UK watchdog to rule on £246M Post Office subsidy over Horizon scandal and IR35 The UK competition regulator is set to report on a request for £246 million in subsidies to the Post Office, a publicly owned company, to cover its costs in compensation for the Horizon IT scandal and tax liability for IR35, a mechanism commonly used by tech consultants. The Subsidy Advice Unit (SAU), part of the Competition …
>> A statutory inquiry into the mass miscarriage of justice launched in 2021 and is ongoing.
These MFs just sit there polishing their arses. It is time to get rid of the existing statutory inquiry, and bring in something which is led by the plaintiffs. The judiciary are not very trustworthy.
They have got their Government and Post Office priorities right and continue to piss from a great height on these unfortunate victims and families.
I think the now in vogue ‘Misconduct in a Public Office’ net needs cast a great deal wider.
Post Office
BoJo and Brexiteers
Nathan Gill
Baroness Mone
Many Police
HMRC/DWP
……and probably a thousand more.
The rot runs deep and wide. No-one is held accountable and the outcome is always "mistakes were made" and "lessons will be learned". It is challenging to envisage how our species will overcome this unending cycle of mistake, misconduct, and shocking waste of taxpayer funding.
IR35 was introduced to reduce off-payroll workers who avoid paying regular employment taxes
That claim has it backwards. IR35 did not reduce avoidance; it concentrated it. By forcing work away from independents and small consultancies, it funnelled contracts toward large firms with the scale, legal cover and accounting machinery to minimise tax exposure far more aggressively than any lone contractor ever could.
The same firms also gained easier access to overseas labour, hired below UK market rates under existing visa schemes, further undercutting domestic specialists. That was not an unintended side effect but a structural outcome of how the rules were designed and enforced.
In practice, IR35 reduced competition, created brain drain, weakened delivery quality, increased costs to the public and private sector, and expanded the very behaviours it claimed to prevent, just relocated behind corporate logos and compliance theatre.
I shall add:
An “off-payroll worker” is not a low-tax worker.
A contractor charges more than an employee because they are a business. That higher rate means the total tax paid is always higher than for an equivalent PAYE employee, even without payroll.
A consultancy employee on £60-70k pa is typically billed at £1k-2k a day. The spread is captured as corporate margin and usually shifted offshore in ways an individual contractor cannot.
An “off-payroll worker” is not a low-tax worker.
In fact there isn't such a thing as an off-payroll worker in this context. It's simply that the worker is shifter from the client's payroll to the contracting company's payroll. It's just one of those pejorative terms HMRC like to use to demonise those who opt to exercise their right to run their own business.
The term might be applied to a sole trader but that's a completely different status.
As an off-payroll worker:
* You don't get paid holidays or bank holidays;
* You don't get sick pay (or private health benefits);
* You can be terminated usually at 1 weeks notice without any reason being given;
* You won't get access to any employer fringe benefits e.g. shop discount schemes;
* You aren't eligible for company car schemes;
* You have to make your own pension arrangements and contributions all come out of your pay.
HMRC IR35 tests:
* Control: Evaluates the degree of control the client has over the contractor. Outside IR35, the contractor should decide how, when, and where to work, rather than being managed like an employee;.
* Substitution (Right of Personal Service): A key indicator is whether the contractor can send a substitute to perform the work. A genuine business has the right to send a substitute, whereas an employee is required to perform work personally, as explained by People Group Services.
* Mutuality of Obligation (MOO): This checks if the client is obligated to offer work and if the contractor is obliged to accept it. Outside IR35, there should be no obligation for further work once the contract ends.
In additon:
* Financial Risk: Does the contractor bear financial risk, such as paying for their own insurance, training, and fixing mistakes at their own expense?
* Part and Parcel: Is the contractor integrated into the client's organization (e.g., having a company email, appearing on the org chart, or receiving benefits)?
* Equipment: Does the contractor use their own equipment (laptops, software) rather than the client's?
One of the other dodgy areas is working via an "umbrella company" as below:
"An umbrella company acts as an employer for temporary or contract workers, serving as an intermediary between the worker, a recruitment agency, and an end client, handling payroll, taxes (PAYE), and National Insurance, providing legal employment status, benefits, and continuous work history, while the worker performs assignments for various clients. They invoice the agency, get paid, then pay the worker through PAYE, deducting contributions, simplifying administration for the contractor."
Thus working for an umbrella company you get none of the benefits but screwed over for PAYE and you still have to arrange your own sickness insurance, pension payments etc.
I frequently get offered roles under IR35 or via an umbrella company, all of which I refuse, but I know a goodly number of people who are working in IR35 roles who are not operating within the rules (and I don't blame them). One I know sets up a new company every 12 months or so so as to stay under the HMRC radar.
I'm thankful to be operating (legally) outside IR35.
One of the previous posts was correct, it's basically screwed over the majority of small companies in favour of large consultancies employing people under IR35.
A freelancer working for their own company should be paid a salary which covers holidays, time off sick etc. and may well have the company pay for private medical cover. The company might provide a company car (but very likely heavily taxed as a benefit in kind) or pay the employee mileage for using their own car subject to HMRC limits. The company cannot bill for periods during which it is not providing a service. It should manage its finances to allow for paying salary during out of contract periods from the fees billed in the course of contracts.
You need to distinguish between the freelancing company and the freelancer. Failing to do this plays right into HMRC's hands as propaganda against those who wish exercise their right to run their own business company as does using language which confuses the client with an employer as in "employer's fringe benefits".
Substitution (Right of Personal Service): A key indicator is whether the contractor can send a substitute to perform the work. A genuine business has the right to send a substitute ...
That is not a valid test. It may be for common skills/knowledge, but for specialist skills/knowledge the client may be contracting the contractor for the specific skills/knowledge that one person has. And as I think a lot of us realise, a big section of the contracting market is for those specialist skills/knowledge that a business might need for a short time but cannot justify employing full time. I recently worked on a project with someone who did have an almost unique combination of skills - being able to design, implement, and test a particular type of system. People who can design - plenty. People who can build a design done by someone else - plenty. People who can diagnose problems/test & verify the system when it's built - plenty. But people who could do the whole lot from start to finish - very few, and that's specifically the skillset he was contracted in for. To suggest that because his company couldn't substitute someone else that it was therefore disguised employment is just laughable (or would be if it weren't the sort of fakery HMRC uses to screw people.
One of the previous posts was correct, it's basically screwed over the majority of small companies in favour of large consultancies employing people under IR35
+1 to that.
Mostly agree but having company email is not a privilege, is it? What next, not log into their cloud tenancy but do in your own tenancy?
A true business will do that, agree. But contractors are neither here nor there.
Am ideal situation will be to create a tax plan for contractors 25 to 30% Corp tax (and don't touch the dividends) and apply the rest of the rules.
Contractors (non ir35), end up with Corp tax and dividend tax but not treated with litigation threat by hmrc at least. The current rule, in a way is better that way. Whereas in-IR35 (under umbrella) lose a lot to the umbrellas(run by politicians and crooked lawyers) and also under litigation threat any time because those umbrellas.
Last time I checked HMRC is still not ready to regulate the umbrellas. Why?
Hey here’s a thought … how about everyone who is effectively a full time employee - disguised or not - pays themself a salary that is taxed the same as everyone else …. and takes dividends/profits as a performance bonus. Contractors … you can also put some money aside for dental and healthcare plan if you choose, holiday and sick pay accruals that otherwise you’d blow on upgrading your Audi Q5 to a Porsche Macan.
It’s called being a good citizen and not looking for every opportunity to be greedy.
Take some lesson/ from Moonpig Founder and former Dragon Nick Jenkins.
https://www.schroders.com/en/global/family-offices/insights/after-the-exit-moonpig-founder-nick-jenkins/
I agree mostly - and have given you an upvote.
But, (at least for the Horizon scandal) this is a somewhat unusual situation where I personally think it's correct to provide some support - as long as we claw it back from the guilty parties when that's all been settled.
For part fo the period this applies to, the PO was publicly owned. If you look as the history, what is now Post Office Counters started off as just part of the Post Office - and IIRC has been through a few changes of ownership structure over the years. As the article points out, the liabilities are very large relative to it's turnover - so if you force it to cover all the costs then there's a risk of killing it completely, which given the disquiet at even selling it in the first place caused, wouldn't go down too well.
Then we have the unusual legal situation where the PO could bring it's own prosecutions. Arguably, allowing that to continue - even when it was getting to be fairly obvious that it was being abused - is again a failing of the government (i.e. the government was culpable in the actions leading up to the need for compensation. The DPP (department for public prosecutions) was specifically created to stop the situation where the police were bringing "questionable" prosecutions without the need to show any independent body some evidence. I can't help thinking that had the PO been required to put everything past the DPP, the issue would have been spotted a lot sooner than it was.
Now the "claw it back from the guilty parties" bit. There is a criminal investigation going on, and it takes time to gather evidence that will stand up in court. We all "know" who the guilty parties are, but us "know"ing, and the DPP being able to prove "beyond reasonable doubt" in a court are two different things. This is going to take years - and then there will probably be appeals, and so on. Only after all that will we know (in a legally defensible way) who the guilty parties are, and hopefully will be able to nail them for the cost of this sort of subsidy.
Well, if private criminal prosecutions brought by the PO, sidestepping the DPP were good enough for them to convict innocent sub-postmasters, how about we make an exception, and allow them to be used to prosecute these snakes, and find them "guilty by default" in the same way? After all, if we get it wrong, they can fight it through the press, and an ITV drama, and finally get the government's notice to get some redress 20 years later, then we can think about the taxpayer subsidising them.
Yes, I know this is entirely unreasonable, and unlikely, but it does irk me that those in positions of power can abuse them to both cause great injustices such as this, and evade justice themselves so effectively.
Because we need a working postal service, the victims deserve to be paid compensation (and should have been, years ago - the delays are a second scandal all on its own), and because those responsible, even if you took every penny they had, including all their bonuses, would not be able to cover the lawyers' fees, never mind the compensation.
I suspect none of those who oversaw this disgrace will ever see the inside of a prison cell, and most will keep their bonuses.
The law does not exist to deliver justice, but to protect the rich and powerful. Any justice you see is incidental, accidental, or window dressing.
A working postal service would be nice, wouldn't it? Post Offices, however, are completely separate from the actual delivery service (Royal Mail), apart from serving as a collection point for letters and parcels, and a sales point for stamps. These are both rather redundant since you can buy stamps in pretty much any supermarket or corner shop, and RM collections are being made from post boxes, now being modified to allow larger parcels, parcel collection lockers, and your own home (now for a fee).
The Royal Mail themselves are an absolute shambles. I have been, for instance, awaiting delivery of a parcel using their 48™ Service (note 48™, not 48hr) which has been with them now for eight days. They're a private company now, and the results of privatisation are all too clear to see, following the same pattern as everywhere else: a diminished service at a higher price. I think I may have already made the point, elsewhere, several times, that the root of this problem is the neoliberal economic model that was popularised under Reagan and Thatcher, characterised by private profits for the richest, deregulation, and corruption.
Nice to hear of Qdos again. Way back in 2003 I had a sneaky tax review that was actually a disguised IR35 investigation.
With the help of Qdos the tax man was sent packing, kicking and screaming that they were not able to contact me directly. Happy days. I never saw them again.
I am freelance/self-employed, building websites for all and sundry. CEST couldn't even handle the idea that I might be working for multiple organisations and decided I should have been employed. CEST was obviously specified by and written by idiots who had no idea of the variation out in the real world.
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