Work colleagues

[IrishBhoy]

I’m working as a contractor at the minute amongst a team of about 25 other contractors. When the tax laws regarding contractors changed in April this year and IR35 was implemented, we all needed to wind up our limited companies and move over to an umbrella company which has resulted in us taking a bit of a hit on our wages.
 

One of the guys I work with has always been badgering the rest of the team to get involved with an accountant on the Isle of Man, promising a return to the old wages along with a couple of scams which he called ‘legal loopholes’, where he collected a grand for every guy he got signed up. It was obvious he was up to something dodgy but we all assumed he was treading just on the right side of legality. He didn’t appear on Wednesday morning and phoned our boss late Wednesday afternoon, after being released from a police station charged with defrauding HMRC and numerous other offences. Turns out he took 3 separate Bounce back loans at £50,000 a time, had his accountant fiddling his books for something to do with tax credits and received £4500 a month for 3 months and another charge which had something to do with illegally liquidating his limited company. He’s not appeared back at work and from speaking to people who know him he’s absolutely shiting himself and expecting a custodial sentence, as well as having to return the money from the bounce back loans. 
 

He didn’t tell any of us the full extent of what he was up to, but we should probably have guessed when he came in to work in a brand spanking 70 plate Porsche Cayenne a few months ago, and is just last week back from a holiday in the Maldives I can’t say I feel too sorry for him as he was fully aware that receiving more than one bounce back loan was illegal, your business had to be demonstrably affected by Coronavirus and you were only allowed to apply for 25% of your predicted turnover, which would have been £25k max. I would like to see HMRC go after companies like Starbucks and Amazon etc. with the same energy they’ve come after this guy though. The City of London is full of rich people evading tax with offshore accounts, with different laws to the UK in order to exploit these loopholes. They manage to do it in a more subtle way than this guy, but if a company like Gazprom or GE, who both funnel millions through the City of London, were accused of fraud to the sum of £150k, there’s not a chance the CEO would be going to jail for it. 

[Boghead ranter]

14 minutes ago, IrishBhoy said:

I’m working as a contractor at the minute amongst a team of about 25 other contractors. When the tax laws regarding contractors changed in April this year and IR35 was implemented, we all needed to wind up our limited companies and move over to an umbrella company which has resulted in us taking a bit of a hit on our wages.
 

One of the guys I work with has always been badgering the rest of the team to get involved with an accountant on the Isle of Man, promising a return to the old wages along with a couple of scams which he called ‘legal loopholes’, where he collected a grand for every guy he got signed up. It was obvious he was up to something dodgy but we all assumed he was treading just on the right side of legality. He didn’t appear on Wednesday morning and phoned our boss late Wednesday afternoon, after being released from a police station charged with defrauding HMRC and numerous other offences. Turns out he took 3 separate Bounce back loans at £50,000 a time, had his accountant fiddling his books for something to do with tax credits and received £4500 a month for 3 months and another charge which had something to do with illegally liquidating his limited company. He’s not appeared back at work and from speaking to people who know him he’s absolutely shiting himself and expecting a custodial sentence, as well as having to return the money from the bounce back loans. 
 

He didn’t tell any of us the full extent of what he was up to, but we should probably have guessed when he came in to work in a brand spanking 70 plate Porsche Cayenne a few months ago, and is just last week back from a holiday in the Maldives I can’t say I feel too sorry for him as he was fully aware that receiving more than one bounce back loan was illegal, your business had to be demonstrably affected by Coronavirus and you were only allowed to apply for 25% of your predicted turnover, which would have been £25k max. I would like to see HMRC go after companies like Starbucks and Amazon etc. with the same energy they’ve come after this guy though. The City of London is full of rich people evading tax with offshore accounts, with different laws to the UK in order to exploit these loopholes. They manage to do it in a more subtle way than this guy, but if a company like Gazprom or GE, who both funnel millions through the City of London, were accused of fraud to the sum of £150k, there’s not a chance the CEO would be going to jail for it. 

He should've funnelled some of his cash back into the Tory party, he'd've been safe then.

[Thorongil]

1 hour ago, IrishBhoy said:

I’m working as a contractor at the minute amongst a team of about 25 other contractors. When the tax laws regarding contractors changed in April this year and IR35 was implemented, we all needed to wind up our limited companies and move over to an umbrella company which has resulted in us taking a bit of a hit on our wages.
 

One of the guys I work with has always been badgering the rest of the team to get involved with an accountant on the Isle of Man, promising a return to the old wages along with a couple of scams which he called ‘legal loopholes’, where he collected a grand for every guy he got signed up. It was obvious he was up to something dodgy but we all assumed he was treading just on the right side of legality. He didn’t appear on Wednesday morning and phoned our boss late Wednesday afternoon, after being released from a police station charged with defrauding HMRC and numerous other offences. Turns out he took 3 separate Bounce back loans at £50,000 a time, had his accountant fiddling his books for something to do with tax credits and received £4500 a month for 3 months and another charge which had something to do with illegally liquidating his limited company. He’s not appeared back at work and from speaking to people who know him he’s absolutely shiting himself and expecting a custodial sentence, as well as having to return the money from the bounce back loans. 
 

He didn’t tell any of us the full extent of what he was up to, but we should probably have guessed when he came in to work in a brand spanking 70 plate Porsche Cayenne a few months ago, and is just last week back from a holiday in the Maldives I can’t say I feel too sorry for him as he was fully aware that receiving more than one bounce back loan was illegal, your business had to be demonstrably affected by Coronavirus and you were only allowed to apply for 25% of your predicted turnover, which would have been £25k max. I would like to see HMRC go after companies like Starbucks and Amazon etc. with the same energy they’ve come after this guy though. The City of London is full of rich people evading tax with offshore accounts, with different laws to the UK in order to exploit these loopholes. They manage to do it in a more subtle way than this guy, but if a company like Gazprom or GE, who both funnel millions through the City of London, were accused of fraud to the sum of £150k, there’s not a chance the CEO would be going to jail for it. 

I’ve been a contractor and I’ve hired contractors. There was a subset who just couldn’t bear IR35. Couldn’t reconcile themselves to it out of sheer arrogance and greed. It was pathetic watching these guys wriggle squirm and rage, trying every trick in the book to be Outside the scope. 
 

[IrishBhoy]

20 minutes ago, Thorongil said:

I’ve been a contractor and I’ve hired contractors. There was a subset who just couldn’t bear IR35. Couldn’t reconcile themselves to it out of sheer arrogance and greed. It was pathetic watching these guys wriggle squirm and rage, trying every trick in the book to be Outside the scope. 
 

Yes I know exactly what you mean. I work in the rail industry and fall inside IR35, but if I was given a works van or if I worked between two different depots I would fall outside IR35. There’s loads of other ways to fall outside it that I don’t know about, but the agency’s and accountants that are losing a fortune now everyone is shutting their limited companies will be desperate to find a loophole. 
 

The agency’s are struggling to get men into jobs inside IR35, it’s about a £12/hour difference in my industry. To get round it they are setting up new companies where they can fall outside IR35 as they don’t meet the criteria for things like turnover, number of employees etc. I’ve been offered jobs in London and Liverpool in the past few weeks outside IR35 and paid through a limited company. There’s about a £600 per week difference between being inside or outside, although you would need to pay income tax and national insurance off that, and a yearly corporation tax bill. When I got paid through a limited company I claimed VAT, paid back at 6.5% each quarter, which was enough to cover my yearly tax bill. That was good for me but the taxman was losing out on tens of thousands of pounds  

I’m not surprised the Govt have clamped down on contractors as they have been missing out on an extraordinary amount of tax. The one thing I don’t agree is them implementing IR35 before setting up a regulatory body for the umbrella companies. Any con man can set one up as it stands, taking employers and employees National insurance as well as  a substantial admin fee for the pleasure of paying your wages into your bank. 

[tamthebam]

If the regulatory body for umbrella companies is called The Umbrella Corporation I don't see that ending well...

[superbigal]

I’m working as a contractor at the minute amongst a team of about 25 other contractors. When the tax laws regarding contractors changed in April this year and IR35 was implemented, we all needed to wind up our limited companies and move over to an umbrella company which has resulted in us taking a bit of a hit on our wages.
 
One of the guys I work with has always been badgering the rest of the team to get involved with an accountant on the Isle of Man, promising a return to the old wages along with a couple of scams which he called ‘legal loopholes’, where he collected a grand for every guy he got signed up. It was obvious he was up to something dodgy but we all assumed he was treading just on the right side of legality. He didn’t appear on Wednesday morning and phoned our boss late Wednesday afternoon, after being released from a police station charged with defrauding HMRC and numerous other offences. Turns out he took 3 separate Bounce back loans at £50,000 a time, had his accountant fiddling his books for something to do with tax credits and received £4500 a month for 3 months and another charge which had something to do with illegally liquidating his limited company. He’s not appeared back at work and from speaking to people who know him he’s absolutely shiting himself and expecting a custodial sentence, as well as having to return the money from the bounce back loans. 
 
He didn’t tell any of us the full extent of what he was up to, but we should probably have guessed when he came in to work in a brand spanking 70 plate Porsche Cayenne a few months ago, and is just last week back from a holiday in the Maldives [emoji23] I can’t say I feel too sorry for him as he was fully aware that receiving more than one bounce back loan was illegal, your business had to be demonstrably affected by Coronavirus and you were only allowed to apply for 25% of your predicted turnover, which would have been £25k max. I would like to see HMRC go after companies like Starbucks and Amazon etc. with the same energy they’ve come after this guy though. The City of London is full of rich people evading tax with offshore accounts, with different laws to the UK in order to exploit these loopholes. They manage to do it in a more subtle way than this guy, but if a company like Gazprom or GE, who both funnel millions through the City of London, were accused of fraud to the sum of £150k, there’s not a chance the CEO would be going to jail for it. 

Would imagine they want to make a few examples of those defrauding the country during a pandemic.
Not like he was so skint to start with.
I would go for 5 years in the sweepie.

[coprolite]

33 minutes ago, IrishBhoy said:

Yes I know exactly what you mean. I work in the rail industry and fall inside IR35, but if I was given a works van or if I worked between two different depots I would fall outside IR35. There’s loads of other ways to fall outside it that I don’t know about, but the agency’s and accountants that are losing a fortune now everyone is shutting their limited companies will be desperate to find a loophole. 
 

The agency’s are struggling to get men into jobs inside IR35, it’s about a £12/hour difference in my industry. To get round it they are setting up new companies where they can fall outside IR35 as they don’t meet the criteria for things like turnover, number of employees etc. I’ve been offered jobs in London and Liverpool in the past few weeks outside IR35 and paid through a limited company. There’s about a £600 per week difference between being inside or outside, although you would need to pay income tax and national insurance off that, and a yearly corporation tax bill. When I got paid through a limited company I claimed VAT, paid back at 6.5% each quarter, which was enough to cover my yearly tax bill. That was good for me but the taxman was losing out on tens of thousands of pounds  

I’m not surprised the Govt have clamped down on contractors as they have been missing out on an extraordinary amount of tax. The one thing I don’t agree is them implementing IR35 before setting up a regulatory body for the umbrella companies. Any con man can set one up as it stands, taking employers and employees National insurance as well as  a substantial admin fee for the pleasure of paying your wages into your bank. 

Your VAT reclaim sounds incredibly hooky.  Especially if it's enough to cover your tax. 

It's not really the Government's job to help people who are ripping the piss to do it safely. The point of the new rules is to get people on payrolls not encourage them to use increasingly dodgy set ups. 

[Thorongil]

42 minutes ago, IrishBhoy said:

Yes I know exactly what you mean. I work in the rail industry and fall inside IR35, but if I was given a works van or if I worked between two different depots I would fall outside IR35. There’s loads of other ways to fall outside it that I don’t know about, but the agency’s and accountants that are losing a fortune now everyone is shutting their limited companies will be desperate to find a loophole. 
 

The agency’s are struggling to get men into jobs inside IR35, it’s about a £12/hour difference in my industry. To get round it they are setting up new companies where they can fall outside IR35 as they don’t meet the criteria for things like turnover, number of employees etc. I’ve been offered jobs in London and Liverpool in the past few weeks outside IR35 and paid through a limited company. There’s about a £600 per week difference between being inside or outside, although you would need to pay income tax and national insurance off that, and a yearly corporation tax bill. When I got paid through a limited company I claimed VAT, paid back at 6.5% each quarter, which was enough to cover my yearly tax bill. That was good for me but the taxman was losing out on tens of thousands of pounds  

I’m not surprised the Govt have clamped down on contractors as they have been missing out on an extraordinary amount of tax. The one thing I don’t agree is them implementing IR35 before setting up a regulatory body for the umbrella companies. Any con man can set one up as it stands, taking employers and employees National insurance as well as  a substantial admin fee for the pleasure of paying your wages into your bank. 

I’ve worked extensively with lawyers and designed policies to respond to IR35. Almost all of the loopholes you’ve described these guys as doing are not loopholes, they are tax evasion. There aren’t loads of ways to fall outside it, an assignment is either outside or it isn’t. Stuff like “being given a works van means you are outside” is crazy. Hope they all get caught and done. 
The real risk though is on the end user. It’s they who specify Inside or Outside and they will end up in big trouble if they aren’t complying. 

Edited December 12, 2021 by Thorongil

[IrishBhoy]

5 minutes ago, superbigal said:

Would imagine they want to make a few examples of those defrauding the country during a pandemic.
Not like he was so skint to start with.
I would go for 5 years in the sweepie.

They definitely do. I watched Prime Ministers Questions the other day and an MP said that the fraud involving the coronavirus bounce back loans was on a scale never seen before. The company director isn’t liable for the loan if it can’t be repaid, and the banks were dishing out loans of 15-20 grand to one man band companies with a turnover of £50k with no questions asked as long as the company was at least 2 years old. Guys in my work were applying at 8am and had £20k in their bank by midday. With IR35 coming in earlier this year a lot of contractors have managed to liquidate their company, but have been hearing stories recently where the lending bank is blocking the process and questions are getting asked with regards to what the loan was spent on. The loan could be used for wages as long as the company wasn’t bringing in any other income. A few guys in my work took the loan and tried to liquidate their company and are now getting their accounts raked through.

[coprolite]

1 minute ago, Thorongil said:

I’ve worked extensively with lawyers and designed policies to respond to IR35. Almost all of the loopholes you’ve described these guys as doing are not loopholes, they are tax evasion. Stuff like “being given a works van means you are outside” is crazy. Hope they all get caught and done. 

I agree withthis except the last sentence. 

The tax rules are so byzantine that they are difficult to follow for most people. Most people rely heavily on professional sounding advisers and think they are acting legitimately. It can be hard to spot an unqualified bullshit merchant. 

Rather than the individuals all getting caught i'd like to see more consequences for the spivs that sell them shite advice. 

[Thorongil]

Just now, coprolite said:

I agree withthis except the last sentence. 

The tax rules are so byzantine that they are difficult to follow for most people. Most people rely heavily on professional sounding advisers and think they are acting legitimately. It can be hard to spot an unqualified bullshit merchant. 

Rather than the individuals all getting caught i'd like to see more consequences for the spivs that sell them shite advice. 

Liability on the end user is one of the central pillars of the IR35 change. That doesn’t mean that other parties acting illegally are immune. 

Companies will have protection if they act illegally only if they have legal advice which turns out to be false. Cost and liability is then with the lawyers and their indemnity insurance. 

Most companies breaking the rules have not paid for legal advice.

[IrishBhoy]

12 minutes ago, coprolite said:

Your VAT reclaim sounds incredibly hooky.  Especially if it's enough to cover your tax. 

It's not really the Government's job to help people who are ripping the piss to do it safely. The point of the new rules is to get people on payrolls not encourage them to use increasingly dodgy set ups. 

That’s fair enough but I am being treated like a full time employee, paying slightly more tax, but getting none of the benefits. I get no holiday pay, sick pay, pension contributions and I could get tapped on the shoulder at 4pm on a Friday and told I’m out a job. 
 

I believe the VAT was a slight dodge, something to do with working on diesel rolling stock meant we claimed 20% and kept 13.5%. Im not upset about paying my fair share of tax, but forcing contractors to get paid through shyster umbrella companies with no regulation is not right. 

[coprolite]

2 minutes ago, Thorongil said:

Liability on the end user is one of the central pillars of the IR35 change. That doesn’t mean that other parties acting illegally are immune. 

Companies will have protection if they act illegally only if they have legal advice which turns out to be false. Cost and liability is then with the lawyers and their indemnity insurance. 

Most companies breaking the rules have not paid for legal advice.

I was meaning from the contractors' perspective. There's a load of folk wisdom going around and some really unethical advice. There are a significant number that know they are at it but the majority just do whatever the norm is for their industry. 

The engagers/employers are usually the ones that benefit most from the cost savings and i ahree theyshould be taking proper advice. Not from lawyers though, they will give overpriced waffle. Much better to go with an accountancy firm... 

 

[IrishBhoy]

12 minutes ago, Thorongil said:

I’ve worked extensively with lawyers and designed policies to respond to IR35. Almost all of the loopholes you’ve described these guys as doing are not loopholes, they are tax evasion. There aren’t loads of ways to fall outside it, an assignment is either outside or it isn’t. Stuff like “being given a works van means you are outside” is crazy. Hope they all get caught and done. 
The real risk though is on the end user. It’s they who specify Inside or Outside and they will end up in big trouble if they aren’t complying. 

You will know better than me, that’s just some of the things I’ve heard that is allowing contractors to continue using limited companies. I know London had IR35 implemented slightly before the rest of the country, but any jobs I’ve seen in the past 6 months working in London depots have been outside IR35. I think the TfL underground depots are still inside actually, but Alstom and Bombardier have managed to fall outside by hiring contractors through new, smaller companies sub contracted to them. 
 

We’ve got a parliament full of millionaires dodging every penny of tax they can, I can’t get too angry at a guy making £40k a year that manages to get a few grand off his tax bill. 

[coprolite]

7 minutes ago, IrishBhoy said:

That’s fair enough but I am being treated like a full time employee, paying slightly more tax, but getting none of the benefits. I get no holiday pay, sick pay, pension contributions and I could get tapped on the shoulder at 4pm on a Friday and told I’m out a job. 
 

I believe the VAT was a slight dodge, something to do with working on diesel rolling stock meant we claimed 20% and kept 13.5%. Im not upset about paying my fair share of tax, but forcing contractors to get paid through shyster umbrella companies with no regulation is not right. 

Agreed, but that's on the employers in the first place and not really the government. Although the government really should regulate companies in general far more actively than they do. 

 

[IrishBhoy]

6 minutes ago, coprolite said:

Agreed, but that's on the employers in the first place and not really the government. Although the government really should regulate companies in general far more actively than they do. 

 

There was supposed to be a regulatory body set up when IR35 was meant to start in 2020, the government had an extra year and still haven’t done it. I believe there is something going through the courts at the minute querying wether the umbrella companies are correct in taking employers NI from our wages. If that goes in the workers favour they will have millions of pounds needing to be repaid. Can see a lot of the umbrella companies going bust if that does happen, and the money funnelled away into the directors pockets. 

[coprolite]

8 minutes ago, IrishBhoy said:

You will know better than me, that’s just some of the things I’ve heard that is allowing contractors to continue using limited companies. I know London had IR35 implemented slightly before the rest of the country, but any jobs I’ve seen in the past 6 months working in London depots have been outside IR35. I think the TfL underground depots are still inside actually, but Alstom and Bombardier have managed to fall outside by hiring contractors through new, smaller companies sub contracted to them. 
 

We’ve got a parliament full of millionaires dodging every penny of tax they can, I can’t get too angry at a guy making £40k a year that manages to get a few grand off his tax bill. 

This is Bombardier of Canada who outbid the UK based competition for the big rolling stock contract? Would it be much of a stretch to guess that the formerly state owned company that got outbid would have used employees for this work?  Privatisation and outsourcing strikes again. 

 

[coprolite]

5 minutes ago, IrishBhoy said:

There was supposed to be a regulatory body set up when IR35 was meant to start in 2020, the government had an extra year and still haven’t done it. I believe there is something going through the courts at the minute querying wether the umbrella companies are correct in taking employers NI from our wages. If that goes in the workers favour they will have millions of pounds needing to be repaid. Can see a lot of the umbrella companies going bust if that does happen, and the money funnelled away into the directors pockets. 

That's just theft. Scumbags. 

[Thorongil]

36 minutes ago, coprolite said:

I was meaning from the contractors' perspective. There's a load of folk wisdom going around and some really unethical advice. There are a significant number that know they are at it but the majority just do whatever the norm is for their industry. 

The engagers/employers are usually the ones that benefit most from the cost savings and i ahree theyshould be taking proper advice. Not from lawyers though, they will give overpriced waffle. Much better to go with an accountancy firm... 

 

There is no cost saving for the employers though. Daily rates haven’t reduced as a result of IR35. 

[Thorongil]

44 minutes ago, IrishBhoy said:

That’s fair enough but I am being treated like a full time employee, paying slightly more tax, but getting none of the benefits. I get no holiday pay, sick pay, pension contributions and I could get tapped on the shoulder at 4pm on a Friday and told I’m out a job. 
 

I believe the VAT was a slight dodge, something to do with working on diesel rolling stock meant we claimed 20% and kept 13.5%. Im not upset about paying my fair share of tax, but forcing contractors to get paid through shyster umbrella companies with no regulation is not right. 

You’ll be getting a higher rate of pay though than employees. That’s the contracting deal, higher pay in lieu of benefits and security. 

For a long time the benefit was double bubble because of the tax rules.