2 ms·
> The end client should be the one to determine status and shoulder the responsibility if it turns out to be incorrect. I'd say the opposite, the incentives /
by jsty 4y ago
> The end client should be the one to determine status and shoulder the responsibility if it turns out to be incorrect.
I'd say the opposite, the incentives / risk structure are otherwise completely misaligned. If the end client says you're outside IR35 and you should be in, they get whacked for income tax + 2x national insurance (employer and employee contributions). If they say you're inside and you should be outside they only have to pay the employer NI contributions.
That's a recipe for blanket "inside IR35" decisions, which is exactly what happened to the detriment of many genuinely independent contractors.
- gpderetta 4y agoIt would have made sense that if 'employee for tax purpose' also meant 'employee for employment law purpose', so that the declaring someone inside IR35 would have significant consequences for the employer as well.
- Silhouette 4y agoDouble standards are a big part of the problems in this area for sure. Another obvious example from recent times was the COVID support schemes. If you were an owner-operated business that paid out through the usual salary+dividend combination then you would have got far less if you needed to use something like the furlough scheme than if you'd been paying everything out as salary or registered as self-employed. IMHO that's fair enough in itself - if you claim to be operating like a business and treating your income as business profits rather than salary normally then you don't magically get to change your mind to claim a different support scheme. But it's pretty hypocritical for the government/HMRC to then come along the next day and try to interpret the income of that business as if it were all salary and tax it as such to their benefit.