being charged because I don't want to be 'tax efficient'
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  1. #21

    Godlike

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    Quote Originally Posted by Jessica@WhiteFieldTax View Post
    I'd disagree. There are as many companies where IR35 is miles away, eg builders and hairdressers, where there are low salary hi divi arrangements.

    The real easy way would be a information request to one or two of the large agencies:

    ~ names of limited companies you've paid
    ~ amounts

    Its a source of amazement to me this hasn't been done...

    To make that more sophisticated, cross reference to the accountant they use and "mystery shop" to find out how much IR35 advice they give at the outset and how they advise clients - theres one big player, who don't post on here, who effectively advise (or were) their clients to ignore IR35.

    Then go cherry picking... weak agency contract, equals weak notional contract, accountant who hasn't got their clients doing due diligence - ouch.
    Allegedly, HMRC aren't as stupid as they make out , so this is more like it.....focusing on larger agencies would be sensible.

  2. #22

    Nervous Newbie


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    Default RTI

    RTI is definitely the spur for the change in approach. I suspect the additional cost they want to impose brings their fee up to the same as their competitors charge, so perhaps it's a good deal anyway, vertainly not worth the hassle of moving.

    Quote Originally Posted by TheFaQQer View Post
    I suspected that was the case, but the clause is in the contract. I guess it depends on when they wrote that contract - they may have just been always trying this kind of thing.

  3. #23

    I live on CUK

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    Quote Originally Posted by BlasterBates View Post

    For most real small Ltd companies, actually directors pay themselves a normal salary, so by suggesting this isn´t feasible just kind of emphasises the Ltd as a tax avoidance vehicle for IT contractors.
    No they don't.

    Plenty of small business people who go limited are given the advice to go the small salary/dividend route.

    If they employ people, have subcontractors or deal with supplies it means they can control their cash flow better.

    And yes I do know accountants who deal with some of them and some of these business people.
    "You’re just a bad memory who doesn’t know when to go away" JR

  4. #24

    More time posting than coding


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    Quote Originally Posted by BlasterBates View Post
    We don´t know the criteria by which HMRC select targets, but given the very limited information available to them in a computer search on tax records, targeting directors of Ltd companies with salaries below 8 grand year would be a very simple "search and destroy" tactic.
    This might help...

    http://www.uk.capgemini.com/insights...C-70873BEB36BE

    I left 5 years ago just as this project was starting, But it looked fascinating. Dettica is a tool used by the intelligence services to find hidden links in huge data sets. from reading other articles around the web HMRC as using it to build a whole picture of you as a taxpayer. presumable all the data frm your return... What divs you taken what your expenses are, what you submitted in previous years SA, CT, VAT. etc, I wouldnt be suprised if they have banking data in there now given theyve got the offshore countries to open up.

    Its the exact logic we dont know, but i would hazard a guess it prioritises on how much tax can be collected by an individual inspector if they come to look at you. So in year 1 to 3 youll not get investigated, but if you are in year 10 and have a potential £100,000k of "things the system has flagged" you might get investigated.
    Signed sealed and delivered.

  5. #25

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    Quote Originally Posted by IR35FanClub View Post
    This might help...

    http://www.uk.capgemini.com/insights...C-70873BEB36BE

    I left 5 years ago just as this project was starting, But it looked fascinating. Dettica is a tool used by the intelligence services to find hidden links in huge data sets. from reading other articles around the web HMRC as using it to build a whole picture of you as a taxpayer. presumable all the data frm your return... What divs you taken what your expenses are, what you submitted in previous years SA, CT, VAT. etc, I wouldnt be suprised if they have banking data in there now given theyve got the offshore countries to open up.

    Its the exact logic we dont know, but i would hazard a guess it prioritises on how much tax can be collected by an individual inspector if they come to look at you. So in year 1 to 3 youll not get investigated, but if you are in year 10 and have a potential £100,000k of "things the system has flagged" you might get investigated.
    Which actually confirms point that the more you avoid the more likely they are to come sniffing round. This just confirms my feeling that the OP has a point. When this intelligence thing pops up targets it is pretty clear that the high divi´s low salary option will be a bigger flag than high salary low divi´s.

    Of course it is speculation so everyone of us will have different view point, only a tax inspector can tell us.
    Last edited by BlasterBates; 16th March 2013 at 13:54.
    Author of the best seller "How to get Poor quickly"

  6. #26

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    Quote Originally Posted by BlasterBates View Post
    Which actually confirms point that the more you avoid the more likely they are to come sniffing round. This just confirms my feeling that the OP has a point. When this intelligence thing pops up targets it is pretty clear that the high divi´s low salary option will be a bigger flag than high salary low divi´s.

    Of course it is speculation so everyone of us will have different view point, only a tax inspector can tell us.
    Lots of people close their company down, and open up another a year later or play around with directors.
    "You’re just a bad memory who doesn’t know when to go away" JR

  7. #27

    Contractor Among Contractors


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    I believe my ir35 investigation was instigated after I made a minor error in my p35 and then corrected it. If I had not corrected it I doubt they would have picked it up.

    I passed the investigation by the way, even though I had been at my sole client for 6 years. (I was direct).

  8. #28

    Ddraig Goch


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    Quote Originally Posted by Archangel View Post
    I believe my ir35 investigation was instigated after I made a minor error in my p35 and then corrected it. If I had not corrected it I doubt they would have picked it up.

    I passed the investigation by the way, even though I had been at my sole client for 6 years. (I was direct).
    Archy - Did you have PCG/QDOS insurance to take up the case on your behalf?
    Rhyddid i lofnod psychocandy!!!!

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