Reply to post: Re: Do the right thing

Contractors slam UK taxman's 'aggressive' IR35 tax reforms

Doctor Syntax Silver badge

Re: Do the right thing

In general you're right but:

"can be dismissed without notice (in real terms, you're often on what is effectively a 0-hour contract)."

No, It's your company's contract that can be terminated without notice. It's this confusion between the individual and company that may be at the root of the entire problem and certainly enables HMRC to get away with it. The very first thing to do when going freelance is to get clear in your head what appertains to your company and what to you. The fees your company collects are not your income. They're the company's income. It can pay you a regular salary out of them and dividends at intervals, say half-yearly, but allowing the company to build up a reserve to allow salary to continue being paid when there are no engagements or you, the copmany's employee or off sick or on holiday.

Just dumping the whole thing straight from the company's bank account into yours is just asking for trouble from HMRC.

ISTR that Red Dawn's original justification for IR35 was to cut down on abuses such as zero-hours. Oddly enough they don't seem to be pursuing that with any great vigour. Could it be that they don't see great returns for effort?

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