Need advice on IR35

[jamesbrown]

He meant self-employed, i.e., a payment directly to you. That generally doesn't work for UK clients or agents because they risk being left with a tax bill.

[humucagir]

---

[northernladuk]

Thank you everyone for your replies and sorry for spinning this up again.
Assuming the US litigation risk is minimal.

If I paid out as Outisde IR35 until now, is sole trading the most tax efficient legal thing I can do?
If I just start operating Inside IR35, will my accountant report me to HMRC? Can HMRC notice anything?

Jesus. The paranoia is strong in this one.

[jamesbrown]

If I paid out as Outisde IR35 until now, is sole trading the most tax efficient legal thing I can do?

Moving to Bulgaria is potentially legal and more tax efficient.

If I just start operating Inside IR35, will my accountant report me to HMRC?

No.

Can HMRC notice anything?

Yes.

[humucagir]

---

[jamesbrown]

So if HMRC can notice that I moved Inside IR35 that's pretty much guaranteed investigation right?

They cannot easily notice that you've changed treatment for the same client. In other scenarios, they can (e.g., UK agency reporting), but that isn't relevant to you. The risk is not so much that they can identify the specifics, but that you get investigated for tangential reasons (e.g., check of business records) and that leads to an IR35 investigation and then it comes to light that you deliberately avoided paying the tax you knew was owed, which is then firmly in penalties territory. In other words, unless you pay the back taxes you know are owed (based on the contract review), there is always some risk. It may be low (e.g., because HMRC are more focused on Chapter 9 and 10 where they can pursue a large number of contractors behaving similarly all at once), but you may be unlucky.

[humucagir]

---

[Lance]

just catching up on this one.

My summary skim read is :

OP has a questionable outside determination.
OP is concerned about the cost impact.

My suggestion. For what it's worth.

• Move on to a new client. The further away in time you are, the less risk of investigation. After 6 years have gone there is virtually no risk other than due to fraud (the decision is questionable as opposed to wrong, and made in good faith so fraud not really in the mix).
• Join either IPSE, or Federation of Small Business. Anything which will provide legal cover.
• DO NOT. EVER. TALK TO HMRC. Use a professional to do that. See note abut IPSE/FSB above
• chill out. It's done now. Best plan a calm exit and risk reduction from now on.