Thanks Bas, saw your post, but it's all in hand. I have an excellent accountant.

Re: the 'speculative threats' the IR are making, it definitely works. I know of at least 4 people who decided to just admit to being caught by IR35, thereby paying up a load of NI potentially needlessly.

12 months later they were all bemoaning the fact that they should have at least given it a good try, as even if they'd claimed to be outside IR35 but had subsequently been caught inside it, they'd have just had to cough up the difference, so would have been no worse off. The IR, of course, cannot penalise or prosecute people for 'misunderstanding' the law until there is legal precedence, which so far there isn't. So the very worst that can happen is you just pay the extra tax/NI later on....

 

TK: Maybe I can "borrow" some of that which they aren't going to get then? eh? mmm?

 

See your point MarkO but it's a lot more hassle sorting out the problem a few years down the line (interest, accountants fees etc) and, if it your obviously caught by IR35 you can be hit for penalties for negligent returns aswell.

Saying that though, most of our clients have continued as before but they have revised there contracts to make them IR35 friendly.

We did have a couple who admitted defeat and went permie and just the one who is actually taking the hit under IR35.

Bas

 

That's the whole point, though, at the moment you can't. Until there is a legal precedent, then the law is not deemed to be clear, in which case it is open to misunderstanding or misinterpretation, and therefore you can't be penalised for failing to understand the legislation - that's why precedents are so important. So until a legal precedent has been set (which it probably will be soon, but hasn't yet) if you use the defence "Well, that's how I understood the law to work - there was nothing to say it was otherwise" then the worst they can do is make you pay what you owe (without interest or penalty). It's a gamble, but a worthwhile one.
Yeah, anyone who carried on with the same contract was daft. But the people I'm referring to worked for the same client as me, and the client was very relaxed (to the point of being helpful) about putting together an IR35-friendly contract. Yet instead of taking advantage of that, they just rolled over and said "Yeah, I'm caught by IR35". Of course 18 months down the line, when it's still as clear as ditch-water, and there's still no clues as to whether the IR will really 'get away' with IR35, they're feeling a bit foolish...