# Any accountants or IT contractors in here? Or anyone who knows about ir35?



## Deniance (Jun 28, 2008)

Hi everyone, but random but just wondering if someone can help with a few contracting and ir35 questions?


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## Fentum (May 1, 2017)

I'm neither, but have been potentially subject to IR 35 on various contracts I perform, and have declined others because of it. Ask away!

Peter


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## mawallace (Apr 18, 2017)

Fentum said:


> I'm neither, but have been potentially subject to IR 35 on various contracts I perform, and have declined others because of it. Ask away!
> 
> Peter


I am an accountant - if you pm me I will try to answer any questions - but I won't be online until tomorrow evening!


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## -Stuart W- (Dec 28, 2007)

I'm in finance and understand IR35 a little


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## Deniance (Jun 28, 2008)

Yay! Thanks guys, ok
Totally random, but here goes!!
I’m an electrician, and I just work for agencies, on construction sites , I’ve heard about the proposed ir35 private sector reforms and wondered if they would affect me and my colleagues?
I phoned an agency when I was younger in like 2001? And was told to phone tax man and get a aUTR number so I could get paid via the CIS scheme 

This was just how the agencies operated, then in 2003 they said that they were unable to pay cis any longer and moved everyone to an umbrella company which was a complete rip off, then a few years later cis made a comeback and now they pay either umbrella, cis or ltd company.

I am not self employed never have been, the 3 methods are just a facade for an agency to pay you

I get work on a construction project , the main contractor is amec, the electrical company is bilfinger who uses heads eng. agency who pay me cis and make me use a payroll company to pay me (£25 a week)

They just deduct 20% tax and I get an accountant to do my tax return every year
Other guys set up a ltd company and accountant does the rest 

So I was wondering what the new ir35 private sector reforms which look to start in April 2019 will mean to us ?

It’s all false self employment on a massive scale, we should be employed Paye but it’s a massive massive tax scam in our industry, companies and agencies know this and it just never stops, I work for different agencies and companies all the time but it’s juat the same model over and over

So I’m doing some research to see if things are going to change

Any advice or info is appreciated , thanks guys!!


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## Fentum (May 1, 2017)

Deniance said:


> Yay! Thanks guys, ok
> Totally random, but here goes!!
> I'm an electrician, and I just work for agencies, on construction sites , I've heard about the proposed ir35 private sector reforms and wondered if they would affect me and my colleagues?
> I phoned an agency when I was younger in like 2001? And was told to phone tax man and get a aUTR number so I could get paid via the CIS scheme
> ...


At the moment, it only affects the public sector but as you say there are rumours it will be extended. It is a dog's breakfast and the bad news for you is that agencies and employers are taking a blanket approach saying all contractors are "in". It's wreaking havoc in the cIvil Service and NHS.

In essence in your case I'd imagine the main hurdle you'd have to clear is how much autonomy you have to decide how (and when) you do your work. Just having your own tools is not enough.

Do you get perks/benefits - staff canteen etc? If yes, hard to say genuinely not a member of staff

Do you manage people who are employer's staff? If yes, hard to avoid IR35.

Also the level of risk - if you **** up, do you have to put it right at your own expense? Or not get paid?

Related to this, do you take out professional indemnity insurance? If yes, it would tend to say you are genuinely self-employed.

This is a useful site: https://www.qdoscontractor.com/news...ng?utm_source=ir35newsletter&utm_medium=email

HTH

Peter


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## jr2007 (Oct 5, 2016)

IR 35 has been around for a long time and has always affected everyone, the IT industry bore the brunt of it because of the wide scale changes in employment format in that particular industry. Other industries that have been subject to specific campaigns in recent years include research analysts, finance and banking professionals, and interim C-suite executives.

Essentially whether you are an employee or not is a question of fact and not dictated by the method by which you are paid (via PAYE, paid directly, paid via a personal service company etc.). This has been the case for several years now and the proposed changes do not seek to change this. If you are at risk of being considered an employee, you should talk to a specialist tax advisor about potential exposure and mitigation strategies. This could be also be an accountant if suitably qualified but be wary if they try to sell you investigations insurance instead of advising on maintaining a correct position.


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## jr2007 (Oct 5, 2016)

Just to add, HMRC have won their first IR35 case in seven years against a former BBC presenter. Although the facts of the case may be quite different to yours (particularly as that presenter had a 7 year contract that stated the personal service company had to provide the presenter specifically for work), HMRC are stepping up their activity around personal service companies and testing in more detail whether the nature of work is that of employment.


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## Andy from Sandy (May 6, 2011)

If you are not self employed then what is your employment status?

If you use an umbrella company then as far as the tax man is concerned you are a permanent employee of that company.

You are either inside or outside of IR35. To be outside you need to show that you are autonomous in that you are not told what to do or you are not supervised and that you can come and go as you please so long as what you have been contracted to do gets done in the time frame you agreed.

Inside IR35 you go to site and are instructed as to what you are going to do. Your contract will be quite open showing that you will just provide your services for x number of days.

If your contract was for plumbing but you were instructed to do bricklaying and you did then you are inside IR35.

All of this though is only true if you are truly self employed with your own company or a sole trader. The reason for a ltd company is just that, limited liabilities where a sole trader is fully liable.


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## jr2007 (Oct 5, 2016)

Andy from Sandy said:


> All of this though is only true if you are truly self employed with your own company or a sole trader. The reason for a ltd company is just that, limited liabilities where a sole trader is fully liable.


Having a limited company doesn't protect you from IR35 exposure though as the hypothetical employment contract is either imposed between you and your employer or between you and your PSC (where the PSC is deemed to be your employer). In either circumstance, you will be faced with a significant tax bill plus interest where HMRC succeed in their argument.


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