HMRC April 2009

[Jubber]

I was browsing the ContractorUK scarey marketing - oops sorry - 'contractor question' page and I saw this

This will be even more important with HMRC’s new penalty regime due in April 2009 as it will be necessary to have demonstrated “reasonable care” in order to avoid a penalty.

What's all this about then. Anyone got a link?

J

[jigsaw]

My take on this would be that if you were subject to a review by HMRC and you operated outside IR35, you would have to be able to demonstrate that you took reasonable care in making the decision that your contract(s) were outside IR35. Operating outside IR35 obviously affects how you will fill in your tax return at the end of the year and the HMRC are saying you must take reasonable care to "get your tax right".

In order to demonstrate this you would need to be able to wave a professional contract review under their noses which came to the conclusion that your contract(s) passed the IR35 tests.

If you demonstrate reasonable care, no penalties would be due if the HMRC won their case against you, as they would deem it a mistake. If you cannot demonstrate care they would deem it a deliberate error, it would be game over for you.


http://www.hmrc.gov.uk/about/new-penalties/index.htm