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Posted By Frank Hallett
Good morning to all you happy independants slaving away this morning - and also to those clients who may find themselves being considered by the IR as a technical employer. I found the following item on the yahoo news pages and as an individual who has been attacked by the IR under IR35 in the past I feel sufficiently strongly about it to put it on this site.
I would welcome all comments - but would especially like to know exactly what IOSH as a body might think officially. Trouble is, I'm not sure that IOSH as a body actually recognises the levels of self-employed safety professionals that there are within IOSH.
Extract from article - "IR35 is an excellent example of how government attempts to fixes tax loopholes can have unintended consequences, say the Lib Dems in their consultation policy. Contractors have one month to tell the party how the fixes can be made less taxing.
Contractors will have a chance during October to influence Liberal Democrat policy on the IR35 tax regulation, as the party launches a review of their taxation policies.
In a consultation paper, the party singled out IR35 as a case where attempts to tackle tax avoidance or evasion can have adverse consequences. "[Governments] try to close loopholes and this has unintended side effects — the IR35 controversy is an excellent example," states the paper. The public is invited to comment before 31 October, and the party plans to present the final policy at the Liberal Democrat 2006 conference."
Frank Hallett
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Posted By Frank Hallett
PS - I'm not necessarily a Lib-Dem supporter; that isn't a legitimate topic for this Forum so please don't raise the politics card - it just so happens that the LIib-Dems have publicly requested responses!
However, any organisation that wishes to address the way in which IR35 is really applied will get my attention.
Frank Hallett
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Posted By John Watson
The crux to IR35 as I understood it (and I stand happy to be corrected) was that if you did al or most of your work for one client then to all intents and purposes you were employed by them, and thus caught by the IR35 net. For most self employed safety professionals who are likely to have several, if not dozens of clients and sub contract delivery arrangements, you should be outside of its remit.
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Posted By Dave Daniel
I've been watching this for some years - When it was first proposed it was so draconian I seriously considered packing in being self-employed. Fortunately it has now had its bigger teeth pulled, but if you work on say a short term full-time contract which starts to look like "employment" then you do run a risk. It is essential you structure your contract to emphasise the "non-employment" features - using your own equipment, right to substitute another consultant, no holidays or sick pay etc. Working on a fixed price contract helps. You still face the risk of Gordon's greedy minions trying to make out you fall in the trap because Gordon needs the money since he let Prudence loose on a spending spree...
The latest snare is "Section 660" where the IR have redefined old law (in their mind) to claim that the earnings and dividends your wife takes as a partner (many Ltd Co's are husband & wife) are really a gift and taxable as YOUR income at 40%. The Artic Systems case is still in the courts and has most of the small business world in jitters.
See http://www.shout99.com/c.../showarticle.pl?id=35199
I don't think IOSH has any idea all this has been going on for the past 5 years.....
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Posted By Dave Daniel
PS - It's worth pointing out that IR35 was the subject of enormous effort by the IR to redefine IT consultants and others (which eventually spread to a very wide net) as employees, and tax them more than even an ordinary employee would pay. The IR tried to make taxation a principle of morals claiming they just wanted people to pay the "right" amount of tax, and implied that efficient tax management was immoral.
A number of high-profile pressure groups rapidly formed and were highly effective in mounting a blocking action.
The IR have never been prepared to release figures on how much is netted by IR35, even in the face of parlimentary questions. Most observers believe that it is a pittance prepared to the cost of the effort expended.
Any independant consultant ignores such efforts at their peril. Artic Systems found themselves with a bill for £40K in back taxes, having followed exactly the advice their accountant gave them and the custom and practice of the day.
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Posted By Frank Hallett
Dear all, there has been a duplicate message in the closed forum that attracted as much attention as this one.
However, I now know that there is a "Consultants SG" and that IOSH is a professional body but not a body for the representation of professionals. Boy, have I been mistaken.
Frank Hallett
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