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

[northernladuk]

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.

But he doesn't say that. The extension is still a contract.

[northernladuk]

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..

Yes it can. It can be just seen as a paper trail during disguised employment just as it did in the JLJ case.

[centurian]

But really confused why so many went in the attack.

Because many believed (and quite a few still suspect) that you are a troll or a sock puppet, intending to wind people up - it's happened many, many times before. The case for the prosecution is that you have had an investigation that has gone on for such a long time, yet still display a puzzling lack of understanding of many of the intricacies of IR35 - even when so much is at stake.

If I had the brown envelope arrive, by the end of the month, I would be an IR35 expert. I would read every document available, scrutinise every single court judgement, shoe size of the judge etc.

Also very basic errors, such as repeatedly using the acronym HMCE (which simply doesn't exist) just fuels the evidence that you are troll, rather than a sock puppet of an existing forum member (we've had one here from mumsnet before winding us up).

Having said all that... on the assumption you are not a troll.

I've contracted for over a decade and recognised IR35 was a risk although had been assured that contracts were IR35 proof. Nevertheless I took insurance each year for specialised support if HMCE came calling.

This is the crux of your problem. You haven't bothered to become an IR35 expert because you didn't think you needed to.

Firstly, an IR35 proof contract doesn't exist - simple as that. The law is phrased in such a woolly fashion that any contract could be deemed inside depending on the interpretation.

Secondly, I have long had a particular beef with tax avoidance insurances - mostly because I think it causes the person to become complacent, thinking they are bullet proof. But there are cases when insurers either refuse to pay out altogether (ask Gary Barlow), or provide an inadequate service - after all, you are the one left holding the can.

[ChimpMaster]

Yes it can. It can be just seen as a paper trail during disguised employment just as it did in the JLJ case.

Except you totally ignored my next paragraph....

[northernladuk]

Except you totally ignored my next paragraph....

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.

[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....

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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.
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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.

[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.

[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.

[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.

[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.