Jingle Jon:
Rjan:
IR35 specifically applies to directors! There are certainly cases against directors who have been found to be “employed” by their clients - albeit I don’t know whether a reported case exists involving both IR35 and also a driver (it is probably true that most occupations have not been the subject of a specific reported case).
The devil though is in the detail, notably the previous instance you flagged up fell a long way from a director who is paid as a director of her/his own company. So without providing material evidence - all we have is heresay - call me picky but I prefer reliable records which can be scrutinised and checked to see if they are valid to a specific case.
Which previous instance? You mean the First Tier Tax Tribunal case I referred to, Dhillon v HMRC [2017]? Yes it is true that the workers in those cases were not using Ltd Cos (i.e. PSCs, personal service companies). That wasn’t the point of the case - the point of the case was that they were found not to be in business.
(I’m becoming more familiar with the issue and the legal terminology involved. In the context of drivers who are directors of their own limited company and provide their own labour through the company which they direct, then the limited company is considered to be a “personal service company”.)
If you want a reference to a case that involves a worker operating through a PSC being stung for tax, then there are plenty of examples going back donkey’s years. For example, Dragonfly Consulting v HMRC [2008]: bailii.org/ew/cases/EWHC/Ch/2008/2113.html
(Also, commentary on the same case: accaglobal.com/uk/en/technic … onfly.html)
I quote from the text of the Dragonfly case (which itself quotes a judge discussing the IR35 rules):
"The legislation does not strike at every self-employed individual who chooses to offer his services through a corporate vehicle. Indeed it does not apply to such an individual at all, unless his self-employed status is near the borderline and so open to question or debate. The whole of the IR35 regime is restricted to a situation in which the worker, if directly contracted by and to the client “would be regarded for income tax purposes as an employee of the client”.
Between the two cases quoted, we have authority both for the proposition that directors of PSCs can be stung for PAYE tax on all the income they receive from the client (notwithstanding that they are directors), and authority that supposedly “self-employed” drivers are not actually in business for themselves but are employed by the owner of the wagons.
I accept I have no case to refer to which specifically involves a driver working through a PSC, but there is no reason to think drivers working through a PSC would be treated any differently from IT contractors working through a PSC (as in Dragonfly v HMRC), or that drivers claiming to be self-employed as company directors would be treated any differently from drivers claiming to be self-employed as sole traders (as in Dhillon v HMRC).
I have to apologise and say… I don’t have time to address all of your questions. In fact have to pretty much speed read… which comes with the obvious potentials…
Why bother half-reading a discussion thread, expressing a wholly unsubstantiated opinion, and then repeatedly half-replying to follow ups?
All people are busy sometimes, and some people are busy all the time, but I find it hard to understand why those supporting the driver-as-businessman theory are all busy all of the time. Being so short of time by habit, one wonders whether they ever sat down and tried to interpret the law for themselves, as opposed to just following hype or obeying past experience of what they can get away with (which may be neither legal, nor a guide to the future).
If you ever come across a case where a Co Director, who is paid through their own company - who is told they must cease trading & the company is forced to close. … I’d be very interested.
All the best.
I don’t understand how this relates to what we have been discussing. No director has ever been told to cease trading (for any reason in connection with this discussion). It is simply that the taxman may challenge the director on whether he is calculating his taxes correctly on his tax returns (whether in respect of himself or the company he trades through) - which, depending on the answer, certainly might cause the director to choose to cease trading, or cause the company to be wound up (or even the directors themselves to enter bankruptcy).
