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Personally, I find the "tax dodger" talk to be unhelpful. When I was contracting HMRC would not give me a hard list of rules to follow even if I wanted to. Fo

by Lio 2y ago

Personally, I find the "tax dodger" talk to be unhelpful. When I was contracting HMRC would not give me a hard list of rules to follow even if I wanted to. For example if you deliver some piece of code and the customer asks you to provide support for it, is that inside or outside? The initial software is a deliverable and so within your control. Support though is usually based on time and issues that the customer brings to you. That could be said to be out of your control. So is the contract inside or outside? You and your accountant can only guess. That wizard you mention only gives guidance, it does not provide a legal answer. Plus HMRC can and do retrospectively change the rules to reopen accounts years after they were originally accepted. There's no finality there and the longer you run your business the bigger risk. At the time I couldn't find a suitable insurance service to cover that risk. I believe there are now finally IR35 cover products but it worried me enough that I just closed my contracting business down. I can only assume that as HMRC were happy with that winding down that I was not a "tax dodger" all along.

mattbee 2y ago
The first page of the wizard says "HMRC will stand by the result you get from this tool." You can reference any check you make with, assuming you answer honestly. I think it's fair to challenge the "tax dodger" brush if a lot of people are suddenly made "tax dodgers" unfairly. But you've got to read the room. Personal Service Companies were a scandal that were legislated against. If you want to carry on doing certain kinds of work and not _think_ about tax, just pay tax as a Sole Trader, forget about the rest of the rules. If you want to try to hang on to tax advantages (that have been all-but-eroded), feel free but if you want to earn big money and optimise your tax accordingly, yes, you do have to keep up with rule changes, or maybe pay the price later. But I'd say IR35 isn't relevant to the average worker any more.
jt2190 2y ago
> Support though is usually based on time and issues that the customer brings to you. You’ve just identified a risk to your contracting business: Under these (unclear) terms the customer can dictate an infinite amount of support hours for a fixed price. As a business owner you need to protect your profitability by ensuring that there are clear terms putting controls and limits in place.

by Lio 2y ago

mattbee 2y ago

The first page of the wizard says "HMRC will stand by the result you get from this tool." You can reference any check you make with, assuming you answer honestly. I think it's fair to challenge the "tax dodger" brush if a lot of people are suddenly made "tax dodgers" unfairly. But you've got to read the room. Personal Service Companies were a scandal that were legislated against. If you want to carry on doing certain kinds of work and not _think_ about tax, just pay tax as a Sole Trader, forget about the rest of the rules. If you want to try to hang on to tax advantages (that have been all-but-eroded), feel free but if you want to earn big money and optimise your tax accordingly, yes, you do have to keep up with rule changes, or maybe pay the price later. But I'd say IR35 isn't relevant to the average worker any more.

jt2190 2y ago

> Support though is usually based on time and issues that the customer brings to you. You’ve just identified a risk to your contracting business: Under these (unclear) terms the customer can dictate an infinite amount of support hours for a fixed price. As a business owner you need to protect your profitability by ensuring that there are clear terms putting controls and limits in place.