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IR35 reforms could put contractors at risk of 'second wave' of loan charge bills

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    #11
    Originally posted by dx4100 View Post
    I an going to be that arse and say I have no sympathy with anyone jumping on a "scheme"...

    its pretty clear what you can and cannot do and if other don't want to do their due diligence then more fool them.
    I used to think that but over the years the schemes have got far more sophisticated to the point that I've even seen agencies fall for their statements.

    If HMRC want people to use umbrella companies I really do think HMRC should devote some time to vetting umbrella companies and listing the ones they find compliant on an easy to access Government site.
    merely at clientco for the entertainment

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      #12
      Originally posted by eek View Post
      If HMRC want people to use umbrella companies I really do think HMRC should devote some time to vetting umbrella companies and listing the ones they find compliant on an easy to access Government site.
      Yup, a very good point.

      And bearing in mind how that went for all the Loan Charge people who say they had their methods reviewed and positively vetted, plus how the HMRC vet their up and coming IR35 court cases to hilarious effect, how do we think that will unfold?

      (Sorry chaps, feeling very negative today...)

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        #13
        Originally posted by simes View Post
        Yup, a very good point.

        And bearing in mind how that went for all the Loan Charge people who say they had their methods reviewed and positively vetted, plus how the HMRC vet their up and coming IR35 court cases to hilarious effect, how do we think that will unfold?

        (Sorry chaps, feeling very negative today...)
        Um I suspect those Loan charge people didn't check things with HMRC or if they did they were being very generous in their interpretation of the responses.

        The issue I've found is that umbrella companies are low margin businesses which don't have the money to outspend other companies who may have an incentive to advertise more widely. Which means you really need a trust worthy one stop shop that you can point people to and the only people who could do that are sadly HMRC as who else could say we think this company is compliant.
        merely at clientco for the entertainment

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          #14
          Originally posted by cojak View Post
          The problem will be when the agent has a list with only 5 umbrellas on it, 3 of whom are schemes and one is their own.

          Then the only thing the contractor can do is walk away and let someone more gullible take it.
          If you have to walk away you have to walk away

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            #15
            Originally posted by eek View Post
            Um I suspect those Loan charge people didn't check things with HMRC or if they did they were being very generous in their interpretation of the responses.
            +1

            I've yet to see one piece of evidence from anyone that an Umbrella provided them with *anything* that showed HMRC had approved their scheme.

            Its the first thing I'd ask for if an Umbrella told me their scheme was HMRC-approved.

            I suspect they used words like "HMRC are aware", which is actually more of a red flag than a comfort!

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              #16
              HMRC approved in writing.
              "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
              - Voltaire/Benjamin Franklin/Anne Frank...

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                #17
                Originally posted by cojak View Post
                HMRC approved in writing.
                Letters can be faked. You need the information directly from HMRC that this umbrella is compliant which at the moment HMRC cannot and will not do.

                Personally though I don't see why an agency should be allowed to determine which umbrellas can be used - the agency should be paying you directly.

                The use of umbrellas is only there so they can make the rate 13%+ the umbrella fee higher than it actually is.

                Oh - plus the agency wants the kickback from the umbrella for being on the agency's approved list of agencies.
                merely at clientco for the entertainment

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                  #18
                  Originally posted by cojak View Post
                  HMRC approved in writing.
                  Anyone got a link for this?

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                    #19
                    Originally posted by Paralytic View Post
                    Anyone got a link for this?
                    The point is HMRC won't send things in writing because well - it's their get out clause.

                    They especially won't put anything useful on their website - for instance they now say be careful when choosing an umbrella company (heck that took them 18 years to put on the website) but they still don't say on that page what you should look for nor how to look for it.
                    Last edited by eek; 20 November 2019, 08:37.
                    merely at clientco for the entertainment

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                      #20
                      There is a third point here that I've so far forgot to mention:-

                      A contract outside IR35 is a business to business relationship. In a court of law the judge will expect both businesses to have do due diligence such as confirming the terms of engagement.

                      A contract inside IR35 is a business to employee relationship. As with all consumer legislation it is up to the business to ensure the employee knows what is expected of them.

                      Now the above didn't matter when IR35 was a personal decision - now that is no longer the case (and the business determines the type of relationship) the agency / contractor relationship is very different and I don't think many agencies will grasp that immediately. I suspect we will eventually see court cases where agencies can be shown not to have taken appropriate care when recommending an umbrella and get held liable for all costs.
                      merely at clientco for the entertainment

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