IR35 caught contactor wins holiday pay from HMRC

[malvolio]

The flexibility difference is very clear. You can bin or extend a contractor at will. With an FTC you can't do either without penalty.

[PTP]

You can bin or extend a contractor at will. With an FTC you can't do either without penalty.

Last time I was an FTC the company could terminate it any time by giving me 4 weeks notice.
That's more than flexible enough for companies. They don't really need the little bit of extra flexibility you're talking about that a contractor brings (or should that be brought?)

In fact with the way things are going, an FTC would be seen as a more flexible/attractive resource because while both are easy enough to terminate, they'll be able to get the FTC to do whatever tasks they want....whereas chances are a contractor would still have that less flexible mentality about tasks despite being inside IR35.

So I agree with what FB has been saying



If they really are trying to clampdown on tax dodging and not using contractors as a cash cow, then why do they refuse to even reconsider the FLC concept. How easy would it be to get clients to show HMRC what they've paid for comparable employees and that be sufficient evidence for a fair dividend/salary split.

[Fred Bloggs]

Last time I was an FTC the company could terminate it any time by giving me 4 weeks notice.
That's more than flexible enough for companies. They don't really need the little bit of extra flexibility you're talking about that a contractor brings (or should that be brought?)

In fact with the way things are going, an FTC would be seen as a more flexible/attractive resource because while both are easy enough to terminate, they'll be able to get the FTC to do whatever tasks they want....whereas chances are a contractor would still have that less flexible mentality about tasks despite being inside IR35.

So I agree with what FB has been saying



If they really are trying to clampdown on tax dodging and not using contractors as a cash cow, then why do they refuse to even reconsider the FLC concept. How easy would it be to get clients to show HMRC what they've paid for comparable employees and that be sufficient evidence for a fair dividend/salary split.

Thanks for your agreement.

I would pick up on one point you made. The concept of the FLC is barking mad. Your friends have made some very bad policy decisions the last few years and this one has to be one of the very worst.

The case for independent professionals has always been based on the premise that their ltd company nano business is indistinguishable from all the others in the economy. That you avoided IR35 legislation for so long is entirely due to the inability of HMG/ HMRC to segregate the independent professionals from all the other nano businesses out there. Targeting them has been like nailing jelly to the wall.

So, what does an FLC mean? It would instantly segregate your business into a separate category of business. Meaning that targetting legislation and taxation at those nano businesses is instantly achievable with none of the fall out that kept IR35 at bay for 20 years.

Be careful what you wish for. An FLC would be the business equivalent of posting a bull's eye on your back.

[psychocandy]

Its all getting a bit silly to be honest.....

Yes I can see the point where people are saying "Well if you're treating me like a disguised perme then I want permie rights". Not sure if this is a slippery slope to be honest and whether we really want this.

I've been in public sector IR35 gig since April 2017. I pretty much had to wind up my limited and go umbrella. BUT I knew the rate (which client had upped by 35% because of IR35) and I knew the score at the time. As far as I was concerned it was a contract with no rights as always. Only difference was I had to pay employers NI, pay an umbrella and all my salary would go through that way. BUT I knew all of this (take home was same as I always had in other gigs to be honest- due to the 35% increase).

See conversations on linked in about how the agency/umbrella should have been paying the Employers NI not me and people were out of pocket because of it. I just don't understand this - You'd know if first payslip and even then you should know because you signed the contract in the first place.

Just doesn't sit well with me to go back to client, agency, umbrella or whatever and now claim holidays./rights/employer NI back when you knew the terms of engagement at the beginning?

Strikes me as a bit of an ambulance chase....

[mudskipper]

I've been in public sector IR35 gig since April 2017. I pretty much had to wind up my limited and go umbrella. BUT I knew the rate (which client had upped by 35% because of IR35) and I knew the score at the time. As far as I was concerned it was a contract with no rights as always. Only difference was I had to pay employers NI, pay an umbrella and all my salary would go through that way. BUT I knew all of this (take home was same as I always had in other gigs to be honest- due to the 35% increase).

So in summary, your situation is completely different to Susan's.

[fidot]

But - Don't you see that encouraging "contractors" to claim employment rights is severely under mining your ability to do exactly this?

This isn't an action initiated by the contractor. It's the client who has already forced the contractor into that position. It's a consequence of the decision made by the client.

[DeludedKitten]

Just doesn't sit well with me to go back to client, agency, umbrella or whatever and now claim holidays./rights/employer NI back when you knew the terms of engagement at the beginning?

Can you cite a case where this has happened?

Hint - Susan't case isn't one

[simes]

Well done IPSE.

[ladymuck]

Just doesn't sit well with me to go back to client, agency, umbrella or whatever and now claim holidays./rights/employer NI back when you knew the terms of engagement at the beginning?

HMRC changed the terms of the engagement. She was fully out, operating via her own company. Then deemed caught and TOLD to go on an agency payroll, much like an Office Angel's temp would.

So, under AWR, would you not say she is a 'worker' and entitled to all that a person of that status should have?

[simes]

You'd hope that HMRC would take notice since this directly affects every IR35 caught contractor currently for them. I suspect that's why they settled out of court just before the case began. The last thing they want is precedent being set formally.

I am sure there is Nothing less formal about something being settled out of court.

It is a recorded victory for this argument irrespective of where it was settled.