One Fifth Of Workers Left In Limbo With CEST Failure
Since 1999, HMRC have been fighting an increasingly difficult battle against contractors and the way in which they are employed. The argument concerns directors who take on contracts through their limited company rather than as an employee. Directors would have clients pay the fees for the contract into the Limited Company; they would then take a low salary (to dodge NICs and tax) and top up on dividends meaning they pay significantly less tax than full time, permanent employees
To tackle this problem, HMRC created IR35 – a set of legislation forcing those taking advantage of the loopholes to pay the same taxes as full-time employees. Sounds fair right? Hold on; it’s not quite as simple as that.



