Advice on changing to outside ir35 during existing contract

[Slylabs]

I'm hoping to get some advice on changing my IR35 status. I've being contracting with the same client for about 3 years. During the first year of the contract I contracted through an umbrella company but transferred to my own limited company at one of the renewals. At the transfer point time the agency supplied a new contract "OFFER OF SUBCONTRACTED I.T. SERVICES" contract template which appeared to have been done by one of the contract review companies.

Anyway I completed the contract with the contract tasks/deliverables, hourly rate, etc and signed it. I assumed at the time that I would have to operate my limited company within IR35 as I had changed from an umbrella company so I instructed my accountant accordingly. I'm currently looking to change my IR35 status as my contract is coming up for renewal. It been suggested by my accountant and fellow contractor colleagues that I get the contract reviewed.

I believe the contract may be ir35 compliant and assuming it is, is it advisable to change ir35 status mid contract especially after a few years of operating within ir35?

If the contract isn't ir35 compliant then is it advisable to get it amended and then change my status?

Does it flag up on the HMRC systems as soon as you change ir35 status?

Thanks

[malvolio]

Last point first - no, it's not that clever.

First point last - Using an umbrella makes IR35 irrelevant. You're paying full tax an NICs on 100% of your earnings so there's no point in worrying about IR35. So when you went to your own company, you could have reassessed your IR35 position and it looks like you should not have paid under IR35. You'll need a contract review to prove that though - if it passes, change the tickbox on the P35.

However, assuming you were outside all along, that means you've paid a big chunk of tax unnecessarily. Do you simply write it off to experience, or do you challenge Hector with a claim for refund with interest since you believe you have incorrectly completed your SA return(s)? Would that not generate an aspect inquiry that would rapidly turn into an IR35 one? Do you feel lucky?

I should get some professional advice from an accountant that understands IR35 properly (look for one with the PCG QA badge if you don't know of any) or, if you are a member, from the PCG Tax and Legal helplines.

[max]

However, assuming you were outside all along, that means you've paid a big chunk of tax unnecessarily. Do you simply write it off to experience, or do you challenge Hector with a claim for refund with interest since you believe you have incorrectly completed your SA return(s)? Would that not generate an aspect inquiry that would rapidly turn into an IR35 one? Do you feel lucky?

I should get some professional advice from an accountant that understands IR35 properly (look for one with the PCG QA badge if you don't know of any) or, if you are a member, from the PCG Tax and Legal helplines.

There used to be a no win, no fee deal, on the claim back.

Not sure if PCG(supplier) still offers the deal.

[malvolio]

There used to be a no win, no fee deal, on the claim back.

Not sure if PCG(supplier) still offers the deal.

Ermm... http://www.pcg.org.uk/cms/index.php?...sk=view&id=350 ??

[tim123]

First point last - Using an umbrella makes IR35 irrelevant. You're paying full tax an NICs on 100% of your earnings so there's no point in worrying about IR35. So when you went to your own company, you could have reassessed your IR35 position and it looks like you should not have paid under IR35. You'll need a contract review to prove that though - if it passes, change the tickbox on the P35.

However, assuming you were outside all along, that means you've paid a big chunk of tax unnecessarily. Do you simply write it off to experience, or do you challenge Hector with a claim for refund with interest since you believe you have incorrectly completed your SA return(s)? Would that not generate an aspect inquiry that would rapidly turn into an IR35 one? Do you feel lucky?

How has he incorrectly filled in his SA return? ISTM that he will have filled it in correctly on the basis of being employed by the brolly.

If you are really saying that he should make a claim on the basis that he was 'tricked' into using a brolly when he didn't need to, he as absolutely zero chance of winning that arguement. He has no legal basis for claiming it.

tim

[ASB]

If you have paid actual salary then you have no grounds for any sort of appeal.

If you paid on deemed salary then the no win no fee arrangement with Accountax (if they are still doing it) could potentially be used to challenge it.