As we mark 10 years of IR35 with our ContractorCalculator IR35 Special Report, we’ve come to the conclusion that, in some ways, we contractors have actually benefitted from the ‘contractor tax’.
I’d been contracting for two years when IR35 first appeared and, being a prudent sort of chap, naively asked the Inland Revenue, as it then was, for an opinion on my IR35 status. Surprise, surprise, they found my contract at that time was inside of IR35. Then, after much discussion and having reached for my lawyer, I got a letter from the taxman confirming that my contract was, indeed outside IR35.
If I was naive, then many other contractors could be accused of being in denial, plunging their heads into the sand and pretending IR35 did not exist. Yet more succumbed to the Revenue’s bullying and handed over their cash out of fear, even though many were genuine contractors and shouldn’t have had to pay extra. Some of my fellow contractors opted to work inside IR35 and others outside it, even though they were all doing the same job and had all signed the same or similar contract!
But, as highlighted in our IR35 Special Report, those contractors who found themselves inside IR35 were suddenly looking at the potential to enjoy a much earlier and more comfortable retirement. And Professional Contractors Group (PCG) Elected Board Member Julie Stewart reminds us that there would have been no PCG, and all the benefits it brings to the contracting sector, without IR35.
Contractor Linda Marriot found a trading solution that suited her needs much more effectively than a contractor limited company, and she is surely not alone in that respect. And Derek Kelly of Parasol tells us that contracting now has a level of self-regulation that did not exist pre-IR35. Not only that, but my naive enquiries to the Revenue 10 years ago also wouldn’t be necessary these days, because there’s now a whole service industry dedicated to supporting contractors, not to mention the Contractors’ Handbook and ContractorCalculator.co.uk, which provide accurate, expert advice to new and established contractors alike.
IR35 is still as controversial as ever, but it, or something very similar, is likely to be with us for the foreseeable future. Which is why we’ve marked the occasion with a Special Report that not only looks back on the first 10 years of IR35, but also to its future. In addition, there are essential tips to help contractors negotiate the IR35 minefield.
Click here to download your free copy of the ContractorCalculator IR35 Special.