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?
a bit like saying a family is an imagined entity? Or a school or a pop group. Just because something is not singularly tangible doesn't mean it is 'imagined'.
A company is a business structure with quantifiable parts that have to comply with Companies House rules - some may be tangible, some may be intangible.
It is the share certificates, the annual accounts, the list of directors/share holders and the company registration number. etc.
Have mentioned on other posts but surely if found to be disguised 'employment' they can apply for backpaid holiday entitlement, SMP, SPP, SSP, backpaid pension contributions, etc etc as statutory employment law declares the 'employer' must treat all 'employees' with equal status.
and therein lies the problem. Because not so much that the test differs but that HMRC ignore the findings of one in order to focus on other elements to 'prove' that a contract was employment in disguise.
I think the word disguise says it all. IR35 was a solution to a problem that didn't exist. It was a whacky idea of HMRC dreamed up overnight with the suggestion that contractors were actually employees trying to avoid NIC etc simply because they were working for a client.
Seriously how many contractors do you know that ever got any benefit of sick pay or holiday pay. I know some that were genuinely part time employees and were treated with pro rata benefits as any normal employee would. But those are not the target under IR35.
A chicken may resemble a bantam but it doesn't mean they are the same.
Either you are an employee or you are a contractor.
HMRC implies you can be both at the same time.
If a contractor cannot apply statutory employment law to their terms of service, then very simply they are not employees (ie in relation to the client who contracts) because if the law doesn't recognise their employment status or rights under UK employment legislation, why would HMRC be able to win a legal case to state that they are disguised employees.