IR35 Revolt Grows – Contractor Gets Blanket Ban Email and Resigns

IR35 Revolt Grows as Contractors Disbelieve HMRC
IR35 Revolt Grows as Contractors Disbelieve HMRC

IR35 Revolt Grows

The IR35 revolt grows. More and more contractors are refusing to accept being moved over to PAYE. Yesterday all the contractors at one company got news that all of the future contracts at the company would be inside IR35.

All those contractors who are currently using personal services companies would have to go PAYE or resign.

And that’s what one contractor did on the spot. He resigned immediately. He told the management that he would not be going to the site for a project meeting as his resignation was immediate.

Contractor Questions on IR35 Revolt

  1. Why did one contractor resign immediately after the blanket ban on PSC contractors?
  2. What’s the name of the company who issued a blanket ban?
  3. Why are so many contractors refusing to switch to PAYE?
  4. And why did HMRC fine the NHS?
  5. Why do contractors not believe any HMRC promises on IR35?
  6. Is the contractor IR35 revolt growing?

Why did one contractor resign immediately after the blanket ban on PSC contractors

He said that his reason for resigning was because he believed that HMRC could now come after him for back tax as the company are now describing the job he is doing as inside IR35.

It stands to reason HMRC would believe that it was always inside IR35. He didn’t trust HMRC’s assurances that they would not do this.

Then he told the management that he was about to clear his desk. He told them his contract was now void. The company then had him escorted off the site.

It seems that payments to him have been withheld. That’ll be fantastic for the morale of the other contractors who have just received their blanket ban emails. Others are expected to follow suit.

What’s the name of the company who issued a blanket ban

I have the name of the company but have decided not to use it as I got the information from someone else other than the guy involved. I have also decided to remove further clues that might give away his identity like the position he held. I’ve just called him a contractor.

Why are so many contractors refusing to switch to PAYE

One of the main reasons given by contractors for not changing over to PAYE contracts is their lack of trust in assurances made by HMRC to contractors.

HMRC said they did not intend chasing contractors for back tax if thy have now been found inside IR35. They said they wanted to focus on getting future PAYE tax in from them.

There was one proviso or get out – there always is with HMRC. That is that there was nothing illegal or criminal going on.

Do they mean like tax evasion?

And why did HMRC fine the NHS

We have the example in the public sector where HMRC promised organizations that if they put their contractors through their CEST IR35 test and they tested outside IR35 that HMRC would not come after them for the contractors’ back tax even if it was subsequently found that the contractors were really inside IR35.

There was one proviso. The correct data must be put in. So, the NHS followed this promise and tested all of their contractors with HMRC’s CEST test. Some tested inside IR35. However, others tested outside IR35 and were allowed to continue to operate via their personal services companies.

However, HMRC have now fined the NHS £4.3 million for the misuse of the CEST tool.

This may have been to encourage the others, i.e. those companies in the private sector taking decisions as to what to do about IR35.

Why do contractors not believe any HMRC promises on IR35

However, it also made contractors believe that any promise that HMRC made was worthless when they have such a proviso.

They haven’t even said definitively that they would not chase contractors, They just said that wasn’t their intention and that their focus was in getting the new PAYE money in from contractors.

However, their intentions and their focus might change. It certainly changed for the NHS. Who would take money off the NHS anyway? Answer – David Cameron, George Osborne, Theresa May and Philip Hammond. But that is a by-the-by.

Is the contractor IR35 revolt growing

There are more and more signs across the country that contractors are not taking his lying down. The IR35 revolt is growing.

And one major main reason for contractors not acquiescing and taking an inside IR35 contract is that they believe this will open them up to a HMRC retrospective tax investigation.

From info I am getting, and have not yet published, I believe that a huge powder keg of contractor discontent is ready to burst.

I also believe that companies did not expect the scale of the contractor IR35 revolt.

Internal recruitment are now reporting these problems to board level. Then we will see how it goes from here. However, this powder keg is ready to blow – and blow big time.

Could contractors come out on top?

They just might this time!

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