IR35 defeat costs IT contractor £99,000

[backgetyou]

You'll be liable for the IR999 minimum £30K a year plus interest tax bill then for your missing years

It is a bit of worry, I think these cases are long standing, I got the idea the IR were scaling back new investigations but ?

I'm glad I've moved around a lot, more for boredom reasons than tax safety but my tax bill for any one contract won't kill me.

Why if its more than six years ago? My solicitor advised me they have no obligation to hold or return they can destroy after 6 years one day. I checked with companies house and they have stated the same, in fact they stated you only have to produce the evidence if its legally possible for you to do so. Whilst I could get no further on this I understood it to mean, for example, if your house was flooded (topical) and all your documents destroyed in this case by an AOG then you would not be able to produce them. I am not suggesting that anyone leaves their taps on overnight...

BTW does anyone know the situation with company name? - see earlier note.

[BrilloPad]

He's an idea. Why doesn't everybody who has a non Labour MP email this to them and state the obvious problems with it. How we can be bound by contracts we have not seen or signed. How IR35 now means that we have to work to the letter of our contract. So no ability to get involved in other parts of the project if we want to due to it not being part of the contract.

I have raised issues with my MP a couple of times regarding IR35. On both occasions he simply passed my questions onto Dim Prawn and Ed Balls Up. Neither was of any use. If you have an MP from another party it might stir a little noise - especially given the income shifting stuff also.

At f4j we tried alot of writing to MPs. Always got back same standard reply. Alas writing letters/lobbying etcetc rarely has any impact.

[BrilloPad]

You'll be liable for the IR999 minimum £30K a year plus interest tax bill then for your missing years

It is a bit of worry, I think these cases are long standing, I got the idea the IR were scaling back new investigations but ?

I'm glad I've moved around a lot, more for boredom reasons than tax safety but my tax bill for any one contract won't kill me.

I thought IR35 went with company? So you should close down your ltd every few(3?) years and start a new one?

If I was still ltd I would be doing that.

[BoredBloke]

At f4j we tried alot of writing to MPs. Always got back same standard reply. Alas writing letters/lobbying etcetc rarely has any impact.

But sitting here moaning about things does nothing also. If enough people vent to their MP's then at least they are aware of the issue.

[backgetyou]

I thought IR35 went with company? So you should close down your ltd every few(3?) years and start a new one?

If I was still ltd I would be doing that.

As long as you are not closing your company down for tax evasion as this is more serious, i.e. phoenix. However I agree with you, your liability changes when you shut down so if you have reason to do this (such as a bad debt not paid) then your accountant may advise you to close down anyway.

[Chugnut]

So no ability to get involved in other parts of the project if we want to due to it not being part of the contract.

The other ridiculous point about this is that it surely flies in the face of running a professional, profit-making business.

Do I run the very real risk of damaging the working reputation I have with the client for an investigation which may never happen? The client cares little for IR35; if you answer their every request with your IR35 hat on, you can easily come across as inflexible and unapproachable.

In light of some of the arguments won by the SC in the above case, I'm finding it quite difficult to feel I'm adopting a safe middle ground with any degree of confidence.

[BrilloPad]

But sitting here moaning about things does nothing also. If enough people vent to their MP's then at least they are aware of the issue.

Well - f4j found the way forward. NVDA.

Of course the f4j big cheese(f4j is basically a one-man band) is now running for mayor. I wonder where the money will be spent in his campaign?

[Bumfluff]

As long as you are not closing your company down for tax evasion as this is more serious, i.e. phoenix. However I agree with you, your liability changes when you shut down so if you have reason to do this (such as a bad debt not paid) then your accountant may advise you to close down anyway.

Not sure if I understand this, are you saying I could close my company down and as soon as its closed thats it they cant come at me for IR35 ?

[BoredBloke]

The other ridiculous point about this is that it surely flies in the face of running a professional, profit-making business.

Do I run the very real risk of damaging the working reputation I have with the client for an investigation which may never happen? The client cares little for IR35; if you answer their every request with your IR35 hat on, you can easily come across as inflexible and unapproachable.

In light of some of the arguments won by the SC in the above case, I'm finding it quite difficult to feel I'm adopting a safe middle ground with any degree of confidence.

Exactly - a while ago I had a kitchen fitted. I asked our fitter if he could install a waste disposal unit I had got off ebay. It wasn't on our plans and was extra to what he had originally quoted. Since it was only a little job and because he was already plumbing in the sink he did it for free. A good will gesture. Why is his company allwed to do this and mine is not.

[backgetyou]

Not sure if I understand this, are you saying I could close my company down and as soon as its closed thats it they cant come at me for IR35 ?

This is one for your accountant worded such that you dont step on their ethics but IR35 is only one part of your liabilities. I think if you closed down your company which will still take best part of a year and went permie then the Inland Revenue are more likely not to pursue you for an old debt. To re-open a company is an expensive and complicated process and I do not know of the IR ever doing this for an IT contractor. You may still be liable for IR35 with your company closed, however with it closed and for instance working as a pemie you are less likley to be flagged and as time goes on your risk goes down. I am not suggesting that you should go permie just that you should talk with your accountant we all have different situations and really what you need is expert advice.