Employer's NI liability when IR35 Caught

[Jessica@WhiteFieldTax]

Personal liability is a complex area. Its not clear cut, and depends in no small part on diligence of making the IR35 decision.

Put simply - someone who makes every effort to assess their IR35 status and work compliantly, can probably defend personal liability. Someone who has just assumed they are outside of IR35 and worry about it later, probably can't.

A few years ago we had just that scenario with a client. Failed status inspection (handled by Qdos), company in process of closing down and no funds, HMRC assessed the director. Client referred to Accountax who defended the position.

I did a short research paper on this earlier this year, if anyone would like a link, please contact me via PM - I understand its against site rules to publish a link?

[Jessica@WhiteFieldTax]

An employee is not liable for employer's NI. There are no specific provisions in IR35 that override this.

Agree an employee is not liable for employers NI. However a company director can have personal liability for failed tax obligations of the company. That would include Ers.

[IR35 Avoider]

Agree an employee is not liable for employers NI. However a company director can have personal liability for failed tax obligations of the company. That would include Ers.

Yes, I think we are agreement on all points. I have been assuming a conscientious director who makes a reasonable attempt to accurately assess status. The clueless director who buries his head in the sand may be more typical, so statistically speaking employers NI may be more recoverable than my previous comments imply.

(And if I'm wrong to think we are in agreement - your opinion is obviously better than mine.)

[northernladuk]

I did a short research paper on this earlier this year, if anyone would like a link, please contact me via PM - I understand its against site rules to publish a link?

I hope not LOL!! Might as well close my account if that was the case. You can't advertise or sell but publishing links to useful related info on your website is ok I believe. Alan from NW links to their contractor guide on their website. Something like this sounds like an interesting read.

IR35Avoider just pm'd me saying he would take the rap for it so get the link up!!

[IR35 Avoider]

Google found me this link.

IR35 and Personal Liability – can HMRC proceed against an individual? | Whitefield Tax Limited

Edit: Having now read the article, it differs from what I said above in that it seems to be saying that even income tax may not be collectible from the individual. I hereby change my mind!

[Jessica@WhiteFieldTax]

Google found me this link.

IR35 and Personal Liability – can HMRC proceed against an individual? | Whitefield Tax Limited

That be it!