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A very correct looking decision with an interesting discussion of the topical subject of quasi sham/mislabelling - which is not confined to employment/self-employment disputes per the recent case in the link below:
https://www.accountingweb.co.uk/any-answers/interesting-case-on-quasi-sh...
Ah well it's probably easier than making firms like Google, Amazon etc pay what they should do in UK tax, if all their dodges were unscrambled correctly. But then that would involve a lot of work...
I'm beginning to think that some people within HMRC are actually on our side on this and are trying to show how untenable and frankly stupid is the official line.
It's fail after fail after fail.
More, I think, That HMRC are just not very good at their jobs.
I have to agree that the big tech firms would be a better target but I think the HMRC team need a bit more practice in getting their act together.
No, because the decision is based on work not entity. HMRC are trying to focus on each individual contract of work rather than a generalisation of work. So it doesn't matter how many people you do work for if HMRC believe any of those pieces of work fall under IR35 they will challenge, although the judge did comment on the fact that there were other contracts amounting to 50% of her business. This should restrict HMRC just going for those that have one client.
Yes. Whilst I accept if I worked for one entity Monday to Friday and another on Saturday and Sunday that could mean I had 2 employments HMRC should not stop there. They need to look at the overall sole trader or limited company business and the control the person has etc etc as we all know which is why their on line tool does not always work to give the correct answer. I know these TV presenters cannot be substituted just as usually if I am paid to give a talk even a 3 day one they want me not my cousin or neighbour and no substitution allowed but that is not the end of the test and does not on its own make me or this lady employed.
For many, many years the BBC engaged a substantial number of "freelancers" on self-employed terms.
This arrangement was only brought to a complete close, in 2017/18.
If ever HMRC chose to investigate the BBC's engagement arrangements, it would open an extremely large can of worms.
Christa Ackroyd was merely the tip of the iceberg. In other words low hanging fruit.
the basis for proving a service provider is not an employee is pretty easy. Do you get any benefits, holiday pay, sick pay - that alone should be enough to indicate that there's no employment contract.
HMRC must look for those fundamental details first so if that doesn't exist why do they then go on to try and prove employment exists? Seems like they ignore the warning signs that they are unlikely to win a case and go on to scour and conjure up other elements that might possibly suggest 'employment'.
Do they really think contractors would put themselves in a position whereby they get none of the benefits of employment and yet risk paying the added costs of being an employee !
In any case there are statutory conditions as to eg the minimum amount of paid holiday employees are entitled to - so where HMRC is trying to show there is employment, why is it not chasing the employer first for breaching its obligations to the employee. If that was the first part of any IR35 investigation, it would put the onus on the employer to show WHY they did not provide the statutory holiday etc to the 'alleged employee' - ie that there was no recognised employment between the two parties.
HMRC is turning into the financial equivalent of a cowboy clamper.
Because the test is different for tax and for employment rights, which means it is very possible to be employed for tax purposes but not for employment rights purposes.
The solution is, of course, to align the tests.
No, the solution is for HMRC to keep their noses out of employment status. Mind you it didn't help matters when the EU decided there was a worker status so the self-employed could claim holiday pay etc.
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.
Gordon Brown decided the treasury was short of money so he started to hit CIS subbies, IT contractors and any other subcontractors. So many formed their own Limited Company. Hence IR35.
Unfortunately according to EU rules there is such a thing called a worker which comes with benefits. Workers can be self-employed. HMRC look at every contract of work to see if there is a difference between the "contract for services" and what happens in practice.
The time and cost HMRC have spent on losing cases is beyond belief. Just think MTD could've been up and running properly by now. No HMRC, you keep spending time and money on lost causes.
It is a good decision. HMRC have been pushing the boundaries for too long. I have been a sole trader for 20 years and indeed have on occasion been paid by the BBC but no way am I anyone's employee.