To Be In Business On Your Own Account

Be aware this case is about journalists, however it shows how widely the court looks at your life, it says beware of thinking you will be judged solely on your current or one past contract in isolation.

https://www.devereuxchambers.co.uk/resources/articles/view/business-on-own-account

that said, if you are not and you follow these guides you effectively will be.

Then sadly you are someone’s employee and you are not in business on your own account. Any business that fails to attend to its needs beyond servicing a service contract is “fiddling while Rome burns”. Business survival demands business operations are not neglected - and this weakness is a vulnerability HMRC will leverage to its never ending advantage. They will easily demonstrate you are a simple employee.

How will they demonstrate this? Evidence. All they need is show that all you do is your “employment work” and little or nothng else. That no business decisions are made, there are no business policies or directions and in past cases that you do not know what a “dividend” is or the duties and responsibilities of a director. How? Principally by asking you and using your answers aganst you. The person asking you ca me an office of HMRC, or a Judge or a Barrister in court. The result is the same if you do not know what you are talking about. Answering with truisms will be seen straight through.

Truism? For example “for what are you responsible?” ans: “I know I am responsible for everything”. That answer tells all present you probably have little idea at all for what you are responsible. It is a “truism”.

“It’ll never happen”. Maybe not. If it does you can lose everything you have (bankruptcy). I take the view in life that where I find the consequences of failure unacceptable, I act to protect myself. I view not doing this is downright foolish. Perhaps I should say “unwise”.

I regret under the M.S.C. legislation you are likely to be in deep trouble if spotted by HMRC; it may be your service provider who is spotted which then leads to you.

This is a very nasty piece of legislation and in my opinion completely unfair in the present day. However, roughly speaking they are saying you are paying for someone else to run your company like it is a payroll operation - and so they charge you p.a.y.e. on everything.

It’s worse than IR35. Paying for everything to be done for you is said to be having made your company a “managed service company” and your provider a “managed service provider”. I gather some firms of accountants refuse to take on contractors for this reason.

Prove it.

Show me the evidence.

It’s paperwork. Documents. Signed and dated.

It’s also witness testimony, but from what I have read in judgements in this regard these tend to be at best weak and at worst counter to your case, in spite of the best intentions of the witness.