Categorized | alan's blog, ir35 rules

So what am I doing wrong?

So what am I doing wrong?

There’s been mixed reactions to the Coalition’s plans for the promised IR35 review. Mostly people see the announcement in the Budget as a positive step forward, and even those who previously seemed to have found a new enthusiasm for IR35 seem to have gone quiet.

And you have to admit that Mark Prisk’s reported comments, indicating that IR35 as it stands is doomed, was welcome news, if they were accurately reported.

Of course there are still those who demand immediate action and the instant repeal of IR35 and all its manifest evils, but I fear they are to be disappointed. Let’s face it, we are talking about Government decision making here. Despite the obvious urgency and energy of our new masters, they work at a speed that makes geological time seem positively reckless.

The other thing that keeps coming up everywhere is “What do we replace it with?” I know I wrote about son of IR35 recently, but this constant drip feed of suggestions for how it can be re-worked is beginning to irritate.

For one thing, nobody has yet persuaded me that it needs to be replaced. In my case, I own a Limited Company through which I provide various services to a range of clients (including this blog, for example). The company has been around for many years, is operated in accordance with all the relevant laws and pays all its required taxes without a murmur (well, not a very loud one, anyway…).

So why is there a clamour to single me out as some kind of anomaly and insist that I have to operate under some differential taxation regime because I don’t aim to become a rival to Accenture? Actually I am a rival to Accenture in many ways, but let’s not go there just yet!

With or without IR35, I would still use my company to sell my services, that’s what it does. So what am I doing wrong that some people demand I become some form of special case?

My hope is that HMG and the Office of Tax Simplification will see sense and cancel IR35 with no thought of replacing it. I admit they may take a longer look at small company taxation in the round, but that should be against all small companies equally. Those who for various reasons only have one or two workers are no different to bigger small companies, if you see what I mean, so why should they need different treatment?

On a different subject, I was talking with my last clients recently, who are in the Public Sector, and asked them how they were planning to cope with the impending cuts in public expenditure. Seems they are actually quite relaxed about them, since they’ve been working a programme of examining expenditure and optimising their budget management for several years now. They are confident that they’ve already made the level of savings expected of them. So you have to ask, if that one organisation can do that so successfully, why can’t all of them…?

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Image: head scratching by a r b o

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