5 ways to minimise IR35

[The SMG]

A mate of mine and I were chatting about this earlier. He is VERY worried about IR35 (don't know why). Here's my take on staying in Hector's good books.

1. Get you contract sorted (possibly reviewed professionally)
2. Sort out your working arrangements
3. Look at the self employment tests (substitution, Control, MOO, Financial Risk)
4. Take out business insurance (possibly IR35 tax loss)
5. If you are in any doubt, use the deemed payment calculation or work through an Umbrella Company.

Any other ideas?

General

[CrazyMoose]

IR35 will be abolished soon I’m sure. PCG et al are lobbying hard so it won't be too long before all this attention gains some serious momentum. Looks like John Brazier even has his own blog! http://insidepcg.wordpress.com/

Upshot, it's a complete waste of time and money for all concerned, even HMRC.

Watch this space.

[Azeey]

I don't share your optimism. We're in a recession, the government want all the money they can get and the general public won't give a rats **** about those poor contractors.

[The SMG]

Originally Posted by Azeey

I don't share your optimism. We're in a recession, the government want all the money they can get and the general public won't give a rats **** about those poor contractors.

Steady Azeey, quotes like "those poor contractors" aren't gonna do you any favours in here. I wouldn't define myself as 'poor' even if I do only take 80% from £350 a day!

G

[CrazyMoose]

Originally Posted by The SMG

Steady Azeey, quotes like "those poor contractors" aren't gonna do you any favours in here. I wouldn't define myself as 'poor' even if I do only take 80% from £350 a day!

G

The only way you can take 80% is by going outside IR35. Most contractors on here tend to favour the umbrellas, in which case they're probably only netting something in the region of 65-70%. I personally like to mix it up a bit, just to show Hector i'm not royally taking the p1ss. Inside IR35 for contract one (deemed payment), outside IR35 for contract two, Inside IR35 for contract three....

[ShortStraw]

Originally Posted by The SMG

Steady Azeey, quotes like "those poor contractors" aren't gonna do you any favours in here. I wouldn't define myself as 'poor' even if I do only take 80% from £350 a day!

G

I see his point. Look at the teachers - they're in a pretty recession proof job and want a hefty pay rise. Most of the public (who are facing uncertain futures) will think they're opportunistic ****s

[Beefy198]

I'm sure teachers work hard but they've picked a hell of a time to start crying for a pay rise.

[Seb Maley]

Going back to the original point, one of the very best ways is to confirm the working arrangements with the end client in writing. This will preempt and hopefully negate HMRC's need to obtain damaging statements from the client, drastically improving the chances of success.

Of course, many end clients - particularly large companies - are rather hesitant to sign such documents, but if you've got a decent relationship with a responsible individual it's worth a shot. We've got a standard document if anyone wants it.

[CrazyMoose]

Originally Posted by Seb Maley

Going back to the original point, one of the very best ways is to confirm the working arrangements with the end client in writing. This will preempt and hopefully negate HMRC's need to obtain damaging statements from the client, drastically improving the chances of success.

Of course, many end clients - particularly large companies - are rather hesitant to sign such documents, but if you've got a decent relationship with a responsible individual it's worth a shot. We've got a standard document if anyone wants it.

Isn't this just another contract below a (services) contract? I always thought that HMRC looked beyond the written contractual arrangements and instead focused on the true working relationship between contractor and client.

Also, how important is the agency / client contract if you don't work direct? I have to say that in all my years of contracting I’ve never once seen this.

Thanks

[Seb Maley]

Originally Posted by CrazyMoose

Isn't this just another contract below a (services) contract? I always thought that HMRC looked beyond the written contractual arrangements and instead focused on the true working relationship between contractor and client.

Also, how important is the agency / client contract if you don't work direct? I have to say that in all my years of contracting I’ve never once seen this.

Thanks

The document is a written confirmation of the true working relationship. It doesn't form any sort of contract and is only used in the case of an enquiry. It is the same method HMRC would use when obtaining details on the working practices, although our document makes sense and isn't full of leading questions.

Sadly the upper level contract has become more important. 99% of contractors will never see it and I'm pretty sure 99% of upper level contracts are total rubbish. It could cause a real issue in an enquiry.

Unfortunately I don't think agencies/clients will sort their upper level contracts out until a disgruntled contractor sues them for duplicity. But that's another issue entirely.