Reply to post: Re: Lipstick on a pig

Re: Lipstick on a pig

> this is the case of a few (and from the complaints, it is not just a few) have gamed the system to the point that something had to be done

Oh, undoubtedly. But, it's that "something must be done" that lies at the heart of so many Government screw-ups. The focus is on being seen to do something, rather than on *how* to do it, resulting in massive, massive screw ups.

IR35 is exactly one of those things. It demonstrably wasn't working properly when applied to contractors employed by the public sector, but they plowed on with private sector implementation regardless.

> if IR35 is so bad financially for the people that fall under it's scope, it does rather suggest that what went on before was not necessarily resulting in an appropriate overall tax contribution.

IR35 isn't great for people who fall under it's scope, but that's not the real problem with it IMO.

The _real_ problem is the uncertainty.

You can read what the law says, and decide that your contractors clearly don't fall under IR35. Except, HRMC will use their own inconsistent standards to assess it and decide that they do - at which point they'll pop up demanding payment and threatening legal action. That they've lost the majority of cases they've dragged to court doesn't appear to have dissuaded them much either.

What it means is that having contractors outside of IR35 is viewed as a massive potential legal liability - are they far enough outside that even HMRC won't view them as falling within it?

> It is the same for those who were impacted by Covid and eligible furlough who were self employed in some guise yet because of the way they had arranged their company/income/accounts, meant that they had no realistic income

Yep, but I think there's an element of "don't blame the player, blame the game" here.

That our tax-code contains so many legal loopholes isn't the fault of those who use them - hell, some of them probably didn't even fully know they were using (if you pay your accountant to set things up in the most tax-efficient manner (s)he is going to do just that).

Ultimately, our entire system needs an overhaul, but that won't happen because some of those same loopholes are used by friends of those with the power to effect change.