Re: FN-FORUM: Ir35 legislation & opting out ?

date posted 30th October 2007 22:07

What are you talking about? IR35 came about to bridge the gap in tax loop
holes, and targetted in particular IT contractors who exploited it e.g.,
having an office at home and your spouse as a company secretary.

PCG are fine, and can give helpful advice. I'm part of them also - nothing
really to say against them. However, I'd still go to a qualified tax
accountant and competent lawyer for more specific issues, rather than ask on
forums. I'd rather pay the professional who is proficient and experienced
to protect my interests.

----- Original Message -----
From: "Dominic Raywood" [EMAIL REMOVED]
To: [EMAIL REMOVED]
Sent: Tuesday, October 30, 2007 10:46 PM
Subject: Re: FN-FORUM: Ir35 legislation & opting out ?

>
> Well, the PCG seems to have quite a good record in defending againt the IR
> lol I believe, they have still only lost 4 or 5 cases and won well over a
> thousand :)
>
> AND, IR35 wasn't about stopping tax avoidance. Running a legitimate
> company, be it small or BP; the rules should be the same. IR35 was to
> attack small businesses who they thought couldn't fight back. In
> particular: IT contractors, to try and get rid of the competition for
> large consultancies. One of whom, purely by co-incidence of course, had a
> major share holder in on producing this legislation.
>
> Pity for them, they picked on a highly literate, technically competent,
> intelligent bunch of people who simply grouped up and can now defend
> themselves quite well thank you :)
>
> I often wonder how much IR35 legislation has actually COST the government
> rather than brought in in extra revenue.
>
> You're not Dawn Primerolo are you lol
>
> Dawn Thomson wrote:
>> I might be one of those IR people you hear about and watching you ! Best
>> to heed the advice...take it or leave it...
>>
>> We can all be victims - IR, being a government organisation has infinite
>> resources (funded by the people they are chasing) and will get their
>> money, the temp/freelancer/contractor is not...
>>
>> ----- Original Message -----
>> From: "Dominic Raywood" [EMAIL REMOVED]
>> To: [EMAIL REMOVED]
>> Sent: Tuesday, October 30, 2007 10:14 PM
>> Subject: Re: FN-FORUM: Ir35 legislation & opting out ?
>>
>>
>>> Bit unnecessary isn't it Dawn? Unless I missed something, he was only
>>> asking for advice - which is what the forum is about no?
>>>
>>> Let's be nice to each other and let the IR be the nasty ones :)
>>>
>>> Dawn Thomson wrote:
>>>> Accountants ensure your employment status is clear and handle all of
>>>> your tax issues - whether corporation, self-assessment, annual
>>>> accounts, VAT, expense claims etc. and can act on your behalf with IR.
>>>> Investigations can occur, especially where your employment status is
>>>> suspect, and you are trying to diddle IR & HMRCE out of their money.
>>>>
>>>> If you want to check your contract for IR35 compliance, pass it onto an
>>>> employment or contract lawyer and stop asking people on forums !
>>>>
>>>> ----- Original Message -----
>>>> From: "Mike A" [EMAIL REMOVED]
>>>> To: [EMAIL REMOVED]
>>>> Sent: Tuesday, October 30, 2007 9:18 PM
>>>> Subject: Re: FN-FORUM: Ir35 legislation & opting out ?
>>>>
>>>>
>>>>> Dominic's feedback is well worth taking as the safe course.
>>>>>
>>>>> As for those that are in disagreement with my feedback: all I can say
>>>>> is
>>>>> I've handled many tax tribunals for clients - it's all about the
>>>>> evidence.
>>>>> If the evidence is that a person sought and acted upon advice from the
>>>>> Revenue it is hugely unlikely the tribunal will go against them,
>>>>> especially
>>>>> if supported by a lack of intention to defeat the tax system. If that
>>>>> is the
>>>>> end result it is also the basis of advice at the beginning. Dominic's
>>>>> suggestion of acting via an accountant comes with the protection of
>>>>> credibility and professional indemnity.
>>>>>
>>>>> Mike A.
>>>>>
>>>>>
>>>>>
>>>>> ----- Original Message -----
>>>>> From: "Dominic Raywood" [EMAIL REMOVED]
>>>>> To: [EMAIL REMOVED]
>>>>> Sent: Tuesday, October 30, 2007 8:59 PM
>>>>> Subject: Re: FN-FORUM: Ir35 legislation & opting out ?
>>>>>
>>>>>
>>>>>> Well guys; I may be able to offer some first hand experience here. I
>>>>>> have
>>>>>> a ltd company and mainly work with large companies either contracting
>>>>>> direct, or via an agency (spit).
>>>>>>
>>>>>> I don;t know how much you spend running your company currently; but I
>>>>>> pay
>>>>>> an accountant Ł60 a month + vat and they do everything for me -
>>>>>> payroll,
>>>>>> vat returns, PAYE, annual returns, one personal tax return etc. I
>>>>>> also
>>>>>> made the rather excellent decision to join the Professional
>>>>>> Contractors
>>>>>> Group. I joined them when they started up and have not looked back.
>>>>>> I
>>>>>> pay them Ł200+vat per year.
>>>>>>
>>>>>> I recently had an IR35 investigation. The PCG dealt totally with the
>>>>>> Inland Revenue; I didn't have to write, read or speak to them! All
>>>>>> correspondence went directly between them. It ALL stemmed on
>>>>>> contracts
>>>>>> and nothing else - nothing! By ensuring I have IR35 friendly
>>>>>> contracts,
>>>>>> whether working via an agency, or direct; they all passed IR35. They
>>>>>> gave
>>>>>> me a clean bill of health after a very short investigation - which I
>>>>>> believe is quite rare. All I have now to haggle about is expenses
>>>>>> etc.
>>>>>> The other big factor helping me I feel, was the minimal Web Design
>>>>>> work I
>>>>>> get - effectively meaning I have continuous multiple
>>>>>> customers/clients. I
>>>>>> also advertise by way of the website, Yellow Pages ads over the years
>>>>>> etc.
>>>>>> Basically, good contracts and avoiding ANY pointers to hidden
>>>>>> employment
>>>>>> e.g. turn down any free gym memberships, free parties. Try to use a
>>>>>> personal email if they will let you. Don't fill in any holiday
>>>>>> request
>>>>>> forms - just tell them when you will be taking time off. Every
>>>>>> client I
>>>>>> have worked for understands about IR35 and they are all happy to help
>>>>>> to a
>>>>>> degree.
>>>>>>
>>>>>> I don't know how much you currently spend running your business, but
>>>>>> my
>>>>>> 1020+vat a year is it. I have had free banking since I started in
>>>>>> 1996 -
>>>>>> not one charge.
>>>>>>
>>>>>> Think of the costs as insurance. You'll probably be earning around
>>>>>> 100k
>>>>>> if you are contracting. 1% (tax deductible) is a small price. If
>>>>>> you
>>>>>> also register for VAT, that will return some of that Ł1020 anyway. I
>>>>>> use
>>>>>> the fixed price VAT scheme, where I charge 17.5%, but pay something
>>>>>> like
>>>>>> 13.5%? Basically, I can't claim VAT back when I spend, but I retain
>>>>>> the
>>>>>> 4% (or there abouts) on every invoice I raise. My accountant reckons
>>>>>> I
>>>>>> saved well over Ł1000 last year doing this - which has offset the
>>>>>> "costs"
>>>>>> of running my business. Add to that the ability to take a low salary
>>>>>> and
>>>>>> use dividends and the Employer's NI isn;t a big issue either.
>>>>>>
>>>>>> Most accountants will get you an off the shelf company for nothing in
>>>>>> 24hrs.
>>>>>>
>>>>>> You will definitely pay more tax through an umbrella company - I
>>>>>> guarantee
>>>>>> it!
>>>>>>
>>>>>> In summary: If the work is lucrative enough, then the costs will be
>>>>>> far
>>>>>> out-weighed by the earnings. Join the PCG and make sure you use a
>>>>>> contract recommended by them. Leave the contract discussions until
>>>>>> after
>>>>>> you have the contract offer. Then, hold out if the agency gets
>>>>>> funny; I
>>>>>> have found they will ALL move on contracts if they see their 10%-20%
>>>>>> disappearing!
>>>>>>
>>>>>> Yes, running a company is a little hassle, but I don;t think a
>>>>>> limited
>>>>>> comany need be that onerous to be honest; especially if your
>>>>>> accountant
>>>>>> does 95% of the work for you, like mine does.
>>>>>>
>>>>>> If you have any specific questions: bank, accountant etc. feel free
>>>>>> to
>>>>>> contact me directly.
>>>>>>
>>>>>> :)
>>>>>>
>>>>>> Alain Williams wrote:
>>>>>>> On Tue, Oct 30, 2007 at 06:46:29PM -0000, Phillip Healey wrote:
>>>>>>>> I can't see how this is at all true. If it were, then it would
>>>>>>>> effectively
>>>>>>>> rule out any self-employed person from ever doing any work. With
>>>>>>>> actually
>>>>>>>> knowing 100% the facts, I would suggest that this is nothing more
>>>>>>>> than
>>>>>>>> paranoid nonsense from the company you are working with. They
>>>>>>>> obviously
>>>>>>>> think that pushing you into using an umbrella company will rid them
>>>>>>>> of
>>>>>>>> any
>>>>>>>> risks they?ve dreamt up regarding taxation etc.
>>>>>>> If you do a runner and don't pay your tax then the agency could
>>>>>>> be liable to pay your tax. If they contract a Ltd company
>>>>>>> then they don't have the liability. It is a small risk, but
>>>>>>> they won't take it. Most contract agencies are like this.
>>>>>>>
>>>>>>>> Although I could be wrong, which would be very worrying.
>>>>>>>>
>>>>>>>> Regards
>>>>>>>> Phill Healey
>>>>>>>> Munklefish
>>>>>>>> Po Box 70
>>>>>>>> Manchester
>>>>>>>> M34 3SQ
>>>>>>>> T: 0161 408 4759
>>>>>>>> ?
>>>>>>>>
>>>>>>>> -----Original Message-----
>>>>>>>> From: [EMAIL REMOVED] [EMAIL REMOVED] On Behalf Of
>>>>>>>> steve
>>>>>>>> wilson
>>>>>>>> Sent: 30 October 2007 18:28
>>>>>>>> To: FN-FORUM / [EMAIL REMOVED]
>>>>>>>> Subject: FN-FORUM: Ir35 legislation & opting out ?
>>>>>>>>
>>>>>>>>
>>>>>>>> Hi guys,
>>>>>>>>
>>>>>>>> I am currently doing some freelance work via people4business. I am
>>>>>>>> having to go through a umbrella company because of new legislation
>>>>>>>> regarding any unpaid tax will be the responsiblity of the contract
>>>>>>>> agency. So they need to cover themselves by making their sellers go
>>>>>>>> through a umbrella company. This way, I basically pay tax as any
>>>>>>>> normal
>>>>>>>> 9-5 person would.
>>>>>>>>
>>>>>>>> The problem for me is, I have to pay admin costs to use the
>>>>>>>> umbrella
>>>>>>>> company, and also I would like to pay my tax at the end of the year
>>>>>>>> like
>>>>>>>> any normal freelancer.
>>>>>>>>
>>>>>>>> Does anyone know anything of this legislation and if there is a way
>>>>>>>> around it ? Is the agency im using giving me the correct
>>>>>>>> information ?
>>>>>>>>
>>>>>>>> I am told, the only way to get around this is to become a ltd
>>>>>>>> company.
>>>>>>>> But my earnings do not warrant this at the moment..it is a lot of
>>>>>>>> paperwork and quite expensive.
>>>>>>>>
>>>>>>>> Also, is the opting out clause in people4business relating to this
>>>>>>>> ir35
>>>>>>>> legislation ?
>>>>>>>>
>>>>>>>> Any help or info is really appreciated.
>>>>>>>>
>>>>>> --
>>>>>> Dominic Raywood
>>>>>> Rubicon Computer Services Limited
>>>>>> W: http://rubiconcsl.com
>>>>>> E: [EMAIL REMOVED]
>>>>>> T: 08456 521 561 (+44 1823 698420)
>>>>>> F: 08456 521 561
>>>>>> M: 07050 204998 (+44 7811 252573)
>>>>>> Skype: RubiconCSL
>>>>>>
>>>>>> --
>>>>>> Freelancers, contractors earn more with Prosperity4
>>>>>> Call 0870 870 4414 or visit www.prosperity4.com
>>>>>> and benefit from Inland Revenue approved expenses today.
>>>>>>
>>>>>> To advertise here: http://www.freelancers.net/advertising.html
>>>>>>
>>>>>>
>>>>> --
>>>>> Freelancers, contractors earn more with Prosperity4
>>>>> Call 0870 870 4414 or visit www.prosperity4.com
>>>>> and benefit from Inland Revenue approved expenses today.
>>>>>
>>>>> To advertise here: http://www.freelancers.net/advertising.html
>>>>>
>>>>>
>>> --
>>> Dominic Raywood
>>> Rubicon Computer Services Limited
>>> W: http://rubiconcsl.com
>>> E: [EMAIL REMOVED]
>>> T: 08456 521 561 (+44 1823 698420)
>>> F: 08456 521 561
>>> M: 07050 204998 (+44 7811 252573)
>>> Skype: RubiconCSL
>>>
>>> --
>>> Freelancers, contractors earn more with Prosperity4
>>> Call 0870 870 4414 or visit www.prosperity4.com
>>> and benefit from Inland Revenue approved expenses today.
>>>
>>> To advertise here: http://www.freelancers.net/advertising.html
>>>
>>>
>
> --
> Dominic Raywood
> Rubicon Computer Services Limited
> W: http://rubiconcsl.com
> E: [EMAIL REMOVED]
> T: 08456 521 561 (+44 1823 698420)
> F: 08456 521 561
> M: 07050 204998 (+44 7811 252573)
> Skype: RubiconCSL
>
> --
> Freelancers, contractors earn more with Prosperity4
> Call 0870 870 4414 or visit www.prosperity4.com
> and benefit from Inland Revenue approved expenses today.
>
> To advertise here: http://www.freelancers.net/advertising.html
>
>