IR35 question

[THEPUMA]

I'd personally be inclined to think that the transfer of obligations rules may enable them to transfer the debt to the individual, however there are at lease question with whether they can do that (particularly with regard to ER's NI). THEPUMA, if I recall correctly, gave details why transfer of the debt might at best be difficult and at worst impossible (though personally I wouldn't like to assume I could "get away with it").

That's correct in most circumstances. I think in this case, the historical liabilities, before hammerman found out he was caught by IR35, should be OK. If he continues to trade, knowing that he is caught by IR35 but treating himself as not caught, that could be a different matter.

The wording of the legislation from memory is that you have to have "wilfully failed to deduct tax" so I think if you were blissfully ignorant of the fact that you were caught by IR35, you should be OK, whereas if you have had an opinion that you are caught but choose to ignore it, then you could be held personally liable.

Incidentally, I have it on good authority that Jon Bessell of Dragonfly didn't pay a penny of his £99K liability when he lost his case (and neither did his company).

[hammerman]

Do you know the reason why he didnt pay and has he actually got away with not paying? I cant understand as there wouldnt be any point in HMRC pursuing anyone if there was a way out of paying any owed tax. It would be interesting to know what powers they have to recover any liabilities.

[THEPUMA]

Do you know the reason why he didnt pay and has he actually got away with not paying? I cant understand as there wouldnt be any point in HMRC pursuing anyone if there was a way out of paying any owed tax. It would be interesting to know what powers they have to recover any liabilities.

Because his company had insufficient funds to pay the liabilities at the point at which the case was lost, so I am led to believe. Presumably he ceased trading through it when he realised there was a chance he would lose the case and perhaps he continued to draw dividends running down the reserves.

HMRC may choose to pursue cases for public perception reasons.

As previously mentioned, they can only recover liabilities from an individual where it can be shown that he/she wilfully failed to deduct tax. This would not be the case where you have traded in the false belief that you were not caught by IR35.

[centurian]

As previously mentioned, they can only recover liabilities from an individual where it can be shown that he/she wilfully failed to deduct tax. This would not be the case where you have traded in the false belief that you were not caught by IR35.

Is that as things were at the time Dragonfly was operating, or is that the case now under current regulations

[GreenerGrass]

Interesting info there, another reason not to leave much money in the company.

[Fred Bloggs]

As previously mentioned, they can only recover liabilities from an individual where it can be shown that he/she wilfully failed to deduct tax. This would not be the case where you have traded in the false belief that you were not caught by IR35.

Am I paying IR35 insurance for nothing then? I only keep tax money in the account. All else is drawn out. Anyone from QDOS care to comment please?

[hammerman]

As previously mentioned, they can only recover liabilities from an individual where it can be shown that he/she wilfully failed to deduct tax. This would not be the case where you have traded in the false belief that you were not caught by IR35.

There seems to be alot of confusing information. I dont know whether companies like Qdos make money out of fear of IR35 as the reality of paying large amounts of money back maybe different. I've looked at so many sites but there doesnt seem to be anything definite. Just alot of sites trying to sell their products! I know Qdos will represent me for the fee of £100 per year but is this fee so low beause not many contractors get investigated?

I know I'm inside IR35 but if I can get away with not paying anything if caught out then I will carry on. Has anyone on here been investigated and had to pay or know of anyone thats gone through it? Would be good to know what really goes on.

[centurian]

Am I paying IR35 insurance for nothing then? I only keep tax money in the account. All else is drawn out. Anyone from QDOS care to comment please?

I'm pretty negative about insurance as a whole, so probably not the best to comment.

But if nothing else, consider it an extra 'sleep-at-night' aid.

I don't believe that either strategy gives an absolute 100% protection, but the two combined might push it closer. Two bodyguards are better than one.

[THEPUMA]

Is that as things were at the time Dragonfly was operating, or is that the case now under current regulations

The legislation has not changed.

Interesting info there, another reason not to leave much money in the company.

There is a trade-off here though because if you take dividends out and pay 25% tax on them, that is less tax-efficient than leaving the surplus in and potentially taking it out at 10% when you come to close your company down.

[malvolio]

I know I'm inside IR35 but if I can get away with not paying anything if caught out then I will carry on.

ermm... Assuming you're serious , you do realise you have just confessed to tax evasion...?

(a) Why are you caught? (Bet you aren't, really )

(b) If you are, why are you not paying the tax due?

(c) Why do you think you can get insurance against a criminal activitiy? Do you think QDOS or anyone else would pay out if you haven't made an honest declaration of your status?