' cases must have to then put in an adjusted Corp tax return to reflect a drop in profit plus recover the interest incurred for overpayment held on account? Anyone know if this is the case?