[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.

[scott_w]

> 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.

It's a good thing that HMRC don't apply this as the only test then.

> From a pure tax yield perspective,

This is totally irrelevant to the discussion. In fact, the rest of this paragraph is irrelevant because it's just you going off on some rant you derived from a Communist Party pamphlet or something.

> Because the legislation is scoped by ownership.

Not only ownership, it's a mixture of factors. I've worked with other IT workers who fall outside the scope of IR35.

Plumbers and electricians fall outside the scope of IR35 in most situations, despite being single person limited companies. You say it's triggered by ownership structure, yet these businesses follow the same ownership structure without triggering IR35. If it's triggered by ownership structure and classism, how does this fit into your thesis?

> 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.

I already did and so did you right here:

> 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

These three situations create three completely different contracts, working structures and, thus, tax arrangements! It's wild how you seem to get it but your brain won't allow you to see the answer that's staring you in the face.

[varispeed]

The plumber example actually undermines your argument. Plumbers typically provide services to individuals, not businesses, which places them outside the scope of Chapter 10 entirely. They can self-declare as outside IR35. But if that same plumber were delivering services to a corporation meeting Chapter 10 criteria, the client would have to perform a status determination, and depending on their risk appetite they could absolutely deem that engagement as inside IR35 to cover their compliance exposure. IR35 has nothing to do with number of clients, type of trade, or whether you are a plumber or a software developer. Presenting plumbers as inherently outside IR35 by nature of their work is misleading.

You dismissed the tax yield comparison as "a Communist Party pamphlet." That is not a rebuttal. If the stated purpose of IR35 is protecting tax revenue, and the structure generating the most tax for the Treasury is the one being constrained while the structure generating the least is left untouched, then the policy is not achieving what it claims to achieve. You have not addressed this because you cannot. You say the three workers create "completely different contracts, working structures and tax arrangements" and that my "brain won't allow me to see the answer." The working structure is identical. The contracts differ because the law requires them to differ depending on who owns the supplying company. The tax arrangements follow from that. You keep pointing at the consequences of the policy and presenting them as the justification for it. That is circular reasoning.

You have repeatedly described how you think IR35 works, inaccurately in several places, while avoiding the question I am actually asking. I am not asking about the mechanics. I am asking about the design. Why does the deemed-employment test activate based on who owns the company supplying the labour, rather than being applied universally to all companies supplying labour in identical working conditions?

Resorting to personal attacks and dismissing inconvenient arguments as "rants" is not the same as answering the question.

[scott_w]

> Plumbers typically provide services to individuals, not businesses

> But if that same plumber were delivering services to a corporation meeting Chapter 10 criteria, the client would have to perform a status determination

So? You’ve spent 2 days arguing it’s about ownership structure and something about classism and now suddenly you agree with me that it’s actually about the specific nature of the contract? Make up your mind instead of just deciding what undermines my argument. You don’t even seem to understand your own.

> You dismissed the tax yield comparison

Because it’s irrelevant to what the law is trying to achieve which is to ensure an employer/employee cannot reduce the tax they pay. Whether it’s the optimal tax strategy is a different question. Given you have no clue about your own argument, I’m not going to take your word that it’s actually better to allow Inside IR35 to pay less tax.

> The working structure is identical.

There are literally three different types of contract, which creates different working structures.

> You have repeatedly described how you think IR35 works, inaccurately in several places

And yet at no point have you actually pointed out where. Instead you run victory laps.

[varispeed]

I have not agreed with you. I said the plumber providing services to individuals falls outside Chapter 10 entirely, which is why your example was irrelevant. I then pointed out that if that same plumber provided services to a corporation, they would be subject to the same status determination as anyone else, because IR35 does not care what trade you are in. You claimed plumbers fall outside IR35 because of the nature of their work. They do not. When providing services to individuals they self-declare their status, which can still be challenged. When providing services to a corporation meeting Chapter 10 criteria, the client performs the determination. The distinction is about who the services are provided to, not what the trade is. Those are different things.

Where you have been inaccurate, since you asked: you claimed IR35 does not apply to self-employed workers as though that were a meaningful distinction. You claimed number of clients determines IR35 status. It does not. Each engagement is assessed individually. You presented plumbers as categorically outside IR35 by nature of their trade. They are not, as above. You have consistently described IR35 as a simple checklist when it is an engagement-by-engagement assessment triggered by the ownership structure of the supplying company.

You say "three different types of contract create different working structures." The working structure is the day-to-day reality of how the work is performed. Three people doing the same work, at the same desk, on the same equipment, during the same hours, for the same client, have the same working structure. They have different contracts because the law imposes different requirements depending on who owns the company supplying the labour. The contract is the product of the legal framework, not the other way around.

You say the law is trying to "ensure an employer/employee cannot reduce the tax they pay." A worker running their own company is not an employee reducing anything. They are a business owner retaining the value of their own labour. The legislation starts from the assumption that a worker's natural state is employment and their company is an artificial structure to be looked through. That assumption is never applied to any other type of business. Nobody asks whether a consultancy's corporate structure is artificial, or whether its employees would be the client's employees "if engaged directly." The question is only asked when the worker owns the business, because the underlying assumption is that workers do not legitimately own businesses - they merely operate through them. That is the class assumption I have been describing from the start.

Same question, still unanswered: why is the test scoped by ownership of the supplying company rather than applied universally?