It appears that contractors are getting the better of the Inland Revenue. Does that statement make you nervous?
According to Simon Dolan of SJDAccountancy:
‘Only about 25% of our client base is caught by IR35. The first year it came in I would say that it was more like 45%, so there has been a big drop’.
So who is getting the praise for that – why none other than contractors ‘˜best friends‘ the agents.
According to Simon:
‘I think this has a lot to do with agencies reacting to the situation and realising that contractors wouldn’t put up with employment type contracts. In a lot of ways this really benefits the agency as much as the contractor, as many of the clauses you want to see, from an IR35 point of view, take away rights of the contractor more than the reverse. For example, a decent IR35 pass contract should have, amongst other things, immediate termination, the necessity to correct defective work in the contractors own time, provision of PI insurance, no mutuality of obligation and so on’.
Better or Worse
So is the news going to get better still, or is the Inland Revenue fighting back?
‘Of all the contracts we review now I would say that 90% are IR35 passes which again bodes well for the future of the industry’.
So are SJDAccounting a one-off? It doesn‘t appear to be so. We published an article a couple of weeks ago where ITAccounting said that the number of their contractor clients who were declaring themselves caught by IR35 had halved in the past two years.
Of course a lot of credit must go to the Professional Contractors Group, especially in more recent times, who have raised awareness of the issue, and who have helped both contractors and agents to have an understanding of what would be inside and outside of IR35. Test cases like the Lime-IT Special Commissioners victory have helped that understanding, as has, even, the Stutchbury case defeat in the High Court.
So, do we have IR35 more or less whipped – not according to the article below from an accountancy firm, who believes the opposite to be true.
Make your own mind up!
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