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IR35 Myths

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    #21
    Originally posted by TheInvoicer View Post
    Scenarios 3 I don’t think is realistic, there will be requirements, technical standard from client and no doubt progress reporting, demos required etc changes being dictated by client etc etc it’s not to take away the point your making but there will be “control” as such between contract and end software to ensure it’s the product they want to the time they want.
    Control is very grey to me like all of this, I’ve been forced on occasions to be onsite etc (looking like A without the manager bit) but the reality of day to day working is they have no control and don’t want it, you lead/deliver how you want etc.



    Sent from my iPhone using Tapatalk
    Surely there will always be requirements, standards and progress reporting etc? That's not control. For instance, a company isn't going to ask you for a piece of software then say it doesn't matter what it does or whether it works, we'll just pay for it. The likelihood is that there will be interim payments for work throughout the development of the software for which the company will have set targets that need to be met before those payments are made. I think scenario 3 is without doubt outside.
    I also think that there will be long and expensive legal arguments in the coming couple of years that will set precedents and bite the government in the arse in a big way, but that's just my opinion

    Comment


      #22
      Originally posted by WatkinG View Post
      If I had two clients and did the majority of my work for one, how much would I have to do for the other to fall outside of the IR35 trap, if indeed there is a proportion that would remove me at all? Also, would this be viewed as time spent working for each company or for invoice value?
      There is no such proportion. Theoretically you could have a one day/month contract that was inside IR35. Part time employees don't stop being employees just because they're part time.

      In practice the less time you work for a given company the less likely it is to be deemed inside IR35, but don't fall into the trap of thinking just because a contract is less than full time hours it can't be inside IR35.

      Comment


        #23
        Just catching up on this thread, so sorry for picking up on a couple of posts from some time ago.

        Originally posted by malvolio View Post
        It is accepted that there is always some mutuality in any contract else there would be no reason to pay you or for you to do the work once paid.

        But having to accept or offer work once the agreed contract has been fulfilled is, as you say, a killer to an IR35 defence.
        Originally posted by northernladuk View Post
        Are you not falling in to another IR35 myth which is around what MoO actually is? It's the obligation to provide work AFTER the agreed assignment is over.
        If these two quotes related to MoO (which I believe are saying the same thing) are true then I don't think I've ever seen a contract that states within it that there's an obligation to offer or accept further contracts. So unless HMRC could prove unequivocally that there was an unwritten commitment to offer or accept more work after the existing contract ended, why are we all so worried?

        I get I must be missing something, but my analytical brain says - if these statements are true, then IR35 shouldn't be a problem because none of our arrangements have enough MoO, yet, IR35 is a problem.

        Comment


          #24
          Originally posted by meanttobeworking View Post
          Just catching up on this thread, so sorry for picking up on a couple of posts from some time ago.





          If these two quotes related to MoO (which I believe are saying the same thing) are true then I don't think I've ever seen a contract that states within it that there's an obligation to offer or accept further contracts. So unless HMRC could prove unequivocally that there was an unwritten commitment to offer or accept more work after the existing contract ended, why are we all so worried?

          I get I must be missing something, but my analytical brain says - if these statements are true, then IR35 shouldn't be a problem because none of our arrangements have enough MoO, yet, IR35 is a problem.
          As I understand it, because HMRC's interpretation of MoO is different to that of others.

          HMRC believe MoO automatically exists when you enter into a contract for an assignment, hence it's a given and not mentioned in the CEST tool. The reality is that MoO is an obligation to continue to offer work and an obligation to take it.

          It's easier to see when you compare yourself to a permanent member of staff. I have been furloughed this Christmas, so the client has within my contracted assignment dates not provided me work for 2 weeks, as they are not obliged to. This breaks any suggestion of MoO IMO. The permanent members of staff will have little or no work to do over xmas, but the client will have to find them something to do and the permanent member of staff will be obliged to accept it.

          Another example of the obligation is an assignment that within the contracted period just stops, maybe due to budgets the project gets canned, you have another 2 months till the end of the contract, but there is no work, the client is not obliged to continue to give you work to fill your time for the next 2 months. If you were a permanent member of staff in a pure projects team, the client would be obliged to put you onto another project and you would be obliged to accept this.

          What confuses me is why MoO is not a silver bullet, I have never had a contract that defines or implies this obligation, I fully understand and believe the client is not obliged to provide me continued work and me to accept. And if they ever went directly to the client to ask this question then the client would confirm this to be the case.

          I suspect HMRC are selective in what they choose to make a determination on....

          Comment


            #25
            Originally posted by LetterBox View Post
            As I understand it, because HMRC's interpretation of [insert any subject here] is different to that of others.
            This is the root of most problems I believe!

            Appreciate the reply, it makes a lot of sense.
            Last edited by meanttobeworking; 18 December 2019, 16:08. Reason: Fixed use of wrong homophone :D

            Comment


              #26
              Originally posted by LetterBox View Post
              As I understand it, because HMRC's interpretation of MoO is different to that of others.

              HMRC believe MoO automatically exists when you enter into a contract for an assignment, hence it's a given and not mentioned in the CEST tool. The reality is that MoO is an obligation to continue to offer work and an obligation to take it.

              It's easier to see when you compare yourself to a permanent member of staff. I have been furloughed this Christmas, so the client has within my contracted assignment dates not provided me work for 2 weeks, as they are not obliged to. This breaks any suggestion of MoO IMO. The permanent members of staff will have little or no work to do over xmas, but the client will have to find them something to do and the permanent member of staff will be obliged to accept it.

              Another example of the obligation is an assignment that within the contracted period just stops, maybe due to budgets the project gets canned, you have another 2 months till the end of the contract, but there is no work, the client is not obliged to continue to give you work to fill your time for the next 2 months. If you were a permanent member of staff in a pure projects team, the client would be obliged to put you onto another project and you would be obliged to accept this.

              What confuses me is why MoO is not a silver bullet, I have never had a contract that defines or implies this obligation, I fully understand and believe the client is not obliged to provide me continued work and me to accept. And if they ever went directly to the client to ask this question then the client would confirm this to be the case.

              I suspect HMRC are selective in what they choose to make a determination on....
              Yup, Agreed.

              Exactly what I was saying in the Sky Thrust thread about MoO. But not only have HMRC incorrectly defined but, in Sky's case, Ernst Young too, it seems... Oh dear.

              Comment


                #27
                PAYE

                Sorry I am newly back to the UK and trying to understand IR35

                If I work for 2 or more clients and invoice all of them, but pay myself 50% of the fees received via PAYE (through my own Ltd payroll) leaving the rest to roll up in the business how does that work?

                I am accounting for PAYE on some income not drawing out dividends on rest.

                Can it be the case that I consider some aspects of the roles within IR35 but not all so I am part and part? Or can I pay myself less than the company is paid for the work done?

                Thanks

                Mark

                Comment


                  #28
                  Originally posted by LetterBox View Post
                  As I understand it, because HMRC's interpretation of MoO is different to that of others.

                  HMRC believe MoO automatically exists when you enter into a contract for an assignment, hence it's a given and not mentioned in the CEST tool. The reality is that MoO is an obligation to continue to offer work and an obligation to take it.

                  It's easier to see when you compare yourself to a permanent member of staff. I have been furloughed this Christmas, so the client has within my contracted assignment dates not provided me work for 2 weeks, as they are not obliged to. This breaks any suggestion of MoO IMO. The permanent members of staff will have little or no work to do over xmas, but the client will have to find them something to do and the permanent member of staff will be obliged to accept it.

                  Another example of the obligation is an assignment that within the contracted period just stops, maybe due to budgets the project gets canned, you have another 2 months till the end of the contract, but there is no work, the client is not obliged to continue to give you work to fill your time for the next 2 months. If you were a permanent member of staff in a pure projects team, the client would be obliged to put you onto another project and you would be obliged to accept this.

                  What confuses me is why MoO is not a silver bullet, I have never had a contract that defines or implies this obligation, I fully understand and believe the client is not obliged to provide me continued work and me to accept. And if they ever went directly to the client to ask this question then the client would confirm this to be the case.

                  I suspect HMRC are selective in what they choose to make a determination on....
                  The case law as per RMC is not about the existence of MoO, it is about "an irreducible minimum of Mutuality of Obligation". Therefore it is accepted that there is always a degree of mutuality, else nobody would ever get paid and/or the work wouldn't be done. The test is usually summarised in the no work/no pay we all understand but that is a gross over-simplification.

                  So while HMRC is not wrong to say that MoO is present in all contracts, they are utterly wrong to say it doesn't therefore matter and can be ignored. they are also wrong to conflate MoO with SD&C in the case of, for example, furloughs. The client is not telling you not to work, which would be D&C, but is simply not offering work for a period.And IR35 cases have been won on that basis.

                  As always we are fighting a mendacious and badly misinformed opponent, who have the ears of HMG.
                  Blog? What blog...?

                  Comment


                    #29
                    Originally posted by malvolio View Post
                    The case law as per RMC is not about the existence of MoO, it is about "an irreducible minimum of Mutuality of Obligation". Therefore it is accepted that there is always a degree of mutuality, else nobody would ever get paid and/or the work wouldn't be done. The test is usually summarised in the no work/no pay we all understand but that is a gross over-simplification.

                    So while HMRC is not wrong to say that MoO is present in all contracts, they are utterly wrong to say it doesn't therefore matter and can be ignored. they are also wrong to conflate MoO with SD&C in the case of, for example, furloughs. The client is not telling you not to work, which would be D&C, but is simply not offering work for a period.And IR35 cases have been won on that basis.

                    As always we are fighting a mendacious and badly misinformed opponent, who have the ears of HMG.
                    If case law dictates that HMRC's understanding of MoO is wrong, and on the assumption that every client should be happy to accept, agree, and confirm the existence of an arrangement that means they only have to pay for work that's done (and why wouldn't they be happy to do so?), surely the only IR35 cases that are lost (by the contractor) should be when the contractor refused to accept an arrangement whereby they would not be paid if they do not work.

                    Which would be very silly of the contractor, and demonstrate that they are thinking very much like a disguised employee.

                    So (genuine question) why is every IR35 defence not simply to evidence that the contractor is not expecting to get paid when they don't work, and the client is not expecting to pay them when they don't work? Is this where HMRC start muddying the waters with talk of zero-hours contracts etc?

                    Comment


                      #30
                      Originally posted by meanttobeworking View Post
                      If case law dictates that HMRC's understanding of MoO is wrong, and on the assumption that every client should be happy to accept, agree, and confirm the existence of an arrangement that means they only have to pay for work that's done (and why wouldn't they be happy to do so?), surely the only IR35 cases that are lost (by the contractor) should be when the contractor refused to accept an arrangement whereby they would not be paid if they do not work.

                      Which would be very silly of the contractor, and demonstrate that they are thinking very much like a disguised employee.

                      So (genuine question) why is every IR35 defence not simply to evidence that the contractor is not expecting to get paid when they don't work, and the client is not expecting to pay them when they don't work? Is this where HMRC start muddying the waters with talk of zero-hours contracts etc?
                      Except every case that has been won - and there are a lot of them - have centered on that work for pay situation and whether or not the worker was required to do work and where and how. Only HMRC keeps bringing cases challenging that and only HMRC keeps losing.

                      So the real question is why doesn't CEST reflect case law rather than HMRC's view of what case law should be?
                      Blog? What blog...?

                      Comment

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