{"id":4084,"date":"2018-01-25T13:46:15","date_gmt":"2018-01-25T13:46:15","guid":{"rendered":"https:\/\/www.b2econsulting.com\/?p=4084"},"modified":"2020-04-16T13:45:13","modified_gmt":"2020-04-16T12:45:13","slug":"ir35-will-they-or-wont-they","status":"publish","type":"post","link":"https:\/\/www.b2econsulting.com\/ir35-will-they-or-wont-they\/","title":{"rendered":"IR35 &#8230;Will they or Won&#8217;t they?"},"content":{"rendered":"<div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-1 nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"background-color: rgba(255,255,255,0);background-position: center center;background-repeat: no-repeat;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;margin-bottom: 0px;margin-top: 0px;border-width: 0px 0px 0px 0px;border-color:#eae9e9;border-style:solid;\" ><div class=\"fusion-builder-row fusion-row\"><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-0 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Conversation\"><img decoding=\"async\" width=\"66\" height=\"66\" src=\"https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2025\/03\/shutterstock_1981823216-Agile-Tx-scaled-e1742314285348-66x66.jpg\" class=\"attachment-recent-works-thumbnail size-recent-works-thumbnail wp-post-image\" alt=\"Agile Expertise, Transformative Results\" srcset=\"https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2025\/03\/shutterstock_1981823216-Agile-Tx-scaled-e1742314285348-66x66.jpg 66w, https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2025\/03\/shutterstock_1981823216-Agile-Tx-scaled-e1742314285348-150x150.jpg 150w\" sizes=\"(max-width: 66px) 100vw, 66px\" \/><\/a>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"post-holder\">\n\t\t\t\t\t\t\t\t\t\t\t<a href=\"https:\/\/www.b2econsulting.com\/agile-expertise-transformative-results\/\">Agile Expertise, Transformative Results: A Conversation<\/a>\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"fusion-meta\">\n\t\t\t\t\t\t\t\t\t\t\t\tMarch, 2025\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<li>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"image\">\n\t\t\t\t\t\t\t\t\t\t\t\t<a href=\"https:\/\/www.b2econsulting.com\/diverse-perspectives-fuel-innovation\/\" aria-label=\"B2E Consulting: Diverse Perspectives Fuel Innovation\"><img decoding=\"async\" width=\"66\" height=\"66\" src=\"https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2025\/03\/Video-Title-Still-66x66.jpg\" class=\"attachment-recent-works-thumbnail size-recent-works-thumbnail wp-post-image\" alt=\"Diverse Perspectives Fuel Innovation\" srcset=\"https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2025\/03\/Video-Title-Still-66x66.jpg 66w, https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2025\/03\/Video-Title-Still-150x150.jpg 150w\" sizes=\"(max-width: 66px) 100vw, 66px\" 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2025\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/ul>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t<div style=\"clear:both;\"><\/div><\/section><div class=\"fusion-additional-widget-content\"><\/div><\/div><div class=\"fusion-widget-area fusion-widget-area-2 fusion-content-widget-area\"><style type=\"text\/css\">.fusion-widget-area-2 {padding:0px 0px 0px 0px;}.fusion-widget-area-2 .widget h4 {color:#3b4251;}.fusion-widget-area-2 .widget .heading h4 {color:#3b4251;}.fusion-widget-area-2 .widget h4 {font-size:14px;}.fusion-widget-area-2 .widget .heading h4 {font-size:14px;}<\/style><style type=\"text\/css\" data-id=\"tweets-widget-3\">@media (max-width: 800px){#tweets-widget-3{text-align:center !important;}}<\/style><section id=\"tweets-widget-3\" class=\"fusion-widget-mobile-align-center fusion-widget-align-center fusion-footer-widget-column widget tweets\" style=\"text-align: center;\"><h4 class=\"widget-title\">Recent Tweets<\/h4><style type=\"text\/css\">.fusion-content-widget-area #tweets-widget-3 .jtwt .jtwt_tweet:before, .fusion-footer-widget-area #tweets-widget-3 .jtwt .jtwt_tweet:before {color: #3c455a;}<\/style>\t\t\t<div class=\"twitter-box\">\n\t\t\t\t<div class=\"twitter-holder\">\n\t\t\t\t\t<div class=\"b\">\n\t\t\t\t\t\t<div class=\"tweets-container\" id=\"tweets_tweets-widget-3\">\n\t\t\t\t\t\t\t<ul class=\"jtwt\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<li class=\"jtwt_tweet\">\n\t\t\t\t\t\t\t\t\t\t<p class=\"jtwt_tweet_text\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/ul>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<span class=\"arrow\"><\/span>\n\t\t\t<\/div>\n\t\t\t<div style=\"clear:both;\"><\/div><\/section><div class=\"fusion-additional-widget-content\"><\/div><\/div><div class=\"fusion-clearfix\"><\/div><\/div><\/div><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-1 fusion_builder_column_2_3 2_3 fusion-two-third fusion-column-last\" style=\"width:66.666666666667%;width:calc(66.666666666667% - ( ( 4% ) * 0.66666666666667 ) );margin-top:0px;margin-bottom:20px;\"><div class=\"fusion-column-wrapper fusion-flex-column-wrapper-legacy\" style=\"background-position:left top;background-repeat:no-repeat;-webkit-background-size:cover;-moz-background-size:cover;-o-background-size:cover;background-size:cover;padding: 0px 0px 0px 0px;\"><span class=\" fusion-imageframe imageframe-none imageframe-1 hover-type-none\"><img decoding=\"async\" width=\"1000\" height=\"669\" alt=\"IR35\" title=\"IR35\" src=\"https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/Untitled-design-9.png\" class=\"img-responsive wp-image-4085\" srcset=\"https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/Untitled-design-9-200x134.png 200w, https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/Untitled-design-9-400x268.png 400w, https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/Untitled-design-9-600x401.png 600w, https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/Untitled-design-9-800x535.png 800w, https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/Untitled-design-9.png 1000w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/span><div class=\"fusion-sep-clear\"><\/div><div class=\"fusion-separator fusion-full-width-sep\" style=\"margin-left: auto;margin-right: auto;margin-top:20px;width:100%;\"><\/div><div class=\"fusion-sep-clear\"><\/div><style type=\"text\/css\"><\/style><div class=\"fusion-title title fusion-title-1 fusion-sep-none fusion-title-text fusion-title-size-one\" style=\"margin-top:0px;margin-bottom:0px;\"><h1 class=\"title-heading-left\" style=\"margin:0;\"><h1 style=\"text-align: left;\"><span style=\"color: #505d7a;\">IR35 &#8230;Will they or Won&#8217;t they?<\/span><\/h1><\/h1><\/div><div class=\"fusion-sep-clear\"><\/div><div class=\"fusion-separator fusion-full-width-sep\" style=\"margin-left: auto;margin-right: auto;margin-top:10px;width:100%;\"><\/div><div class=\"fusion-sep-clear\"><\/div><div class=\"fusion-text fusion-text-1\" style=\"transform:translate3d(0,0,0);\"><p>We had it coming.<\/p>\n<p>Since April 2017, whether IR35 applies to your contract is either your decision (private sector client) or your client\u2019s (public sector).<\/p>\n<p>It was only a matter of time before HMRC announced the potential for expanding the public sector rules to the private sector.\u00a0 The Autumn Statement in November 2017 contained the announcement that \u201c\u2026..<strong><span style=\"color: #505d7a;\">the government will carefully consult on how to tackle non-compliance in the private sector<\/span>.<\/strong>\u201d\u00a0 The Consultation will take place in 2018.<\/p>\n<p>Evidence suggests that the public sector IR35 rules have caused real damage, such as progress with some public sector projects.\u00a0 There is also a noticeable gap between HMRC\u2019s and many other interested parties\u2019 perception of how successful the public sector IR35 changes have been.\u00a0 I would suggest that a proper review now of the impact on the public sector is far better than insisting the private and public sector rules are aligned, without further analysis.\u00a0 Will it be a proper consultation?\u00a0 I hope so but there is always the concern that it will not be, merely putting off the inevitable and that the government\u2019s mind is already made up.<\/p>\n<p>The Government do have an issue with tax take.\u00a0 Like it or not and albeit on a very simplistic basis, the UK\u2019s strong growth in self employment (around totalling around 15% of the workforce now) results in less tax per worker because self employed people tend to pay less tax and national insurance on a given level of income compared to their employed peers.\u00a0 Of course, it\u2019s far more complicated than that as this ignores the fact the UK economy needs a flexible workforce and entrepreneurs to take risks, and the tax system should reward that.<\/p>\n<p>Tax and employment law legislation hasn\u2019t kept up with modern ways of working and the Taylor Report released in July 2017 looked at some broader considerations of modernising working practices.\u00a0 Although tax was not part of that review, this all feeds into the broader conversation about how we deal with working in a modern world, including how we are taxed.<\/p>\n<p>There are some immediate issues such as HMRC\u2019s CEST (Check Employment Status for Tax) test, an online questionnaire that HMRC have on their own website to help assess the tax status of workers including IR35.\u00a0 This was launched at the 11<sup>th<\/sup> hour before the IR35 public sector rules became live in April 2017.\u00a0 There is some debate about whether it takes into account all relevant case law surrounding IR35 and leaves a lot to be desired.<\/p>\n<p>Do we need a statutory employment test, the advantage being to reduce ambiguity when applying IR35?\u00a0 Personally, I don\u2019t believe so.\u00a0 If a test was capable of being defined (and that creates problems in itself) then the price of simplicity will be fairness, you can bet that the line will be drawn to encompass <span style=\"color: #505d7a;\"><strong>more<\/strong> <\/span>freelancers into IR35, not less than it does now.<\/p>\n<p>Also be careful what you wish for.\u00a0 Most developed countries have similar issues to the UK in how to tax a flexible workforce, and anecdotally my experience of clients working overseas means that other country\u2019s versions of \u2018IR35\u2019 can be far more draconian than those even in the UK.<\/p>\n<p>Whilst I acknowledge one of the main difficulties with IR35 is that it is difficult to understand for those who haven\u2019t done detailed research or have had professional input, it strives to ensure those who act like employees are taxed as such, irrespective of whatever stands between them and their client.\u00a0 This is fair.\u00a0 What is very unfair is that those subject to the additional tax and national insurance under IR35 do without any of the benefits of being an employee, including employment rights.<\/p>\n<p>One of the key issues with IR35, for those in private sector at least, is that the sole responsibility for assessing whether the tax is due and the liability for paying rests the freelancer\u2019s limited company.\u00a0 For some agencies and end clients, this creates at best a relaxed attitude regarding any IR35 liability as it is not their problem.\u00a0 I think there is something to be said for engagers having \u2018some skin in the game\u2019 in getting the decision right.<\/p>\n<p>There are steps you can take now against IR35 and I will be discussing those in my presentation at B2E Consulting on 8th February 2018.<\/p>\n<p>I do not know when or if any changes will be made, but realistically the future of IR35 does look set to change.\u00a0 The status quo is unlikely to be an option, but there is always a possibility\u2026\u2026<\/p>\n<\/div><div class=\"fusion-clearfix\"><\/div><\/div><\/div><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-2 fusion_builder_column_1_3 1_3 fusion-one-third fusion-column-first\" style=\"width:33.333333333333%;width:calc(33.333333333333% - ( ( 4% ) * 0.33333333333333 ) );margin-right: 4%;margin-top:0px;margin-bottom:20px;\"><div class=\"fusion-column-wrapper fusion-flex-column-wrapper-legacy\" style=\"background-position:left top;background-repeat:no-repeat;-webkit-background-size:cover;-moz-background-size:cover;-o-background-size:cover;background-size:cover;padding: 0px 0px 0px 0px;\"><div class=\"fusion-sep-clear\"><\/div><div class=\"fusion-separator fusion-full-width-sep\" style=\"margin-left: auto;margin-right: auto;margin-top:30px;width:100%;\"><div class=\"fusion-separator-border sep-double\" style=\"border-color:#e0dede;border-top-width:0px;border-bottom-width:0px;\"><\/div><\/div><div class=\"fusion-sep-clear\"><\/div><span class=\" fusion-imageframe imageframe-none imageframe-2 hover-type-none\"><img decoding=\"async\" width=\"1000\" height=\"669\" src=\"https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/jamesabott.png\" class=\"img-responsive wp-image-4088\" srcset=\"https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/jamesabott-200x134.png 200w, https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/jamesabott-400x268.png 400w, https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/jamesabott-600x401.png 600w, https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/jamesabott-800x535.png 800w, https:\/\/www.b2econsulting.com\/wp-content\/uploads\/2018\/01\/jamesabott.png 1000w\" sizes=\"(max-width: 800px) 100vw, 400px\" \/><\/span><div class=\"fusion-clearfix\"><\/div><\/div><\/div><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-3 fusion_builder_column_2_3 2_3 fusion-two-third fusion-column-last\" style=\"width:66.666666666667%;width:calc(66.666666666667% - ( ( 4% ) * 0.66666666666667 ) );margin-top:0px;margin-bottom:20px;\"><div class=\"fusion-column-wrapper fusion-flex-column-wrapper-legacy\" style=\"background-position:left top;background-repeat:no-repeat;-webkit-background-size:cover;-moz-background-size:cover;-o-background-size:cover;background-size:cover;padding: 0px 0px 0px 0px;\"><div class=\"fusion-text fusion-text-2\" style=\"transform:translate3d(0,0,0);\"><blockquote>\n<p>About the author, James Abbott<\/p>\n<p>James is Director of Abbott Moore Limited and small business tax expert.\u00a0 Abbott Moore Limited deal with annual affairs for freelancers and contractors, including a tax planning service and regular review.\u00a0 He is chair of the UK200Group Freelancers and Contractors Group, a group of experts who meet regularly to share expertise for the benefit of their Freelance and Contractor clients.<\/p>\n<p><a href=\"http:\/\/www.abbottmoore.co.uk\">www.abbottmoore.co.uk<\/a><\/p>\n<\/blockquote>\n<\/div><div class=\"fusion-clearfix\"><\/div><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":11,"featured_media":4085,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[110,105],"tags":[],"class_list":["post-4084","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-b2e-community"],"_links":{"self":[{"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/posts\/4084","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/comments?post=4084"}],"version-history":[{"count":5,"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/posts\/4084\/revisions"}],"predecessor-version":[{"id":4096,"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/posts\/4084\/revisions\/4096"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/media\/4085"}],"wp:attachment":[{"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/media?parent=4084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/categories?post=4084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.b2econsulting.com\/wp-json\/wp\/v2\/tags?post=4084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}