[varispeed]

It is classist.

The rule set was sharpened the moment skilled workers realised the agency / consultancy was charging £2k a day for their labour while paying them £60k a year, and decided to leave on Friday and invoice on Monday. Same desk. Same client. Same work. The only difference was that the margin stayed with the person producing the value instead of flowing to partners and shareholders.

That is when it became “disguised employment”.

When a multinational intermediary inserts itself and captures the spread, that is respectable commerce. When a one-person company does the same and keeps the surplus, it is suddenly suspicious and requires a special anti-avoidance regime.

You can hide behind control tests and contractual nuances, but the economic reality is identical. The variable that changes is who captures profit.

If a rule only becomes urgent when labour tries to behave like capital, that is not some sterile legal tidying exercise. That is class politics dressed up as “compliance”.

[scott_w]

> The rule set was sharpened the moment skilled workers realised the agency / consultancy was charging £2k a day for their labour while paying them £60k a year, and decided to leave on Friday and invoice on Monday. Same desk. Same client. Same work. The only difference was that the margin stayed with the person producing the value instead of flowing to partners and shareholders.

Right, so you're talking about IR35 specifically. This has nothing to do with "Uberisation" at all because the working arrangement and contract structure are completely different. It's also got fuck all to do with "classism" because it's 100% about tax.

First off, IR35 does not apply to self-employed workers, it only applies to a worker contracting via a limited company.

Second, it looks at how many "clients" you have. A limited company of 1 contracting to multiple clients is outside the scope of IR35 because, like your plumber, they are a business and not an employee trying to reduce the amount of tax they pay.

Thirdly, IR35 companies are allowed but they must operate in a specific way (that makes them not worth the hassle for the most part).

> That is class politics dressed up as “compliance”.

No, it's just about tax law.

I don't know why you needed to write 6 paragraphs when a simple "I don't know what the fuck I'm talking about" would have been much quicker for you to write and for me to read.

[varispeed]

> First off, IR35 does not apply to self-employed workers, it only applies to a worker contracting via a limited company.

You are using class-loaded language. Nobody says a worker is “operating via” a Big Four consultancy, but when it is a one-person company, suddenly it is framed as some artificial wrapper.

It is a recognised form of self-employment under UK law, where a person runs their own company to contract for work in their own right, on the same legal footing as any other incorporated business.

And IR35 is not confined to one-person outfits either. Its scope extends beyond the caricature of a lone contractor “gaming” the system.

IR35 is not determined by how many clients you have. It is driven by the ownership structure of the company providing the services. The legislation applies where the individual delivering the work has a material interest in that company, typically 5% or more.

> Thirdly, IR35 companies are allowed but they must operate in a specific way (that makes them not worth the hassle for the most part).

It amounts to saying you are free to run your own company, right up to the point where doing so allows you to retain the full commercial value of your labour rather than routing it through an approved intermediary.

Those restrictions are designed around companies owned by the worker delivering the service. The same structural suspicion is not applied to firms owned by external shareholders supplying labour in similar conditions.

When the rule set specifically constrains worker-owned businesses while leaving non-worker-owned ones operating freely, that is not accidental. It is a deliberate design choice that limits upward social mobility.

It is also not accurate to say IR35 has nothing to do with wider labour trends, because tax rules shape how work is structured in practice; many gig and platform workers are required to set up limited companies, and once labour is channelled into that model, the IR35 framework directly affects them, so drawing a hard line between “tax” and “Uberisation” ignores how policy design influences the real-world organisation of work.

[scott_w]

> You are using class-loaded language. Nobody says a worker is “operating via” a Big Four consultancy, but when it is a one-person company, suddenly it is framed as some artificial wrapper.

This is not classist, you're conflating 2 very different things.

A one-person company who consults for multiple clients, provides their own equipment and sets their own working hours (I have literally worked with people like this) do not fall into IR35. Whether they speak in RP, Cockney, Geordie or Scouse has no bearing on this. How much money they earn has no bearing on whether they fall into the scope of IR35.

> IR35 is not determined by how many clients you have. It is driven by the ownership structure of the company providing the services. The legislation applies where the individual delivering the work has a material interest in that company, typically 5% or more.

This is only part of it. Other criteria include right of substitution, ability to set working hours and location. Clearly a consultancy firm that provides services by multiple workers for multiple clients is very different from an individual who:

- Provides services to one client for 4 years

- Has to (in your own words) sit at the same desk as an employee

- Has to follow set hours

- Has to use equipment provided by the client

- Cannot ask another person to take over their work.

When the facts are different, the rules that are applied are different.

> Those restrictions are designed around companies owned by the worker delivering the service. The same structural suspicion is not applied to firms owned by external shareholders supplying labour in similar conditions.

Because they're two completely different types of contract and working arrangements.

> It is also not accurate to say IR35 has nothing to do with wider labour trends, because tax rules shape how work is structured in practice

I didn't say that they don't. Law and working arrangements obviously feed back into each other, it's the reason IR35 came about in the first place.

> many gig and platform workers are required to set up limited companies, and once labour is channelled into that model, the IR35 framework directly affects them, so drawing a hard line between “tax” and “Uberisation”

They're two different topics that sometimes have overlap, depending on the nature of the working arrangements.

[varispeed]

> A one-person company who consults for multiple clients, provides their own equipment and sets their own working hours (I have literally worked with people like this) do not fall into IR35. Whether they speak in RP, Cockney, Geordie or Scouse has no bearing on this. How much money they earn has no bearing on whether they fall into the scope of IR35.

You are misunderstanding what IR35 is: the rules bite because the person doing the work has a material interest in the company that contracts to provide it, and then each engagement is assessed in isolation for deemed-employment status; you are conflating that trigger with the status test itself, and “multiple clients / own equipment / flexible hours” is not some automatic escape hatch, nor does the number of clients change the outcome of a given engagement’s assessment.

> This is only part of it. Other criteria include right of substitution, ability to set working hours and location. Clearly a consultancy firm that provides services by multiple workers for multiple clients is very different from an individual who:

Large consultancies routinely embed the same named individuals at the same client for years, on client kit, during client hours, with no practical substitution, and no one performs a hypothetical employment test on the firm itself. The difference is not the day-to-day reality of the work, which can be identical. The difference is that IR35 is only activated when the company supplying the labour is owned by the person doing the labour. That asymmetry is deliberate.

> Because they're two completely different types of contract and working arrangements.

They are not “completely different” in substance. You can have the same embedded role, same hours, same client equipment, same multi-year engagement. The decisive difference is ownership of the supplying company. The regime is constructed so that when the worker owns the company, a deemed-employment test is imposed; when external shareholders own it, it is not.

[scott_w]

> “multiple clients / own equipment / flexible hours” is not some automatic escape hatch

I never said the escape hatch was automatic. The number of questions in the HMRC questionnaire make it clear that there's no 1 trigger either way.

> Large consultancies routinely embed the same named individuals at the same client for years, on client kit, during client hours, with no practical substitution, and no one performs a hypothetical employment test on the firm itself.

Because both the contract and working arrangements are different. The consultancy absolutely can substitute one worker with another of equivalent qualifications.

> The difference is that IR35 is only activated when the company supplying the labour is owned by the person doing the labour. That asymmetry is deliberate.

It's deliberate because the nature of the working and contractual relationship is different. I really don't get what's so difficult about this so let me break it down.

In an IR35 in-scope arrangement, the one-person limited company would otherwise pay themselves up to the income tax exemption threshold. They would then take a dividend for the rest of the payment, which isn't subject to NI payments, reducing revenue intake to the government.

In a large consultancy that's contracting staff to work at companies, there are two clear relationships that are different:

1. The contract with the client, where a fee is paid to the consultancy for the work of their employees.

2. The employment contract with the person embedded in the client. This person is paid their salary and, as such already pay income tax and NI.

Can you see how it makes no sense for the consulting company to pay extra tax and NI for the contract with the client?

If you can't understand the difference, and insist that it's based on some class warfare, I really don't think any human on earth has the words to convince you of something so simple, my accountant explained it to me in about 2 minutes when I first asked him about IR35.

[varispeed]

You say the consultancy “absolutely can substitute one worker with another.” In practice, clients regularly contract for named individuals, reject substitutes, and retain the same person for years. But it does not matter, because the substitution test is never applied to them. A one-person company in identical working conditions has to defend its right of substitution. A large firm placing a single named worker in the same arrangement is never asked the question.

Now the tax argument. Picture three people sitting next to each other doing the same job at the same client. One is employed directly on £70k. One works for a large consultancy, earns £60k, and has no idea the consultancy charges £2k a day for their labour. One runs their own company and charges £600 a day. The employee pays income tax and NI on £70k. The consultancy worker pays income tax and NI on £60k, while the consultancy captures the spread and, being a multinational, routes the margin offshore paying little or no UK tax. The small business owner pays themselves a salary, corporation tax on profits, and dividend tax on what they take out - and spends the margin locally.

From a pure tax yield perspective, the small business owner generates the most revenue for the Treasury and the most benefit for the local economy. The large consultancy generates the least. Yet the entire framing of IR35 is designed to make the two employed workers resent the business owner for “not paying their fair share,” while the consultancy quietly extracting the largest margin and contributing the least tax is never part of the conversation. Paying through dividends and salary is not avoidance, it is the normal mechanics of running a limited company, which exists precisely because PAYE was not designed for how independent businesses operate.

If a large consultancy places a single named worker at one client, on client equipment, during client hours, for four years, with no practical substitution ever exercised, why is that firm not subjected to the same deemed-employment assessment that a one-person company would be in identical circumstances? Because the legislation is scoped by ownership. It activates when the person doing the work also owns the business providing it. A worker who builds and runs their own company is treated as inherently suspect. A separate corporate entity extracting the same margin from the same labour is not.

If you think that framing is wrong, explain why the ownership trigger exists rather than a universal status test applied equally to all companies supplying labour. That is the question.