IR35, a hypothetical situation

[VectraMan]

The liability for tax and NICs normally rests with the Personal Service Company or partnership

That's in the section under agencies. Taken out of context as you have it does suggest the liability is with the PSC and nobody else, but in context what they're saying is the liaibility doesn't lie with the agent.

[Jubber]

If your employer pays you money that you know hasn't had the correct amount of tax paid, are you then liable for that tax? I think you are. And as a director, you can't claim not to know.

Well that's my point really, how could I possibly know that I haven't paid the correct amount of tax? I have paid the correct amount of tax. As far as I was concerned I was outside of IR35 and I have all the paperwork to prove it. How can than possibly be negligent?

If I knew that I was inside IR35 - then that is different, that is negligent, or possibly evasion, but as far as I am concerned as I sit here today, I am outside of IR35 and I have the working practices and documentation to prove it.

[Jubber]

That's in the section under agencies. Taken out of context as you have it does suggest the liability is with the PSC and nobody else, but in context what they're saying is the liaibility doesn't lie with the agent.

Not out of context at all. It states quite clearly who the liability is with. If it was with the 'individual directors' then it would say that.

Do you work for Sunday Solutions by any chance?

[VectraMan]

Not out of context at all. It states quite clearly who the liability is with. If it was with the 'individual directors' then it would say that.

Well you've copied just the one sentence, and not the rest of the pargraph that supplies the context, but okay.

Regardless, it says "normally rests with the PSC", not always.

[Jubber]

Well you've copied just the one sentence, and not the rest of the pargraph that supplies the context, but okay.

Regardless, it says "normally rests with the PSC", not always.

I agree, it does say normally, and that is good enough for this company. Have the revenue ever used any 'black and white' language with IR35?

[Bluebird]

The link also says

"Where an engagement falls within the IR35 legislation, then the intermediary is responsible for calculating the amount of the IR35 Deemed Payment. This deemed payment normally arises at 5 April each year. "

Which suggests that if you are inside IR35 you should only pay yourself once a year?

[ASB]

Which suggests that if you are inside IR35 you should only pay yourself once a year?

Nope. Part of the calculation of the deemed payment considers the amount of salary really paid. It is a balancing thing to ensure that at the end of the tax year - irrespective of what it has ACTUALLY paid in salaries - the company is taxed on any excess between the actual salary and 95% of the relevant income.

[expat]

Suppose I get involved in some protracted IR35 investigation that may or may not cost me tens of thousands of pounds, I may just sell up and disappear abroad somewhere out of harm's way.

Where's that then?

[wurzel]

Where's that then?

Well, anywhere overseas where the IR has no jurisdiction. I don't think I'm going to get extradited because I have a large unpaid tax bill am I? I mean, I'm no criminal after all!