Sound business advice could have saved IR35 contractor thousands

Contractor Tax Protection
Tax Liability Cover (TLC35) and
IR35 insurance from Qdos Consulting

Sound business advice could have saved IR35 contractor thousands

Posted Jan 22, 2008

An IT Contractor, who was found to be liable for £27,000 in IR35 taxes, could have avoided such a fate if he had sought "sound business advice and professional support", according to the Professional Contractors Group.

The statement follows on the MKM Computing Ltd case which was heard by the Special Commissioners, as reported by Contractor UK last week.

Following MKM Computing Ltd's loss at the IR35 appeal, Kate Cottrell, a former inspector for HMRC, told Contractor UK:

"This case once again highlights the need to review contracts and working arrangements."

"From the clauses quoted in the judgment the lower contract in this case would fail the IR35 tests and the working arrangements appear to support the same conclusion."

The PCG is a source of expert and practical advice for contractors and freelancers and was originally set up to help its members cope with the implications of IR35 and other tax legislation affecting them.

All content ©Contract Eye Ltd. Protected by Copyscape. Please scroll down for related articles.

Contractor Services

Professional Indemnity Insurance - Essential cover from Hiscox
The fair umbrella company - take home more pay with paraplus
InTouch Contractor Accounting - specialist online service & great advice
Parasol - the UK's favourite umbrella company
Contract Experts - ClearSky Accounting on 08000 325 326
Helix Management Ltd - Up to 90% retention. Same day payments.
Umbrella Company - 12,000 contractors can't be wrong!
Together we're stronger! - Join PCG, representing contractors
Cloud 9 Group - Umbrella Solutions only £27.50 per week
Qdos - IR35 experts - Providers of low cost contractor insurance
K & B Accountancy Group - Fixed fee contractor accounting only £75pm
Free IR35 & Tax Review - Call ICS on 0800 195 3750
Contractor Mortgages - the best deals, based on your contract rate alone!

Would student loan boss have been caught by IR35?
Following news that the Student Loans Company boss has been receiving remuneration via his own personal services company, we ask whether this would this have made him a classic target for an IR35 investigation.

Does IR35 apply to sole traders?
Although the Intermediaries Legislation was created to target alleged disguised employment by limited company directors, how are sole traders affected by IR35?

Tax Tribunal hearing deems contractor to be part-caught by IR35
John Spencer, a retired IT specialist, experienced mixed emotions at a recent First Tier Tax Tribunal hearing, where a long-term engagement was deemed to be only partially subject to the IR35 rules.

IR35 Forum - HMRC proposals to target higher risk IR35 targets
The latest IR35 Forum minutes show that advances have been made over how HMRC proposes to more accurately identify IR35 targets in the future.

IR35 raises millions each year from self-certifying contractors
A new Freedom of Information Request reveals that significant sums of tax have been raised from contractors who self certify themselves as being caught by IR35.

Fewer HMRC IR35 status enquiries, but tax yield per case soars
HMRC has released further data showing that the number of IR35 status enquiries has dropped dramatically since the early 2000's, but the tax raised per enquiry in more recent years has increased greatly.

IR35 Forum - HMRC seeks further industry help in improving IR35 administration
The latest IR35 Forum minutes show that HMRC is seeking further feedback from industry stakeholders to help improve the way IR35 is currently administered.

IR35: is it possible to balance the interests of contractors and HMRC?
Marc Morris from 1st Option looks at HMRC's conflict between maximising its tax yield, and encouraging the development of a flexible workforce in the UK.

Startling drop in tax yield from IR35 status enquiries
Data released by HMRC shows that the number of IR35 status reviews has shrunk massively in recent years, as has the amount of tax yielded as a result of such enquiries.

Lib Dem policy paper calls for IR35 to be suspended
A new Liberal Democrat IT policy paper, to be debated at the forthcoming party conference, has called for IR35 to be suspended.

Forum discusses IR35 helpline and HMRC compliance measures
The minutes of the second IR35 Forum meeting have been published, and covered areas such as the IR35 helpline, and how HMRC's compliance units intend to operate in the future.

Supreme Court confirms Autoclenz ruling over sham employment contracts
The UK Supreme Court has upheld an earlier ruling by the Court of Appeal that contract wording cannot determine the employment status of workers, if it doesn't reflect the reality of the working arrangements.

HMRC targeting under further scrutiny following Primary Path Ltd IR35 victory
A tax tribunal has found another contractor to be in business on his own account following an eight year IR35 challenge by HMRC.

HMRC suffers another IR35 defeat - engineering contractor not an employee
In an IR35 defeat for HMRC, a tax tribunal failed to find any evidence that a contract of employment existed between an engineering contractor and his client.

Why was IR35 introduced in the first place?
We look at why the Intermediaries Legislation was created, who it is aimed at, and the problems that complying with IR35 has caused contractors since 2000.