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

[Munchers]

I think I'm about to lose a IR35 challenge. I understand that HMRE can go back 6 years but what I'm not clear on is when would the 6 years start from. At the moment they're looking at my 2012/13 accounts so my options seem to be:

1. 2012/13 and previouys 5 years;
2. As we are in 2014/15 and they will make the decision in 2014/15 then 2014/15 and previous 5 years;
3. 6 years back from the date they inform me that I am a IR35 fugitive;
4. Something theie make up as it suits them!

Also, does HMRE negoitate on settlement or does it just calculate what it believes you owe and hits you with the bill with no scope for discussion?

Any advice would be welocme.

[TheCyclingProgrammer]

Why do you think you're about to lose? Who is representing you? (not sure this is the right forum either, should probably be in Accounting/Legal main forum).

[Clare@InTouch]

Do you have an accountant? Any legal representation? PCG membership? Insurance?

[cojak]

HMRE??

Anyway, Your IR35 is reviewed on a contract-by contract basis, so unless you were working for a client for all of the previous 6 years I can't see how you are being challenged.

All of the previous questions from CP and Clare apply and also - how many contracts have you had, AND did you get any of those contracts reviewed AND did you not work as a business on your own account?

Or were you first made aware of IR35 when you opened the brown envelope?

[Munchers]

Yes have accountant - not really helpful.

Got a tax consultant through insurance - sacked him after a month as he just wasted our time. He applied for extensions without talking to us as he wasn't ready! He sent a first draft 24 hours before deadline - then we found out he applied for a second extension.

Approached other consultants (from this site) who were excellent to talk to but wouldn't take on case as insuffieicent time to prepare proper response. Finally got another tax consultant who prepared our final letter but truth is very unlikley to win - two contracts over 6 years and tick most of HMRE's boxes for disguised employee!

Facing up to worse case scenario but know that the later the 6 year rule kicks in the better for us as last two years have been quite light.

Can you move this thread please as suggested.

[TheCyclingProgrammer]

What boxes do you think you've "ticked"? Were you aware of IR35 when you signed those contracts? Did you have them reviewed at the time?

Which of the three main pointers to being inside IR35 do you think you've failed on?

* Direction and control
* MOO
* Right of substitution

HMRC need to show that you fail on all three accounts. Are you saying that for both contracts, all of the following applied?

* The client was obliged to provide you with work even if there was anything to do, or you were obliged to take new work from the client?
* The client exercised sufficient direction and control over how you performed the work; this could include a number of factors such as dictating how the work is done, where it is done, your working hours, being made to do things that only employees would normally do etc.
* You were not allowed to use a substitute

Do *you* think you were really a disguised employee? And if so, why did you not operate inside IR35 and make deemed payments or take all of your earnings as a salary?

[cojak]

Have a look at these 2 articles:

How to handle an IR35 investigation

How will I know if I am caught by IR35 and what will it cost me?

(They come from here: IR35 Legislation - Advice, Help and Information for UK Contractors)

[Clare@InTouch]

You only need one factor to put you outside, even if you have a dozen against you. Are you absolutely certain you cannot argue on the grounds of Control, Personal Service or lack of Mutuality of Obligation?

How far HMRC can go back can depend on what they find, and how honest you've been.

Personally, I'd recommend getting in touch with Assured Tax Consulting, run by Dave Smith formerly of Accountax. He's the one I would want on my side in a dispute.

[TheFaQQer]

Look on the bright side - at least you didn't take the offshore route you were talking about three years ago

[TheFaQQer]

Got a tax consultant through insurance - sacked him after a month as he just wasted our time.

What is the point of taking out insurance for this, and then terminating it as soon as you need it?

Something doesn't sound right here.