How do you best mitigate against getting caught by IR35?

[Hiram King Of Tyre]

Assuming that you do everything you can to ensure you're outside IR35, it seems to me that the only way to establish whether you are really inside or outside is to be investigated. So let's say you had your contract & working practices chacked and did everything you could but were then investigated and lost. What can you do to minimise the impact? I guess keeping the money in the Ltd Co is no good as 95% would still be deemed salary.

The only way I can see is to pay a substantial amout into a pension. For me at 49, this is looking an attractive option as at 50/55, I can withdraw 25% tax free. Is there anything else you can do?

[Lewis]

Assuming that you do everything you can to ensure you're outside IR35, it seems to me that the only way to establish whether you are really inside or outside is to be investigated. So let's say you had your contract & working practices chacked and did everything you could but were then investigated and lost. What can you do to minimise the impact? I guess keeping the money in the Ltd Co is no good as 95% would still be deemed salary.

The only way I can see is to pay a substantial amout into a pension. For me at 49, this is looking an attractive option as at 50/55, I can withdraw 25% tax free. Is there anything else you can do?

Take out tax loss insurance, e.g. from QDOS or via PCG.

[Hiram King Of Tyre]

Does that pay the tax for you though or just the legal costs?

[Lewis]

Does that pay the tax for you though or just the legal costs?

Both. Google QDOS TLC35 for example.

[Fred Bloggs]

The only way I can see is to pay a substantial amout into a pension. For me at 49, this is looking an attractive option as at 50/55, I can withdraw 25% tax free. Is there anything else you can do?

I do that and I also have TLC35 (I'm 51 y.o.).

[BolshieBastard]

Imo you cant mitigate for something that is virtually dependant on different Tax Inspectors and SC decisions.

Either class yourself as IR35 caught or make sure you keep money back in case they do catch up with you.

I suspect insurance will either go up considerably in view of Dragonfly or many more contracts will be refused insurance.

In other words, its a lottery!

[Hiram King Of Tyre]

I accept what you're saying bolshie but I'm looking for ways to reduce the impact. If you left a lot of money in the ltdco, if caugt, could you then opt to pay it into a pension?

or, if you kept a substantial amount in the company for 6 years an then drew it as a dividend, would you be ok on the basis that they can only go back 6 years?

[Hiram King Of Tyre]

Fred, on the pension idea, my accountant recommends that pension payments shouldn't exceed salary but I think that may be over cautious

[Lewis]

Either class yourself as IR35 caught or make sure you keep money back in case they do catch up with you. I suspect insurance will either go up considerably in view of Dragonfly or many more contracts will be refused insurance. In other words, its a lottery!

When you post this speculation along with comments like "99% of contractors WILL be IR35 caught based on the Dragonfly ruling and insurance wont save their bacon either". I must remind myself that you are under threat from BN66 and believing this probably makes you feel better.

[Hiram King Of Tyre]

I had a letter from Qdos this morning offering their TLC35. I think you do have to pay yourself £15 salary though don't you?