There is actually a much wider point to turning on the pressure with our clients to re-establish the demarkation lines.
Typically we used to fight IR35 based on the fact that it was only about national insurance tax and nothing to do with being an employee. So a poor sod that was paying Corporation Tax, Personal Tax and VAT was suddenly really an employee all a long and it was his/her fault despite there being two or more parties in the mix.
I never understood why because it seemed standard logic to me that if I was treated as employed for tax then there was a case to ask why it was solely the fault of the guy that set up a company and paid loads of new business taxes.
To me there are a few points that need to be fought for the safety of contracting. If the law of our land is based on proving intent as well as guilt then:
1) If I register a business, hire an accountant, raise invoices generate profits and then pay the business taxes on those profits then in a point of law it should be relatively simple to prove what my intention was with regards to being a business or an employee. - (if you replace some words in that sentence with duck tape, plastic sheeting and knives it would make a pretty tight case for premeditated murder no?)
2) If a client doesn't understand how to use my specialist skill set and instead is intent on forcing their will on me, then that is no longer a consensual act as I have already proved my intent of operation its called coercion. (We all know that contract law is based on a meeting of minds for mutual benefit.) Telling everyone they are now inside IR35 is not a meeting of minds its a use of mental force.
3) The only thing that HMRC understand is money so the way to make them understand is to get to a point where you can
1) Prove you were forced inside IR35 against your will
2) Prove that it made you an employee and you are owed additional compensation for that
3) Prove that employees should not be charging VAT and get a case in the courts as fast as possible to establish that VAT wrongfully collected by someone found to be a disguised employee should be returned.
All of this is possible based on case law already in our civil law statutes.
No more bleating about it won't work. Its time to show that it will work just not the way they thought it would....
Typically we used to fight IR35 based on the fact that it was only about national insurance tax and nothing to do with being an employee. So a poor sod that was paying Corporation Tax, Personal Tax and VAT was suddenly really an employee all a long and it was his/her fault despite there being two or more parties in the mix.
I never understood why because it seemed standard logic to me that if I was treated as employed for tax then there was a case to ask why it was solely the fault of the guy that set up a company and paid loads of new business taxes.
To me there are a few points that need to be fought for the safety of contracting. If the law of our land is based on proving intent as well as guilt then:
1) If I register a business, hire an accountant, raise invoices generate profits and then pay the business taxes on those profits then in a point of law it should be relatively simple to prove what my intention was with regards to being a business or an employee. - (if you replace some words in that sentence with duck tape, plastic sheeting and knives it would make a pretty tight case for premeditated murder no?)
2) If a client doesn't understand how to use my specialist skill set and instead is intent on forcing their will on me, then that is no longer a consensual act as I have already proved my intent of operation its called coercion. (We all know that contract law is based on a meeting of minds for mutual benefit.) Telling everyone they are now inside IR35 is not a meeting of minds its a use of mental force.
3) The only thing that HMRC understand is money so the way to make them understand is to get to a point where you can
1) Prove you were forced inside IR35 against your will
2) Prove that it made you an employee and you are owed additional compensation for that
3) Prove that employees should not be charging VAT and get a case in the courts as fast as possible to establish that VAT wrongfully collected by someone found to be a disguised employee should be returned.
All of this is possible based on case law already in our civil law statutes.
No more bleating about it won't work. Its time to show that it will work just not the way they thought it would....
Comment