Why is IR35 a thing
Simply because what used to be employees and employers are knowingly avoiding paying the tax associated with employment.
There have always been what I will call "external experts" these are people who are brought in to deal with the ~10% of work that "standard" employees cannot/will not do. They were normally called in when that ~10% of work built up to the point where it was effecting the employers 90% completion rate, thus they may pick up a contract with more than a years worth of ~10% but they were never part of the management structure nor would they stay for years at the same company (once the accumulated ~10%. is cleared then they move on)
IR35 is punishing the "external expert" without dealing with the "employer" bringing in people as contractors when they are acting as staff.
If they really want to get rid of the employment tax dodgers and restore contractors to being "external experts" then you have to hit the source via taxing the "employer" to the point were bringing in staff as contractors is no longer viable.
Random tax slap downs do not stop the employers since they effectively have nothing to loose and so they will continue to promote employees pretending they are contractors.
So why is HMRC only targetting the "contractors"? it clearly isn't in an attempt to hit the tax dodgers since the companies bringing in the "contractors" is held blameless.
For my part the responsibility for employing staff as contrators lies squarely at the employer's door and if you are going to taxslap anyone then the employer should be first.
If you want to spot the employees pretending to be contrators then take their income and if it is not atleast triple the "standard employee" wage with all associated taxes added on then the employer and the bogus contractor are tax dodging. That's a nice easy calculation and something that would take an hour at most to code into a web app
Biting the hand that feeds IT
