'Appalling' IR35 reform email targeting limited company contractors receives short shrift
A poorly written yet still predatory email sent to exploit fears about 2021’s IR35 reform, while trying to drum up business for the author, is being condemned by contractors and advisers alike.
The 250-word sales pitch which landed in PSCs’ inboxes yesterday makes the totally false claim that “no longer will contractors be able to be paid via a limited company” from April.
It then wrongly says such workers today get “80% returns”, before adding another falsehood -- that the legislation from April “requires” contractors to “change the way [they] do their payroll.”
"Contractors aren't changing the way they do payroll, it's the determination of status that's changing," corrected Patrick Gribben, head of client services at Intouch Accounting.
"And there are still going to be options for an engagement that has been judged inside IR35 to have remuneration made to the limited company, after the deduction of taxes."
Some of the less obvious clangers were flagged up by veteran contractors online after the email was uploaded to LinkedIn, yet there is a fear that new contractors may still be taken in.
'Umbrella company partnerships'
Indeed, an attempt to reel-in newcomers ends the email. “I’m setting up a company and have partnerships already with umbrella organisations to get you free information today,” it states.
The mention of tie-ups with umbrellas is another of the email’s kernels of truth according to Lucy Smith, managing director of Clarity Umbrella, who was shown the wording last night.
“These ‘partnerships’ are something I’ve seen brokers advertise, so they are a thing.
“But many of these brokers entice with details…[only for] the replying contractor to then get bombarded by a heavy-handed sales team,” she warned.
'Designed to scare'
Helen Christopher, a chartered accountant and the operations director at Orange Genie, says she felt “appalled” when reading the email.
“This is designed purely to try and scare contractors into signing up for the sender’s services or partner umbrellas," she added.
“[The author] provides no context or a balanced view of the [incoming] IR35 changes that would allow contractors in receipt of it to make an informed decision.”
She also said the emailer fails to demonstrate both a basic grasp of English (it appears to have been written in a rush, as words are missing), and a basic understanding of the 2021 reforms.
'HMRC helps create an environment for IR35 con artists'
A health and safety director in the oil and gas sector isn’t surprised. “Unfortunately there is a lot of this going on,” he posted.
“I have had calls…from umbrella companies making all sort of claims and offers…[even] 90% take-home after tax and NI if I went with them.”
As to potential causes of such attempts to enlist users into abusive arrangements, the director reflected: “The IR35 reforms and threats from HMRC are creating an environment for theses con-artists to thrive.”
Asked yesterday for his assessment, David Kirk, a tax consultant who specialises in employment status, suggested that he wouldn’t even dignify the email with a response.
“It looks like a scam,” he told ContractorUK. “Anyone who talks about taking home 80% is up to something nefarious.”
One contractor 'Chris' sounded more forgiving. “The word ‘requires’ is the only outright lie”, he said, citing the email’s wording.
“It's not required, but going on payroll -- direct or via an umbrella, does indeed mitigate your risk.”
'Pretty pointless, or dangerous'
At Clarity, Ms Smith reflected: “If there are any legitimate brollies linked to this [organisation which is behind the email], it will be a paid-system I guess.
“But most standard brollies are probably unlikely to enter into such a system. So it seems pretty pointless, and may just be originating from a ‘compare brollies’-type of business.”
Or it could be masking something more sinister.
"This looks like a dangerous precursor to a dodgy umbrella offering to guarantee taxpayers the ability to take-home 80%-plus and so should be avoided at all costs," preferred Intouch's Mr Gribben.
"Anyone who is concerned about IR35 reforms and the impact on their income should speak with an IR35 specialist and consider how they can communicate what makes their engagements outside IR35 to end-hirers."
Regardless of its origins or intentions, the contractor who originally uploaded the email doesn’t sound as like he’s taken the bait.
'Fear and anxiety'
“[This is] a misrepresentation of a part of the truth, bent to fit a particular narrative,” he said.
"They are being selective with the truth in order to make a quick buck.
"And they are engaging the common tactic of generating fear and anxiety”.