If you would like to send over any other letters or experiences please send to info@ir35calc.co.uk
We received an interesting letter this week from a contractor who was invited to a meeting by his agency to discuss IR35 and its effects on his contract.
He was told that the full approval and knowledge of the client had been obtained and that the meetings would be held during working hours. A group of contractors all saw the agency at the same time and the opening question was put to them as ‘I hope you all ticked the right box for Q6 on the P35’s’ ‘none of you have ticked yes I hope’. There was a nervous laughter from all in the room and then the contractor concerned actually stated that he had in fact ticked yes, and further stated he was not prepared to indulge in tax evasion.
The agency representative then proceeded to ask him exactly what he thought he had been doing for so long, to which he replied, tax avoidance not tax evasion!! He then went on to explain that there was a significant difference between tax evasion and tax avoidance, the principle one being the jail term that accompanies tax evasion.
The agents main premise for his stance on tax issues was that the Revenue is short of resource and that they do not have the ability to check each and every contractor properly, so if you do the basics like set up a web page, advertise for work and conduct yourself in a business like manner you could escape the Revenue. Once you have done this you should be all right. The other contractors in the room were happy with this and they left with the knowledge that if they did as they had been told they would be fine. The agency did however tell them to keep the cash aside, just in case an inspector caught them, and also not to spend it, isn’t that just confidence for you!!!
With agencies offering advice like this to contractors, we could well be taking a big chance, and as our contractor has stated, we could lose a lot more than the few thousand extra pounds we need to pay.