IR35, full time work, and the tax man…

[SussexHarry]

Hi all,

 

I’m sure this topic has been beaten to death, however I’m having some issues working things out.

 

Essentially I am looking to move into full-time employment in Arb and have been looking at employment opportunities again. When I was last exploring this earlier in the year I was offered two full-time jobs (which I incidentally turned down for personal reasons at the time).

 

One of these positions was PAYE, with a large company. All above board.

 

The other was also full-time - show up at the yard at 7, wear the company hoodie, do what boss says needs doing that day and then come back to the yard to do whatever needed doing there. 5 days a week… except this person wanted to pay me as a “contractor” - as in I invoice him for the money owed, and then it’s up to me to sort out tax, expenses, holiday, sick pay, etc.

 

As I understand it under IR35, that second scenario is not lawful and, should HMRC come knocking, land both myself and the prospective employer in some trouble.

 

My issue is that now I’ve started to look for full-time tree work it seems most local arb companies are operating in a similar fashion. Full time work, kit provided by the company, boss on-site, except no-one is on PAYE! 
 

Am I missing something, or is everyone just winging it and hoping HMRC don’t come knocking?

Edited September 23 by SussexHarry

[topchippyles]

2 minutes ago, SussexHarry said:

Hi all,

 

I’m sure this topic has been beaten to death, however I’m having some issues working things out.

 

Essentially I am looking to move into full-time employment in Arb and have been looking at employment opportunities. As a result, earlier in the year I was offered two full-time jobs (which I incidentally turned down for personal reasons at the time).

 

One of these positions was PAYE, with a large company. All above board.

 

The other was also full-time - show up at the yard at 7, wear the company hoodie, do what boss says needs doing that day and then come back to the yard to do whatever needed doing there. 5 days a week… except this person wanted to pay me as a “contractor” - as in I invoice him for the money owed, and then it’s up to me to sort out tax, expenses, holiday, sick pay, etc.

 

As I understand it under IR35, that second scenario is not lawful and, should HMRC come knocking, land both myself and the prospective employer in some trouble.

 

My issue is that now I’ve started to look for full-time tree work it seems most local arb companies are operating in a similar fashion. Full time work, kit provided by the company, boss on-site, except no-one is on PAYE! 
 

Am I missing something, or is everyone just winging it and hoping HMRC don’t come knocking?

You would have to register as self employed 

[SussexHarry]

9 minutes ago, topchippyles said:

You would have to register as self employed 

I get this - however as I understand it, if I am working for the same company and operating in a similar manner to an “employee”, when I would actually need to be on the books. By claiming to be self-employed, I’m creating a tax liability for the company due to IR35.

 

It’s my understanding that you simply can’t be self-employed and working for the same company full-time - especially if you’re using their tools, branded clothing, and calling the boss “boss”.

Edited September 23 by SussexHarry

[topchippyles]

13 minutes ago, SussexHarry said:

I get this - however as I understand it, if I am working for the same company and operating in a similar manner to an “employee”, when I would actually need to be on the books. By claiming to be self-employed, I’m creating a tax liability for the company due to IR35.

 

It’s my understanding that you simply can’t be self-employed and working for the same company full-time - especially if you’re using their tools, branded clothing, and calling the boss “boss”.

They get around this by laying you off for a few days here and there. Simple solution is to find employment on the books.

[GarethM]

I think the tax liability is on you, they weren't going after the BBC for Gary or itv for Lorraine.

 

If it sounds dodgy go elsewhere.

Edited September 23 by GarethM

[SussexHarry]

5 minutes ago, GarethM said:

I think the tax liability is on you, they weren't going after the BBC for Gary or itv for Lorraine.

 

If it sounds dodgy go elsewhere.

I seem to recall reading that part of IR35 is that it’s now the employer’s responsibility to work out whether a contractor is inside/outside IR35, and any NI/income tax due because a contractor is actually an employee is owed by the employer.

[GarethM]

Personally, just steer well clear!.

There are two people in life to avoid annoying, taxman & HR.

 

Everyone else can be reasonable or reasoned with 🙂.

 

You don't get a kings ransom for doing nothing in return.

Edited September 23 by GarethM

[SussexHarry]

2 minutes ago, GarethM said:

Personally, just steer well clear!.

 

You don't get a kings ransom for doing nothing in return.

Yeah, I don’t plan on working full-time for a company unless it’s PAYE. If I had my own truck, saws, climbing gear, and worked for a few different companies then fair enough. But dragging brash and climbing for one company full-time as a “contractor” seems like a great way to get bent over by the tax man.

 

Just seems strange that most companies around me are doing this. I can only assume they’re all just dodging employer’s responsibilities and tax just to save a few bob.

[topchippyles]

4 minutes ago, SussexHarry said:

Yeah, I don’t plan on working full-time for a company unless it’s PAYE. If I had my own truck, saws, climbing gear, and worked for a few different companies then fair enough. But dragging brash and climbing for one company full-time as a “contractor” seems like a great way to get bent over by the tax man.

 

Just seems strange that most companies around me are doing this. I can only assume they’re all just dodging employer’s responsibilities and tax just to save a few bob.

Self employment has its benefits. 

[Dan Maynard]

22 minutes ago, SussexHarry said:

I seem to recall reading that part of IR35 is that it’s now the employer’s responsibility to work out whether a contractor is inside/outside IR35, and any NI/income tax due because a contractor is actually an employee is owed by the employer.

This change applied to bigger employers, and public sector, not small private sector employers.

 

You can use this tool to get a determination of whether you are an employee under IR35, it sounds to me like you would be exactly in the category they wanted to clamp down on. Its not absolutely closed though, I do regular contract work in firms van wearing their uniform, but using my tools and PPE and i work for myself too, this is outside IR35.

Check employment status for tax - GOV.UK

WWW.GOV.UK

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Use the Check Employment Status for Tax (CEST) tool to find out if you, or a worker on a specific...

 

Other thing to bear in mind, it's easy to underestimate the benefits of PAYE, eg sick and holiday pay, pay while training, pay when work goes quiet or jobs overrun, etc etc.