Inside IR35 tax Liability

[eek]

Just to clarify something, did they actually send you a copy of the SDS, or did they just send you an email saying "Yes, you're definitely outside"?

That is useful to know as it may help to answer who is liable but it doesn’t impact the OPs problem - which is that the tax on the payments he has already received is not his responsibility to pay

Oh and could the OP keep us up to date.

[Keanu2020]

Just to clarify something, did they actually send you a copy of the SDS, or did they just send you an email saying "Yes, you're definitely outside"?

Role was advertised as outside on both recruitment agents (and others) websites. Contract states outside and confirmed this in calls and in writing during onboarding. But no formal SDS was issued. The issue only came to light when it was renewal time and a new SDS was issued on internal gov mail account. Gov end user was not to impressed with recruitment firm as paying high fees to avoid these issues.

[eek]

Role was advertised as outside on both recruitment agents (and others) websites. Contract states outside and confirmed this in calls and in writing during onboarding. But no formal SDS was issued. The issue only came to light when it was renewal time and a new SDS was issued on internal gov mail account. Gov end user was not to impressed with recruitment firm as paying high fees to avoid these issues.

In which case there is a paper chain nightmare regarding who is liable here so you really do need to protect yourself.

For want of an email chain someone is going to be a lot of money down and it's now a matter of

1) working out who has a very large bill to pay
2) ensuring none of it ends up on your doorstep.

[Keanu2020]

In which case there is a paper chain nightmare regarding who is liable here so you really do need to protect yourself.

For want of an email chain someone is going to be a lot of money down and it's now a matter of

1) working out who has a very large bill to pay
2) ensuring none of it ends up on your doorstep.

I'm assuming the issue is helped by both end client in writing saying not my mistake and recruitment agent putting in writing its their fault. It’s the resolution though that’s the issue (me paying the most). No surprise the recruitment firms refused to let me in the room while they worked it out, and then just notify HMRC with Voluntary Disclosures, telling me after the fact I now have a tax bill coming.

[Keanu2020]

That is useful to know as it may help to answer who is liable but it doesn’t impact the OPs problem - which is that the tax on the payments he has already received is not his responsibility to pay

Oh and could the OP keep us up to date.

Yes, will keep forum updated, maybe gaps as I go away and investigate. Have a few other options in mind as well.

I still (naively maybe) think that if I can find the right person at HMRC they will take a dim view of this. It has a big impact on their strategy if companies can just pay 20% and pass the liability back wholesale. Finding the right person though, not easy. Yesterdays calls saw me just being passed around front-line staff who knew no detail. Putting through to ‘Technical’ was a 30-minute hold, then back to front line staff. Four rounds of that and gave up.

[eek]

Yes, will keep forum updated, maybe gaps as I go away and investigate. Have a few other options in mind as well.

I still (naively maybe) think that if I can find the right person at HMRC they will take a dim view of this. It has a big impact on their strategy if companies can just pay 20% and pass the liability back wholesale. Finding the right person though, not easy. Yesterdays calls saw me just being passed around front-line staff who knew no detail. Putting through to ‘Technical’ was a 30-minute hold, then back to front line staff. Four rounds of that and gave up.

You need the IR35 team but I haven't got a clue who that would be or how to get hold of them - the only people I have details for is education and they've moved on to other things.

[Keanu2020]

Ok, so just had a long chat with HMRC IR35 Technical. Guy was very helpful, gave name and explained it all. Their view is this is absolutely right. It’s a BR 20% tax code, anything else is my issue. Their view is the combination of the 20% tax rate and 25% NIC’s is enough to force companies to act. Even if it was done right at the time, it would still be BR 20% tax code. Accepted it created issues and tax bills for me, but that’s the rules.

Taken at face value, that means no way to protect yourself. Even if you do all the checks and get SDS, if its later found to be wrong, you get a tax bill, the end client or intermediaries are not liable for the full amount of tax at all. For most people contracting this will be higher band tax issues.

[eek]

Ok, so just had a long chat with HMRC IR35 Technical. Guy was very helpful, gave name and explained it all. Their view is this is absolutely right. It’s a BR 20% tax code, anything else is my issue. Their view is the combination of the 20% tax rate and 25% NIC’s is enough to force companies to act. Even if it was done right at the time, it would still be BR 20% tax code. Accepted it created issues and tax bills for me, but that’s the rules.

Taken at face value, that means no way to protect yourself. Even if you do all the checks and get SDS, if its later found to be wrong, you get a tax bill, the end client or intermediaries are not liable for the full amount of tax at all. For most people contracting this will be higher band tax issues.

Oh do you have / could you PM me his contact details - as that's very interesting and I would love to have a chat given this is yet another change that absolutely no-one will be aware of.

[Keanu2020]

Yeah, will share on private message. Not sure where this leaves me though. A nasty tax bill through no fault of my own and where the other party admitted it was their fault, and HMRC view is this is correct. I have a call with WTT next week, but anyone else see any other option to fight this?

[eek]

Yeah, will share on private message. Not sure where this leaves me though. A nasty tax bill through no fault of my own and where the other party admitted it was their fault, and HMRC view is this is correct. I have a call with WTT next week, but anyone else see any other option to fight this?

I'll think about it but I really don't know.

You've just discovered a nasty surprise that I don't think anyone had thought about - I will be interested to see WTT's view on this after you've discussed it.