First batch of HMRC IR35 compliance letters out

[kingcook]

I will be ignoring them if they send one out to my company. I see no reason in making their life easier, and the more time that they have to waist chasing me before I present them with a set of watertight IR35 exempt contracts together with working practices to match then the less time they will have to bother the next victim of this shake down...

I think i read that you have 1 month to reply, not sure if there is a fine/some other consequence.

[dimazigel]

I'm wondering how do they know who send this letter to?
I've never told them that I'm a contractor

[centurian]

I'm wondering how do they know who send this letter to?
I've never told them that I'm a contractor

Should be fairly easy to work out from self assessment and company returns. There would be certain key markers which would give a high indication that a company is a PSC.

I think they boasted to the IR35 forum that the Services Company question on the P35 was largely redundant - that they have already identified the majority of PSC's.

Whether this is true or not - is another matter

[Old Greg]

What is the esteemed panel's view on all this?

The law has not changed. Is this just another scare tactic to persuade people to play it safe?

[northernladuk]

I'm wondering how do they know who send this letter to?
I've never told them that I'm a contractor

You didn't think that through very well did you

[DaveB]

What is the esteemed panel's view on all this?

The law has not changed. Is this just another scare tactic to persuade people to play it safe?

Pretty much IMO.

This isn't a change in the way investigations are carried out. The law still requires that to be done on a contract by contract basis. This is a change in the way they intend to select targets for investigation.

[dimazigel]

You didn't think that through very well did you

Who knows. No one gave exact answer to this question in this forum. Are there any spies here?
Looking at the documents company must submit, the only question related to filtering PSC from other companies is Question 6 in P35 form: Are you service company? I answered no. Let's see if I receive such letter. I think HMRC are very stupid and lazy. It is easier for them to catch you on a hook rather then check several million of small businesses.

[bobspud]

I think i read that you have 1 month to reply, not sure if there is a fine/some other consequence.

Most likely the consequence will be silence as the department buckles under the strain of trying to find all the companies that go to ground, ask for clarifications or generally refuse to play ball. I had an issue several years back where it took me over a year and a half to file a return. (bad accountant and was too busy/newbie to care) I was amazed how totally without a clue they were. I owed them a fair bit in the end but I could have sent the company into administration and walked away and they would have been none the wiser. You are all sat here thinking that HMRC knows everything about you, when in fact they are for the most part completely swamped and without a paddle.

[malvolio]

Who knows. No one gave exact answer to this question in this forum. Are there any spies here?
Looking at the documents company must submit, the only question related to filtering PSC from other companies is Question 6 in P35 form: Are you service company? I answered no. Let's see if I receive such letter. I think HMRC are very stupid and lazy. It is easier for them to catch you on a hook rather then check several million of small businesses.

Ah but...

Firstly, do some reading onthe use of iXBRL on HMRC returns.

Then consider: if you answered no, but your various returns show your are the majority shareholder of a company with no employees, getting a small salary from that company plus dividends and having no other regular income, then they may just have a clue that you have not answered the P35 question correctly. Which is why you get the invitation to explain yourself...

That's why the advice is to answer Yes/No - that way you can defend your answer no matter what and you don't leave any hostages to fortune lying around.

[Gaz_M]

People need to realise unless you have an impressive Plan B that can generate substantial income, a contractor will generally still be better off IR35 caught.

Hmmm, not so sure unless you either commute daily or get a bloody good accommodation rate somewhere.
In my current gig I wouldn't be any better off inside IR35 than taking a 40/45k pa permie role somewhere close to home.

If I do have to start working inside then I'd take something perm whilst really stepping up my plan B five nights a week.