IR35 tax loss insurance - yes or no?

[zathras]

This is incorrect unless HMRC can prove that the director know the company was caught by IR35 which is wholly unlikely.

There a director for crying out loud. It is in the job description.

If a director does not know the likely liabilities of his company then he is failing in his legal duties in that position, especially if the same director then goes on to pay a dividend and the money owed is no longer in the company because it is in the director's pocket!

The debt transfer rules only applies to MSC's. With an MSC they have to pay NI/Income tax on all the income regardless of their status under IR35 - because MSC's have been removed from the scope of IR35. They are treated as caught anyway.

In a PSC. If they paid too much salary it would not matter. Salary is deducted before the Calculation of profit and is more than the tax due on CT anyway.

[ASB]

There a director for crying out loud. It is in the job description.

No it isn't. As you go on to say. Keyword is likely.

If a director does not know the likely liabilities of his company then he is failing in his legal duties in that position, especially if the same director then goes on to pay a dividend and the money owed is no longer in the company because it is in the director's pocket!

True. But the point is likely. If he can show that his belief that he was outside IR35 was reasonable then he did know the likely liabilities. It just happens that he was later proved wrong by particularly technical legal argument - way beyond the remit of what is expected.

The debt transfer rules only applies to MSC's. With an MSC they have to pay NI/Income tax on all the income regardless of their status under IR35 - because MSC's have been removed from the scope of IR35. They are treated as caught anyway.

Yes. And the reason for it is because it was ascertained that there were no powers held by HMRC which allowed them to transfer the debt to a seperate legal entity once they discovered/decided the IR35 legislation should have applied. If they could have transferred the debt to the worker (and whatever type of entity they traded under is irrelevant by HMRC own implicit admission by use of the word different) don't you think they might have had a go?