Deemed payment for IR35 after company closure

[AZZIK]

Just wanted to get some advice from people. Has anyone closed there company in the last year and then were sent a letter from HMRC demanding deemed payment for IR35. A contractor at my work place left in april to become permanant and sent me the following email
'Got my tax through for 2006-07.
My expenses covered my corporation tax, so that was fine.
but have 6500 to pay as Deemed Payments from IR35'

I am still contracting at the same place but will start a new contract on a fixed term basis in 2 months time where I will be paid by the clients payroll therefore I have decided to close my comapny down.

[malvolio]

He needs to appeal that decision PDQ. Clearly he has been assessed as being inside IR35 as part of the company closedown process that HMRC go through. to make sure there are no outstanding taxes due.

It doesn't mean that you will suffer the same fate - but you might...

[AZZIK]

I hope not.
He is quite lazy so think he will just take the hit than appeal. It is a little worrying.

[pisces]

If he went perm at the same company I would assume this was standard HMRC IR35 practise?

Anyhoo how can HMRC deem you IR35 without seeing contracts etc etc?

[AZZIK]

he went perm to a different company 400 miles away from the previous one.
Thats what I wanted to ask if it was a standard thing for the HMRC to send out a letter for deemed IR35 payment when you close the company down and wait and see who accepts it and who argues against it.

[pisces]

Sounds like they're trying it on to me.

Did they see his contracts?

[AZZIK]

Not as far as I know I have emailed him to ask the question

[Bluebird]

just don't close the company down - you can file accounts each year - if they are "nil" I would have thought that it won't cost you much.

Then close down in 6 [?] years time, by which time HMRC won't be able to touch you.

[ChimpMaster]

He closed a company down and has a deemed IR35 bill of £6,500 - which doesn't sound like a lot of money. Perhaps he was on a very low rate, or the company wasn't operating for very long.

But... if he has been running the Ltd for some time, then it might be wise of him to accept this payment and let the company close down quietly. He doesn't want to unnecessarily draw more attention to it.

[AZZIK]

I have managed to get to the bottom of it from what he is saying his accountant was not sure if he was in IR35 so I think he just put him down as inside IR35. His accountant has been rubbish and may be the cause of all this. As the accountant says he has to pay the deemed payment HMRC have not sent any requests to view his contract.

I would not mind leaving my company open but accountant will charge me if I do until they do end of year accounts thats why I thought if I close company down I only have to pay accountant charges for next 4 months for them to prepare necessary paperwork.