GlaxoSmithKline Contractors IR35 Shock
HMRC has sent a letter out saying that GlaxoSmithKline Contractors IR35 status is inside IR35. They sent out the letter to almost 1,500 of the GlaxoSmithKline contractors. These include the firms IT and biomedical contractors.
The letter said “We’re writing to you because you told us you were self-employed when you worked for and received payments through, your own company.
“Whether a worker is employed or self-employed for tax purposes is not a matter of choice. Instead, you need to look at the facts of the working relationship between you and GSK.”
GlaxoSmithKline Contractors IR35 Short Notice Appeal Period
The letter then goes on to say that if they accepted that they were inside IR35 they should calculate their employee tax and National Insurance for the 2018 / 2019 tax year and make the payments by September 22nd.
If they disputed his assessment they had to provide proof that they are not caught by IR35 by September 19th. So, in other words all 1,500 GlaxoSmithKline contractors are assumed to be caught by IR35 – unless they can prove otherwise.
That is the opposite of natural justice where you are presumed innocent until you are found guilty.
HMRC say that they sent the letters because they had evidence that GlaxoSmithKline contractors were pretending to be outside IR35 when they are really inside it. They are mis-categorising their IR35 status according to HMRC. They are ‘disguised employees’.
GSK are telling their contractors to contact their tax advisors.
GlaxoSmithKline Contractors IR35 Status is Wrong Say HMRC
HMRC say “Our role is to make sure that everyone pays the tax that is due and it’s only fair that two people doing the same work should broadly pay the same tax and National Insurance.”
You can see the influence of Theresa May and Phillip Hammond here. They both said that “It is an unfair anomaly that a self employed person earning £100,000 a year pays less tax than a permanent employee earning the same amount”.
Influence of Big Consultancies Over IR35
Of course, this is not comparing like with like. We can also see the hand of the big consultancies who advise the Government. They have always seen contractors as rivals.
It is an even more unfair anomaly that they can charge fairly recent graduates out to companies at double to treble what a contractor costs a company.
However, they have to get rid of the contracting profession before they can take full advantage. They are well on their way to doing this with the help of last Prime Minister and Chancellor.
Will Boris Johnson and Sajid Javid be any different?
HMRC have told companies that they must make individual assessments of contractors’ IR35 status and not a blanket one. However, this is exactly what HMTC are doing with GSK’s contractors. They are a law unto themselves.
One expects that this will just be the first of many raids on contractors prior to April 2020. It’s open season on contractors now.
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
When the IR35 changes were implemented in the public sector, rather than just pay the IR35 tax, most contractors inside IR35 decided to take the umbrella company route. If you are inside IR35, or caught by a blanket ban on Limited Company contractors, it would be worthwhile looking at an umbrella company. Just fill out the form below and someone will be in touch.
If you think you can benefit from using an umbrella company, try the following:-
Do you need some professional advice on which umbrella company is right for you? Do you want to get better returns from your Umbrella Company? Fill out the form below to receive expert advice.
For all necessary business insurance, including IR35, try Business Insurance for Contractors