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I note such comments as 99 per cent of cases are being won. That statistic only applies to those specialists such as Qdos who have the expertise to defend a status enquiry. What is not published is the number of contractors who have decided to tick box six on their P35s and pay over the tax.
A conservative estimate is that 75 per cent of contractors have taken the decision to pay up which means HMRC’s policy is working and that a one per cent success rate in challenging contractors is an acceptable loss given the deterrent that exists.
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It has often been said that IR35 is a voluntary tax, I recollect saying this myself in the past but now I am not so sure. To run your own business you need to ‘walk the walk’ and ‘talk the talk’, being in business is a state of mind. You need to ensure contracts are compliant and more importantly ensure the upper level contracts mirror your contract with the agency.
Recent tax cases act as a useful reminder and agencies must take responsibility for this otherwise it is only a matter of time before someone takes them to court. Your method of operation is equally important as well as the old chestnuts of substitution, control and mutuality of obligation.
As a matter of course contractors should take the trouble to assess your position, have contracts reviewed and insure yourself against the potentially high cost of defending an enquiry from HMRC.
Qdos offer a number of services and insurances for contractors and there is Shout99’s own Freelancer Outside IR35 (FO35) to consider.
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Steve Greenwell
Qdos Consulting
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