1 - Send your contract to the Revenue for approval
We say 'no' - don't do it! This sends a signal of weakness to the Revenue and is a great big red arrow saying
'please investigate!' Also the Revenue are not always impartial on financial matters so don't necessarily expect complete objectivity.
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2 - The best advisor on IR35 is an employment lawyer
Maybe, maybe not - but anyone offering advice on handling IR35
and defending your case against the Revenue should really have
in depth practical experience of dealing with the Revenue and
taking contentious tax status appeals to the Commissioners.
Some advisors lack this important experience. Accountax is staffed
by former Revenue Inspectors - see
Meet the Team.
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3 - A 'substitution clause' by itself will not save your skin
Oh yes it will, but the substitution clause must be unfettered and genuine. If such a clause is there then as a matter of law the worker cannot be an employee. This was confirmed in the Court of Appeal decision Express Echo Publications v Tanton 1999.
The Employment Appeal Tribunal of June 2000 case of Glasgow City Council
v Skivington & McFarlane further underlined the need for the
intermediary to have the right to provide a substitute when unable or
unwilling to undertake the work, choose the substitute itself and pay
the substitute itself. |
4 - The Agency/plc end user contract is relevant to IR35
Our view is that it is not. The contractor at the bottom of the chain is not a party to such a contract and cannot be bound by it. Furthermore, the Finance Bill 2000 makes it clear that the contractual arrangements to consider are only those entered into by the personal service business. As the personal service business signs a contract with the Agency, that is the contract we have to
scrutinise.
DTI regulation 29 (Regn 29) means contracts
between agency and its clients need not be kept for more than 12 months
- therefore the contracts the Revenue are keen to drag into the equation
may not be available anyway. |
5 - No advisors will put their heads on the block
Accountax will! We'll tell you whether your existing contract will pass or fail IR35 and why. We also supply watertight IR35 proof contracts. Our review process is inexpensive and
quick - for details of our Contract Review service, click here.
We also offer the
For details - click here.
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6 - IR35 only affects limited companies
No - any personal service business is potentially at risk of IR35 including partnerships and sole traders.
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7 - The Revenue have the last word
No - there is an independent tax tribunal (the Commissioners), who decide the matter on a 'balance of probabilities'. There is a further right of appeal to the High Court on a point of law.
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8 - The Revenue have approved certain IR35 contracts
Yes they have, including the Accountax IR35 Contract but be careful. Individual contracts have been approved in individual circumstances - the Revenue have not given 'blanket' approval to any 'product', nor will they.
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9 - The IR35 tax rules are the same as the NIC rules
No they are not - there are some differences in the detail which helps introduce some clever technical arguments if your advisor is up to speed.
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10 - The 'intention' to have self-employment is irrelevant
No - even the Revenue concede in their internal manuals (has your advisor got them? Accountax has) that the intention of the parties should always be taken into account, not just in ambiguous cases. Indeed, the Express Echo Case of 1999 said that when examining status you should start with the common intention of the parties. |
