I have been contracting for 23 years and IR35 has been the bane of my life, and still is, although much has changed.
I no longer offer my company's services to public sector departments since the introduction of off-payroll rules.
HMRC have decided the contracting company should no longer make the decision, even in the private sector and it is now the responsibility of the hiring company (my clients) to decide. These people have no knowledge of the intricacies of IR35 and not surprisingly many companies, including the banks, have decided to not take any risk and avoid hiring contractors.
HMRC knew exactly what they were doing when they moved IR35 status responsibility to the organisations that do the hiring and the result has been as expected; a reduction in contracts and many contractors retiring, going permanent or moving abroad. Offshoring makes the situation worse and there are plenty of large consultancy firms to fill the gap with their extortionate rates.
I suspect this news about HMRC penalising other government departments is simply a warning shot to all private companies about what could happen if you engage contractors.
Why should HMRC be the slightest bit interested in going after a company that can pay for the best legal team to defend itself when they could simply tax small service companies out of existence via IR35?
My answers
Another example of HMRC getting it wrong while trying to fleece taxpayers. I despair!
How can this Government department ever be trusted?
The increase in NI is a good example of this governments lies.
https://www.conservatives.com/our-plan
No surprises here since Brexit! I'm sure the Leavers will argue this is all Covid and nothing to do with leaving the EU.
I have been contracting for 23 years and IR35 has been the bane of my life, and still is, although much has changed.
I no longer offer my company's services to public sector departments since the introduction of off-payroll rules.
HMRC have decided the contracting company should no longer make the decision, even in the private sector and it is now the responsibility of the hiring company (my clients) to decide. These people have no knowledge of the intricacies of IR35 and not surprisingly many companies, including the banks, have decided to not take any risk and avoid hiring contractors.
HMRC knew exactly what they were doing when they moved IR35 status responsibility to the organisations that do the hiring and the result has been as expected; a reduction in contracts and many contractors retiring, going permanent or moving abroad. Offshoring makes the situation worse and there are plenty of large consultancy firms to fill the gap with their extortionate rates.
I suspect this news about HMRC penalising other government departments is simply a warning shot to all private companies about what could happen if you engage contractors.
Why should HMRC be the slightest bit interested in going after a company that can pay for the best legal team to defend itself when they could simply tax small service companies out of existence via IR35?