(no title)
scott_w | 2 days ago
This is not classist, you're conflating 2 very different things.
A one-person company who consults for multiple clients, provides their own equipment and sets their own working hours (I have literally worked with people like this) do not fall into IR35. Whether they speak in RP, Cockney, Geordie or Scouse has no bearing on this. How much money they earn has no bearing on whether they fall into the scope of IR35.
> IR35 is not determined by how many clients you have. It is driven by the ownership structure of the company providing the services. The legislation applies where the individual delivering the work has a material interest in that company, typically 5% or more.
This is only part of it. Other criteria include right of substitution, ability to set working hours and location. Clearly a consultancy firm that provides services by multiple workers for multiple clients is very different from an individual who:
- Provides services to one client for 4 years
- Has to (in your own words) sit at the same desk as an employee
- Has to follow set hours
- Has to use equipment provided by the client
- Cannot ask another person to take over their work.
When the facts are different, the rules that are applied are different.
> Those restrictions are designed around companies owned by the worker delivering the service. The same structural suspicion is not applied to firms owned by external shareholders supplying labour in similar conditions.
Because they're two completely different types of contract and working arrangements.
> It is also not accurate to say IR35 has nothing to do with wider labour trends, because tax rules shape how work is structured in practice
I didn't say that they don't. Law and working arrangements obviously feed back into each other, it's the reason IR35 came about in the first place.
> many gig and platform workers are required to set up limited companies, and once labour is channelled into that model, the IR35 framework directly affects them, so drawing a hard line between “tax” and “Uberisation”
They're two different topics that sometimes have overlap, depending on the nature of the working arrangements.
varispeed|2 days ago
You are misunderstanding what IR35 is: the rules bite because the person doing the work has a material interest in the company that contracts to provide it, and then each engagement is assessed in isolation for deemed-employment status; you are conflating that trigger with the status test itself, and “multiple clients / own equipment / flexible hours” is not some automatic escape hatch, nor does the number of clients change the outcome of a given engagement’s assessment.
> This is only part of it. Other criteria include right of substitution, ability to set working hours and location. Clearly a consultancy firm that provides services by multiple workers for multiple clients is very different from an individual who:
Large consultancies routinely embed the same named individuals at the same client for years, on client kit, during client hours, with no practical substitution, and no one performs a hypothetical employment test on the firm itself. The difference is not the day-to-day reality of the work, which can be identical. The difference is that IR35 is only activated when the company supplying the labour is owned by the person doing the labour. That asymmetry is deliberate.
> Because they're two completely different types of contract and working arrangements.
They are not “completely different” in substance. You can have the same embedded role, same hours, same client equipment, same multi-year engagement. The decisive difference is ownership of the supplying company. The regime is constructed so that when the worker owns the company, a deemed-employment test is imposed; when external shareholders own it, it is not.
scott_w|2 days ago
I never said the escape hatch was automatic. The number of questions in the HMRC questionnaire make it clear that there's no 1 trigger either way.
> Large consultancies routinely embed the same named individuals at the same client for years, on client kit, during client hours, with no practical substitution, and no one performs a hypothetical employment test on the firm itself.
Because both the contract and working arrangements are different. The consultancy absolutely can substitute one worker with another of equivalent qualifications.
> The difference is that IR35 is only activated when the company supplying the labour is owned by the person doing the labour. That asymmetry is deliberate.
It's deliberate because the nature of the working and contractual relationship is different. I really don't get what's so difficult about this so let me break it down.
In an IR35 in-scope arrangement, the one-person limited company would otherwise pay themselves up to the income tax exemption threshold. They would then take a dividend for the rest of the payment, which isn't subject to NI payments, reducing revenue intake to the government.
In a large consultancy that's contracting staff to work at companies, there are two clear relationships that are different:
1. The contract with the client, where a fee is paid to the consultancy for the work of their employees.
2. The employment contract with the person embedded in the client. This person is paid their salary and, as such already pay income tax and NI.
Can you see how it makes no sense for the consulting company to pay extra tax and NI for the contract with the client?
If you can't understand the difference, and insist that it's based on some class warfare, I really don't think any human on earth has the words to convince you of something so simple, my accountant explained it to me in about 2 minutes when I first asked him about IR35.