IR35 - Guilty as charged! - Updated May 2016 - NOT GUILTY!

[northernladuk]

No, another contractor was which HM caught and are fining the business- I suspect they weren't declaring this.

I hope to god you don't have to submit any written evidence for your case.

[Munchers]

Just to make sure I understand this right - you were/are being paid directly into your personal bank account? There's no other entity between you and the end client?

No, another contractor was which HM caught and are fining the business- I suspect they weren't declaring this.

[tractor]

.

Just to make sure I understand this right - you were/are being paid directly into your personal bank account? There's no other entity between you and the end client?

The OP did day 'they found a contractor'

That is not quite the same as 'Me'

But for the avoidance of doubt OP, was it you???

[northernladuk]

Oh dear oh dear. If there are basic mistakes being made on fundamental issues how many others are going to come out of the woodwork I wonder. Are these two contracts with the same client and have you only ever had one client?
You are aware of the 24 month rule? 😜

[GazCol]

Not sure. Seems to come down to two views:

1. Tip off to HMRC
2. HMRC looked at business where I'd contracted and I hear they found a contractor being paid direct into personal bank account.

My guess is 2. and they've drilled down to other contractors now.

Just to make sure I understand this right - you were/are being paid directly into your personal bank account? There's no other entity between you and the end client?

[Munchers]

To clarify, investigation only started about 6 weeks where they asked for info evidence to as to why I was outside IR35. They're looking at one year only but I was trying to establish my risk ie how many years.

I was aware of IR35 and knew the risks. I took as many steps to protect myself as I thought I could. Ultimately I had a choice, contract and accept some risk or go and work for someone else. I made a decision to contract, even with IR35 it was more lucrative. It was the right decision for me.

I have had two contracts over the last 6 years. The last contract was rolled on every 6 months as I was asked to do more work. I realise now and accept this is a basic mistake, I should have got a new contract signed each time.

Not sure why I'm a troll, ignorant or naive maybe but not a troll. Anyway ....... I'll keep trying to work.

[TheFaQQer]

No it wouldn't; not necessarily anyway. It could just as well be that the OP got a 12 month contracted (not unusual) extended twice. Or a six month contract extended five times.

Or one contract for five years and one for one year. Or one for four years and one for two years.

etc.

[tractor]

...

I have always understood that 6 years was how far back HMRC can expect to see records for, not how far back they can investigate or demand tax/penalities. Furthermore, because this dates from when the last return was submitted, and because HMRC have 12 months from that point to query it, the advice is often simplified to saying that all records must be kept for at least 7 years.

So in the OP's case if they had 2 x 3-year contracts with the same client, separated say by a year, and records were made available to HMRC then both could be assessed to be inside IR35 (if HMRC decided) and tax demanded regardless of whether they fell entirely inside the 6-year window.

Of course the above is unqualified advice. Professional advice should be sought from someone with a track record in defending IR35 cases (several have been mentioned in this thread). That advice might include, for example, to cooperate with the enquiry only in so far as providing contractual documents for the most recent contract.

They can only ask for 6 years previous to the current one I think. Then if they find anything wrong, they can go back 20.

[Contreras]

I have always understood that 6 years was how far back HMRC can expect to see records for, not how far back they can investigate or demand tax/penalities. Furthermore, because this dates from when the last return was submitted, and because HMRC have 12 months from that point to query it, the advice is often simplified to saying that all records must be kept for at least 7 years.

So in the OP's case if they had 2 x 3-year contracts with the same client, separated say by a year, and records were made available to HMRC then both could be assessed to be inside IR35 (if HMRC decided) and tax demanded regardless of whether they fell entirely inside the 6-year window.

Of course the above is unqualified advice. Professional advice should be sought from someone with a track record in defending IR35 cases (several have been mentioned in this thread). That advice might include, for example, to cooperate with the enquiry only in so far as providing contractual documents for the most recent contract.

[ChimpMaster]

No I didn't. Just pointing out your first paragraph gives one view of how multiple extensions look which isn't the whole picture. Just pointing out the other possibility.

Given that I wrote both paragraphs in one post, I did intend both to be taken together....

------------------
And that shows good business: being able to win multiple renewals shows that you are good at the job and the client wants to retain your business. It doesn't make you a pseudo-employee.

At all times though you have to keep yourself distant from the employer/employee relationship, and that's what might become 'lost' over the years. So long as you differentiate yourself throughout, in some way or form, then you will be OK. For example, I have certain things that I do differently to employees - I work at home a lot, I choose my hours, I say No when I want, I am a point-expert, I don't take holidays (OK...maybe a few days a year), and I manage my own area of work.
-------------------

I could also have added that it's good to change your contract to be focused on a different, specific task or project at each renewal.

Anyway I have contract work to get to now ... at home ... so speak later.