Member Since: 15th Apr 2016
9th Dec 2019
So the cold pizza I put in the fridge and saved for breakfast (leftovers) should be zero rated and shall I call the pizza company to get a vat refund?
4th Dec 2019
interesting - the judge talks about 'witness of fact' - ie that fact is relevant in case where they base everything else on 'hypothetical' employment.
Statutory employment benefits are fact. Hypothetical employment is, by definition that it is described as hypothetical, not fact.
4th Dec 2019
'IT contractors - usually disguised employees' - absolute nonsense!
In fact IT is an area often outsourced because certain niche skills are often temporarily required for projects. IT support is outsourced just as accountants and HR professionals are because companies get access to expertise that they do not need continually.
So where's the difference?
And trying to 'escape' what exactly?
Just as the days of commercial office leases are disappearing so is longterm payroll. Companies need flexibility of skills and want to be able to contract in as and what they need and when they need it.
Contractors provide agreed services according to their own terms and want flexibility to be self-employed - with that they do not get benefits of pension contributions, sickness or paid holiday and have to factor in gaps between contracts.
It is not a 'game' it is a professional working relationship and it works for both sides.
but agree the rules should be changed - get rid of IR35 and recognise the status of what a contractor is.
4th Dec 2019
Contractors need to be recognised and defined in their own right rather than have to prove they are not 'disguised employees'.
Total regard should be to change the regulations and to recognise there IS a difference between contractors and employees - not that contractors might really be employees.
at present these cases are based on a hypothetical employment contract. Ie, an imagined or suggested contract.
You cannot be an employee without being entitled to the statutory benefits. They are statutory - not hypothetical! So how can there ever be cases where no benefits are paid but an employee/er situation is suggested. And contractors get no protection under employment law.
A contractor is not an employee because he/she retains full control of the working situation (without detriment to the services being provided) and all contracts have some form of obligation - ie deliver something in return for payment. But no statutory obligations unlike under normal employment.
IR35 attacks small businesses and entrepreneurs, goes against employers (who do not necessary want the added liabilities of employing for specific or niche services/knowledge) and continues to cost the taxpayer in failed legal cases.
IR35 = IS RUBBISH
18th Nov 2019
are there others?
18th Nov 2019
yep and where they are recovering retrospective NI, PAYE based on grounds that the contractor was actually an employee, the employee should be able to retrospectively reclaim unpaid holiday, notice, SMP etc. And possible unfair dismissal if the employer had not followed statutory procedure for ending the employment.
The criteria applied is the problem, it is too vague.
Just scrap IR35 and accept this is how many companies 'employ' talent - niche skills as and when they need them - no 'employer' responsibility required. Suits everyone.
And more profit (dividend drawing) means more corp tax gets paid.
18th Nov 2019
In theory it should be simple.
Does the person under question receive any statutory benefits of employment, is he/she covered under employment law and is he/she legally and individually accountable for any errors. And are any restrictions placed on the person as to where they can work.
I think that's all that should count. Because if the person is treated as any other employee can expect to be treated, he/she is an employee. But if there are no statutory benefits and a specific contract exists, then the relationship is company and service provider.
The MOO exists in all contracts because a contract has two (or more) consenting parties. That does not mean they must be employer and employee!
Simply there is obligation to provide service/s in return for an agreed value on agreed terms which by the fact that the party making that delivery cannot apply statutory employment conditions (holiday pay, pension contributions etc) means it should not be confused with an employment contract.
All the talk about hypothetical employment is well, hypothetical (or imagined). How can it be used as factual. Either it exists or it doesn't. It should not be possible to say it is hypothetical and base a case on that! Simply that HMRC have had to twist the case to prove IR35 that they use imagined situations!
It is only when the statutory obligations of an employer are put to the test is it possible to see that an employment situation exists.
those who lost their case against the BBC should apply for unpaid holiday, etc
18th Nov 2019
agree Redfive and loss of income through the PSC means a reduction in corp tax paid - it doesn't generate any more tax and in fact takes more out of the NI pot because the employer has to give statutory benefits and sick pay to contractors. It robs Peter to pay Paul.
My solution would be to scrap IR35 but put all operating PSC into a flat rate vat scheme - generating more for the treasury but without directly hitting the small PSC. As a progressive tax the hit will be further up the food chain but generate more revenue. And would be a reasonable obligation for those operating through a Ltd company.
18th Nov 2019
Wrong - they are not there to reduce tax liabilities and your reference to the NHS is bizarre? So if someone has no kids and gets no SMP they should presumably be refunded a proportion of the NI they paid because much of NI coves benefits like that. Plus the majority of NI goes to fund state pensions - not the NHS!
The reason PSCs exist is mostly for two reasons.
1/The service provider wants the freedom of being self-employed. Does not want to be tied into employment contracts, controlled by the employer and wants to be able to work as and when and wherever.
There are associated costs - filing accounts, self insuring, and the need to cover illness, gaps in contracts and time off for children, holidays, pension etc.
and there are benefits, the ability to pay dividends, reclaim expenses etc.
A PSC will have to cover themselves for many of the costs which NI pays for in normal employment. The loss of employee benefits that employers are lawfully obliged to pay, pension, sickness, holiday, redundancy, are not available to the self-employed and form a big part of the NI pot.
The self-employed have no protection under employment law.
2/Employers do not always want to increase their workforce obligations - they can resource and outsource as their business requires without having to make pension contributions, holiday pay etc - in fact pretty much for the reasons above.
IR35 is a rubbish idea which was founded on exactly your suggestions but it is just not true and it penalises many small businesses unfairly. It is out of date with contemporary work patterns. Just as co-working spaces are now the norm, so is a flexible workforce.
That should be encouraged, not discouraged.
Scrap IR35 - it has probably cost HMRC more money in fighting failed cases than it ever generated for the public purse.
30th Oct 2019
Agree Kevin69 because contractors have no job security, get no employee benefits and have to factor in times when they are between contracts - plus many will have to appoint accountants and take out PI to cover themselves.
They get no sick pay or maternity or spp.
There are a lot of overheads and when they have to take responsibility for their own businesses, filing accounts, complying with Comapanies House rules - why shouldn't they take back some of the benefits of that too.
The key word in the legal case is 'hypothetical' which in dictionary terms means fictional, supposed, imagined but not necessarily real or true. Therefore it is astonishing that something described as a hypothetical situation is then treated as a real one yet fails to pass the normal tests of employment which is where employment law can be applied (ie in terms of employee rights)
I wonder how Capita, Accenture et al will work if their contractors all have to pass the test of 'control' etc.