Contractor Passes IR35 Employment Status Test
A contractor passes IR35 employment status test – only to be told her contract job is inside IR35.
According to a contractor, after one of our articles “I completed the tool, as did the agency and 3 members of the Client.
“We were all outside IR35.
“So, the client decided to get advice from Delloitte who advised them to deem the assignment in despite the tool outcome.
“They said that is just in case things change in a few years and there may be a comeback.
“Needless to say I’m now seeking a new contract.”
IT Contractor Comment
This is getting ridiculous!
This may have cost this contractor, and others, around £15,000 a year.
They will now be forced to either pay the IR35 tax or join an umbrella company.
They will have to close their limited companies on what is merely a whim.
The department, with their advice from Deloitte, are just covering their own backsides.
Legally Outside IR35 but Job Deemed Inside
The Government are creating a climate of fear so that contractors who are legally outside IR35 are having to pay the IR35 tax.
That’s like someone having to pay Inheritance Tax when they are not even dead.
Maybe if they are seriously ill Deloitte could ‘deem’ them to be dead.
Government Attacks on IT Contractors
This Government is just getting worse and worse in its attacks on contractors.
They are deliberately creating this climate of fear in their own departments to obtain tax from contractors that contractors don’t legally owe them.
It’s legalised theft.
One would like to see how this would play out in the courts.
Where’s contractors representatives IPSE when you need them?
Deloitte do have a serious point, though.
HMRC Tweaking the IR35 Test
HMRC are tweaking the test all the time.
One could probably guess in which direction.
So, someone at a Government department could be outside IR35 currently, according to the IR35 Employment Status test, but inside next week.
I hope they are keeping a good Change Control System.
Contractor Deemed Outside IR35
There could come the ridiculous situation where a contractor is deemed outside IR35 when he joins the public sector department.
He continues working there using a personal service company for two years.
However, a week after he joined, unknown to him, HMRC did a major tweak of the questions and rules.
The contractor would then have been operating as if he was outside IR35 for nearly two years when he was really inside.
IR35 Employment Status Test Industry
IR35 has been like this since the beginning.
A whole industry has grown up trying to decipher it.
This Conservative government seem even worse than Tony Blair’s New Labour which brought in IR35 in 1999.
And then HMRC are planning to roll out this IR35 Employment Status Test in the private sector in a year’s time.
God help us!
So, a contractor passes IR35 Employment Status Test but now has to pay the IR35 tax.
You couldn’t make it up!
If you know anyone else who would find this article useful, please share it with them using the social media buttons at the top and bottom of the page.
Ad – Contractor Services
If you think you can benefit from using an umbrella company, try the following:-
Public Sector Umbrella Company
Or do you need some professional advice on which umbrella company is right for you? Fill out the form below to receive expert advice.
For all necessary business insurance, including IR35, try Business Insurance for Contractors
