PPRuNe Forums - View Single Post - IR35
Thread: IR35
View Single Post
Old 26th Nov 2017, 08:48
  #3 (permalink)  
Daysleeper
 
Join Date: Oct 2003
Location: n/a
Posts: 1,425
Likes: 0
Received 0 Likes on 0 Posts
HH catches the main points.

Turning it around... you are possibly at more risk now than in the event of a change. If you are supplying your services via your own ltd company you are responsible for getting your tax status correct, get it "wrong" and you are liable for the back taxes fines etc etc. In the public sector it is now the Public Sector Body which is responsible. If they say you are out and HMRC later prove you not to be then the PSB is liable for the tax, fines etc. This is part of what has driven the risk averse approach of many PSBs.

Thinking of your status now. This is based on my own research in a non-aviation field. IR35 is really complicated so get some proper advice!

However, the three critical tests for IR35 are:

1/ Substitution
2/ SDC (Supervision / Direction / Control)
3/ Mutuality of Obligation

So:

1: As a "freelance flying instructor (or airline pilot) working via your own limited company do you have the contractural right to send someone else to do your work. If you do then exercising that right regularly is a great benefit.

2: Is how you work laid down for you by the contracting organisation. Do you have specific report times, are you performance managed or supervised by a line manager, do you work to an ops manual. Can you be swapped from one task to another without formal contract changes.

3: Do you have to accept work from them (e.g. turn up even if there is nothing to do) and do they have to pay you even though they may not have any work for you.

Nothing really has changed about those recently.

What's been seen in the public sector is even if people do pass those tests the contracting PSB has decided they are "in" anyhow. It's then very difficult to challenge those decisions.
The way the rule change was put in it was for payments after a certain date (April 2017) and not work done after that date. So people had done work, submitted an invoice and then been told they were inside IR35 and had huge chunks taken off. Some public sector bodies then refused to release payments unless their opinion was accepted. I know one consultant currently taking a client to court over it which is hardly going to get future work from them.
Daysleeper is offline