IR35 and Subsistence

[The SMG]

Cracking article from Bel Grant today...

http://www.freelancesupermarket.com/...r-thought.aspx

[curleyted]

One presumes that's the Bel who posts on here?

[CrazyMoose]

Originally Posted by curleyted

One presumes that's the Bel who posts on here?

I think so yes - a really well crafted and thoughtful bit of copy. Well done Bel.

[Bel]

I aim to please. And, yes, it is me.

Thanks for your kind comments.

[The SMG]

Originally Posted by CrazyMoose

I think so yes - a really well crafted and thoughtful bit of copy. Well done Bel.

I agree. There are many contractors out there that don't give a second thought to eating at clientco's canteen. I'm not talking on a one off basis, I’m talking every single day of the week for the duration of their long term (c 12 months +) contract. These contractors are the very people that HMRC were targeting when they dreamt up IR35. I'm not saying IR35 is a good thing, don't get me wrong. I'm saying that as a contractor, you have a duty of care to ensure you don't leave yourself exposed to an HMRC investigation by paying yourself a big fat dividend every month but acting in exactly the same way as clientco's employees.

G

[lurch]

You're right, and it's especially true given the way HMRC's targets have changed over the last 2 years. The umbrellas worth going after have got the compliance largely sewn up (or have made it legally complicated enough that it would be highly expensive), so they are going after the people in more vulnerable positions, the agencies and the contractors.

[JeffreyC]

I know Bel touches on it in that article, but it might be worth noting that none of that will matter if you work through an umbrella company.

[Bel]

Originally Posted by JeffreyC

I know Bel touches on it in that article, but it might be worth noting that none of that will matter if you work through an umbrella company.

Perhaps I should have made that clearer, but I did open the article with 'owner managed contractors...' I try to avoid the label 'personal service companies' because that upsets too many people.

Thanks anyway.

[CrazyMoose]

Originally Posted by JeffreyC

I know Bel touches on it in that article, but it might be worth noting that none of that will matter if you work through an umbrella company.

Good point. The only thing that does matter (when you work through an umbrella company) is that you only claim for what you actually incurred. It's no good spending £3.99 on a Boots Meal Deal but putting through a flat £27 per day subsistence claim just because your umbrella has a 'generous' dispensation from Hector.

[Beefy198]

And it's worth noting that it's not worth buying anything if you could have easily and happily made it at home and taken it to work. The number of people who think that you either get the full amount back through your tax, or that it is more beneficial treating it as an expense is quite scary.

The lesson: make sandwiches if you can.