Reply to post: Re: What you would hope for...

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

Lee D Silver badge

Re: What you would hope for...

I think you'll find their intention is to push everything that comes under IR35 to make you taxable.

In that they have succeeded in a number of ways - whether all these stories on here alone about "So I gave up and went properly employed" or otherwise, they are seeing a simpler tax structure and blanket taxation and more tax on an industry that they... well... were seeing less tax from before. And it's only cost them a small piece of admin and a couple of court cases for the borderlines.

Pretty much, they got what they wanted. Is there anyone here paying LESS tax while subject to IR35 than they were before? At the very minimum, people have moved and made the taxation of them much simpler by being subject to PAYE.

From a tax-collection-authority's point of view, I think it's a win all around. The man in the street doesn't really know or care, either. Accountants are quite happy to "take that off your hands" while handing the liability straight back to yourself too.

Now, whether that's "fair" or whatever, that's an entirely different question. Whether you can *isolate* it to just looking at the "income from IR35" box on the national tax receipts or not is largely subjective. I would say that you can't. But tax receipts have grown every year except for 2008/9/10. IR35 came in in 2000, so you can't say that it's affected their overall receipts for the negative at all.

IR35 is not there to "get money from IR35". It's there to discourage a particular way of working that can let you wheedle out of paying the tax that other methods don't. And it does that spectacularly well. Because people go out of their way to avoid being classed under IR35 if they can help it, and such "confusion" actually aids the process - people will say "I don't want to risk a huge backdated bill, so I'll make sure I'm nowhere near that". Bringing them into much more easily-taxable categories.

It never set out to make money. It set out to stop people from avoiding giving them money. And it does just that. It just doesn't appear as a little box marked IR35 on the balance sheer. It manifests itself in overall better tax receipts. I wonder how many companies are registered differently, people moved to PAYE, etc. to avoid IE35? Only HMRC would really know.

It's a deterrent law. And, judging by the comments here, it quite clearly works as everyone hates the mention of it and lots of people have stories of their money being demanded or held citing IR35. That's gonna scare off a lot of people.

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