Life, the universe and whatever

More clues on IR35

I read this really interesting article about IR35 on the Contractor UK site recently and it evoked more thought.  The article serves to enforce my belief that nobody is able to definitively judge an individual’s position in relation to IR35 when they operate in a freelance role out of a limited company as I wrote about in a previous post.  However, the article suggests to me that HMRC attempt to discern the general attitude of the freelancer through certain operational behaviours to assess their chance of a “successful investigation”.  The quote that says it all to me is;

A HMRC spokesman responded: “Any individual who provides his/her services through a service company to an end client potentially falls within IR35.”

Clearly the HMRC take exception to how individuals like myself position ourselves to pay tax.  I strongly believe the whole tax system needs to be strongly and vigorously policed however, it is clear to me that what is required here is clear and sensible legislation not a government department with a chip on it’s shoulder.  Then I read something like this about how Barclays are allegedly dodging £1bn every year and it’s difficult not to get angry.

UK contracting and the ever mobile IR35 goalposts

Since going out on my own as an independent in the UK, the single biggest concern has always been the IR35 law.  This is our government’s attempt to make people like myself pay tax on our income in exactly the same way as a permanent employee would.  I’m not going to stand on my soapbox (well maybe just a little) and I don’t have the inclination to debate the moral or legal arguments around IR35.  It is clear that nobody, legally trained or otherwise, is able to definitively determine when an independent is (or is not) operating outside of IR35.  However, I noticed this article recently published on the Contractor UK website that certainly helped to reassure me.

Personally, I have never been interested in the ‘security’ of a longer term contract as one of the many reasons I left permanent employment was to get away from the monotony of spending Monday to Friday, 9 to 5  doing the same work with the same people staring at the same 4 walls.  I have therefore tended to gravitate to work and contracts that are project based but, especially when applying for work through agencies, it is not until you are actually doing the work that you get the full picture of what is required of you.

*** What follows is pure opinion and a self gratifying rant ***

The bottom line for me is that I am more than happy to contribute a fair rate of tax and pay my way, even though the UK government seems preoccupied with using it to drop bombs and bail out greedy bankers.  Tony Blair, Gordon Brown and Alistair Darling have proven to be three of the most ineffective individuals this country could have had guiding it into and through a global recession and have left us far worse off than we need to have been.  That just irritates me all the more when I work in excess of 5 days a week and feel like I’m seen as a wanton tax dodger.