Save content
Have you found this content useful? Use the button above to save it to your profile.
Lowdown
Lowdown

9am Lowdown: IT contractors walk out over IR35 dispute

by
13th Oct 2016
Save content
Have you found this content useful? Use the button above to save it to your profile.

Good morning and welcome to this morning's 9am Lowdown. Today's headlines see IT contractors abandon a MoD project over an IR35 dispute, an accountant jailed over a ten-year fraud, and the profession's moment on the silver screen receive an underwhelming reaction from reviewers.

* * *

IT contractors walk out over IR35 dispute

IT contractors have walked out of the UK Hydrographic Office (UKHO) causing major IT projects to be put on hold over an HMRC IR35 clampdown.

According to Computer Weekly, 30 out of a possible 32 IT contractors have left the IT project at the MoD agency.

A public sector contractor said: “UKHO started to say recently they wouldn’t accept independent contract reviews as an assurance any more, and they started to make tougher demands to the point it became a lot harder to be a contractor working there.”

But in a statement, a UKHO denied that it has pre-emptively adopted the IR35 changes. “We have not implemented any early changes to the IR35 rules – the government is still consulting on this.”

* *  *

Accountant jailed for 28 months

Lincolnshire accountant Jane Moore who stole over £125,000 from three employers over a ten year period has been jailed for 28 months, reports the Skegness Standard.

Moore had managed to transfer money from her employers’ bank accounts by encouraging them to move to computing banking.

Moore’s thefts caused one of her victims to remortgage their homes and cash in a pension.  However, Moore who pleaded guilty as soon as the matter came to light claimed she took the money to pay bills.

Passing sentence Judge John Pini QC told Moore: “Had you not been caught I believe there is little doubt you would have continued to behave in this way.”

* * *

The Accountant doesn't add up

The reviews are in for The Accountant and they’re not good! Ben Affleck’s latest flick has received a lukewarm reception from critics, with many giving it an underwhelming two star review.

The financial thriller has been criticised for its clichéd representation of autism and having a disjointed plot. Keith Stuart, reviewing the film for Empire magazine, says “The Accountant is as confusing and seemingly futile as an HMRC tax credit form — and it only takes marginally less time to complete.”

While The Guardian says: “The Accountant uses a cliched and misleading presentation of disability to produce a cliched Hollywood action lead in a cliched action plot, and then babbles cliches about the importance of embracing difference.”

So, who’s booking their tickets to this one then?

Replies (5)

Please login or register to join the discussion.

By DotasScandalDotOrg
13th Oct 2016 10:17

Er...so, "UKHO denied that it has pre-emptively adopted the IR35 changes" but "contractors were told they could side-step the assurances issue by agreeing to be taxed in the same way as a regular employee or cease working there from 1 September 2016." Sheer hypocrisy on the part of the HO. Sounds very much like they gave a "my way or the highway" ultimatum to all contractors. To which contractors responsed by voting with their feet...as had been foreseen for months by the contractor community at large.
We wish that this will make the Government pause for thought, but somehow doubt it.

Thanks (0)
By DotasScandalDotOrg
13th Oct 2016 11:09

Some food for thought re IR35, from another forum:

"There are many reasons IR35 was a shockingly bad piece of legislation. From a personal perspective here is my take on it.

Being inside IR35 basically says that you are really an employee of your end client and trying to disguise the fact. This would be much worse than being an employee for the following reasons:

VAT liability, I asked Her Majesty’s Custom’s and Excise if I was inside IR35 could I deregister for VAT. Their reply was that I would still have to charge VAT and that were my company not to do so they would ultimately come after me as a director for criminal fraud. As most of my clients were Financial Institutions who could not claim back VAT the full amount charged was paid 100% to the treasury. NO EMPLOYEE WOULS BE EXPECTED TO CHARGE OR COLLECT VAT. Nor would they be crimally liable if it were not charged.

During my work for clients my company had to carry Professional Indemnity Insurance. This was almost always written into the clients contact. If I was working on financial trading systems often the premiums for this would be excessive. My company had to also provide Public Liability Insurance. NO EMPLOYEE WOULD BE ASKED TO PROVIDE PROFESSIONAL INSURANCES TO INDEMNIFY THEIR EMPLOYER.

My responsibilities as a company director meant I was responsible for filing Company Accounts and Returns. The clients I worked with would not hire me unless I traded through a Limited Company. NO IT EMPLOYEE WOULD BE ASKED TO FILE COMPANY RETURNS LET ALONE PAY FOR THEM OR BE RESPONSIBLE FOR THEM.

The ultimate injustice was that if I truly was an employee as the Inland Revenue were asserting they would ask me to pay the Employer National Insurance. NO EMPLOYEE PAYS EMPLOYERS NATIONAL INSURANCE. I would also be responsible for the payment of PAYE income tax and Employees National Insurance. NO EMPLOYEE IS RESPONSIBLE FOR PAYING PAYE INCOME TAX AND EMPLOYEES NATIONAL INSURANCE as this is normally deducted by the employer.

Along with this I would have no employment rights, paid holiday or paid sick leave. AN EMPLOYEE HAS ALL THESE LEGAL RIGHTS."

Thanks (12)
avatar
By Mallock
14th Oct 2016 11:28

Everyone could be saved a massive amount of uncertainty and expense if HMRC just ditched IR35 and increased the Dividend Tax a bit, although I would rather see Er's NI absorbed into taxes on profit instead of being a tax on employment but that will never happen.
In a post Brexit world the UK is going to have to have a flexible and cost effective workforce and imposing IR35 "rules" in a hard handed way is just going to make UK plc even less effective and efficient.

Thanks (4)
Replying to Mallock:
avatar
By schocca
15th Oct 2016 23:39

Dividend taxes have already been increased to cover this... so does it need to increase further?

I must admit that increasing Dividend tax rates will just mean that people will not take their money out of the company and it sits around gathering dust...

Don't forget that they are also talking about "look through" company structures for small companies which deems the company income as personal income for tax purposes... (OTS 2016)

Thanks (2)
Chris M
By mr. mischief
15th Oct 2016 18:48

I think the post from another forum sums up what an utter load of twaddle IR35 is, and always has been.

Personally I think corporation tax worldwide is totally busted. So let's scrap it completely and just put in place a dividend tax to balance up the hole in the deficit. We can also scrap IR35 because the dividend tax would sort out the perceived tax gap for contractors.

If the Office of Tax Simplification were worth its salt this is the sort of stuff it would have come up with.

Thanks (1)