IR35 investigation

[ckms]

Hi. Has anyone reading this ever actually been investigated for IR35 or do you know anyone who has?

I am of course extremely diligent & careful to ensure I remain within the rules but on speaking to accountants and other contractors the reality is that unclear legislation has led to insurance companies scaremongering contractors into taking insurance to protect against something that is unlikely to be looked at and even less likely to lead to any action. I must again stress that I have done everything in my power and knowledge to stay on the right side of this subject but I just wonder how real ghe threat is for us? Thank you

[tractor]

...

Hi. Has anyone reading this ever actually been investigated for IR35 or do you know anyone who has?

I am of course extremely diligent & careful to ensure I remain within the rules but on speaking to accountants and other contractors the reality is that unclear legislation has led to insurance companies scaremongering contractors into taking insurance to protect against something that is unlikely to be looked at and even less likely to lead to any action. I must again stress that I have done everything in my power and knowledge to stay on the right side of this subject but I just wonder how real ghe threat is for us? Thank you

The threat is real. Investigations have been increased over the last year.

It is real in the context of it is unlikely that when driving, you will hit someone crossing the road and the more care you take, the less likely it is. But you still need insurance.

[PerfectStorm]

I read online the other day that HMRC had won 8 (!) IR35 cases that the PGC had taken them on with: How workers across Britain are becoming 'companies' to cut their tax rate to 20%' | This is Money

[TheFaQQer]

Hi. Has anyone reading this ever actually been investigated for IR35 or do you know anyone who has?

There are a few on here who have.

I worked with someone who claimed to have lost one and won one, but whether that is true or not I don't know.

If you think it's an insurance scam then don't pay for insurance - no-one is forcing you to do that, and many people don't have insurance or IPSE membership or anything like that. Indeed, many freelancers operating via a limited company are completely unaware of IR35.

You pays your money and takes your choice.

[TheFaQQer]

I read online the other day that HMRC had won 8 (!) IR35 cases that the PGC had taken them on with: How workers across Britain are becoming 'companies' to cut their tax rate to 20%' | This is Money

That was two years ago. I suspect that the percentage of cases won by IPSE is now higher than that. IIRC, Qdos boast a similarly high percentage win as well.

HMRC have said that they are going to increase the number of investigations, though, and I wonder how many they win out of those that aren't contested by a professional representative.

[BolshieBastard]

Hi. Has anyone reading this ever actually been investigated for IR35 or do you know anyone who has?

I am of course extremely diligent & careful to ensure I remain within the rules but on speaking to accountants and other contractors the reality is that unclear legislation has led to insurance companies scaremongering contractors into taking insurance to protect against something that is unlikely to be looked at and even less likely to lead to any action. I must again stress that I have done everything in my power and knowledge to stay on the right side of this subject but I just wonder how real ghe threat is for us? Thank you

I read online the other day that HMRC had won 8 (!) IR35 cases that the PGC had taken them on with: How workers across Britain are becoming 'companies' to cut their tax rate to 20%' | This is Money

Isnt any insurance taken out to protect one from something unlikely to ever happen? As regards unlikely to lead to other action, OK they may not have won many investigations yet but the action of investigation, whether you have insurance or not is lengthy and a cause of concern for anyone investigated. I wouldnt believe any contractor who upon being investigated says they were never concerned or didnt have some sleepless nights while it was open.

Not sure if the number won was only 8 but I suspect under the current growing regime, a lot of contractors are going to find themselves caught, especially those who have become part and parcel of the organisation if they've been at one client continuously for many years.

Also, in the public sector, government's FUD is driving compliance more with their off payroll \ £200 pd. I know a lot of contractors say they have had their contracts changed and reviewed but as this is a central plank of government policy. it would not surprise me if some action is taken retrospectively against these contractors as the government's policy is well known.

Should you get insurance? Depends on your risk assessment but, accountancy bills can get very big very quickly if you are paying this bill out of your own pocket.

[tractor]

..

Isnt any insurance taken out to protect one from something unlikely to ever happen? As regards unlikely to lead to other action, OK they may not have won many investigations yet but the action of investigation, whether you have insurance or not is lengthy and a cause of concern for anyone investigated. I wouldnt believe any contractor who upon being investigated says they were never concerned or didnt have some sleepless nights while it was open.

Not sure if the number won was only 8 but I suspect under the current growing regime, a lot of contractors are going to find themselves caught, especially those who have become part and parcel of the organisation if they've been at one client continuously for many years.

Also, in the public sector, government's FUD is driving compliance more with their off payroll \ £200 pd. I know a lot of contractors say they have had their contracts changed and reviewed but as this is a central plank of government policy. it would not surprise me if some action is taken retrospectively against these contractors as the government's policy is well known.

Should you get insurance? Depends on your risk assessment but, accountancy bills can get very big very quickly if you are paying this bill out of your own pocket.

Good post!

More to the point, once an investigation has started, good luck with getting your insurance then!!

[tractor]

...

That was two years ago. I suspect that the percentage of cases won by IPSE is now higher than that. IIRC, Qdos boast a similarly high percentage win as well.

HMRC have said that they are going to increase the number of investigations, though, and I wonder how many they win out of those that aren't contested by a professional representative.

I suspect that one of the key reasons for the increase in investigations is to retrospectively claim back some of the credibility they undoubtedly lost at the HoL and Select Commitee reviews.

[LisaContractorUmbrella]

I don't think you can rely on stats put out by any interested party when it comes to IR35. IMHO there are far more than are publicised as most people would be more likely to settle than to fight HMRC in court especially as the chances of getting your costs back, even if you win, are pretty slim

[Archangel]

I was investigated and used my PCG funded advisors to fight my corner and won after around 18 months.

A fellow contractor at the same client had the same experience with the same outcome.