IR35 review

[TheFaQQer]

Abolish it and a lot of these firms will have to find new business.

Since one of these companies is involved with the IR35 forum, I can't see it being abolished in a rush.

[Kate Cottrell]

Reply to various points

Just to clear up a few points here as follows:

LLP - It is only the legal profession that is covered by this so anyone else including accountants and those involved in IR35 are not but it begs the question (in the context of IR35) why would you need it?

PPI claims handlers - without commenting on this particular case- in general those involved are being trained to do the work first and are subject to constant performance reviews. Although it may be arguable that this is a "project" it is the normal business of the client and is likely to go on for many years. The end clients remain wholly responsible for the work and compliance with numerous regulations regardless of the contractual chain. As always it is the reality of the working relationship that is paramount rather than an "IR35 Friendly" contract with a third party.

IR35 investigation cases - yes on the increase and in our experience they are being settled very quickly. We defend cases for free for our Guardian Plus clients.

IR35 Forum - The decision to keep IR35 was and remains the Governments. The Forum is tasked with improving the administration of IR35. All the new procedures are up for review over the summer.

Hope this helps

Kate Cottrell

[northernladuk]

IR35 investigation cases - yes on the increase and in our experience they are being settled very quickly. We defend cases for free for our Guardian Plus clients.

Great post and useful input as always Kate thank you.

Just a quick question.. Getting settled quickly in who's favour?

[Kate Cottrell]

Great post and useful input as always Kate thank you.

Just a quick question.. Getting settled quickly in who's favour?

In B&C's cases the Contractors of course! We still have our 100% win record!

[proggy]

I would wait for the actual figures from HMRC rather than listening to people who may have a interest in contractors worrying about being investigated. If they have gone from double figures in 2011 to over many hundreds then I might think about getting some insurance. However based on the ineffectiveness of the legislation I doubt HMRC are pouring loads of money into it.

[northernladuk]

I would wait for the actual figures from HMRC rather than listening to people who may have a interest in contractors worrying about being investigated. If they have gone from double figures in 2011 to over many hundreds then I might think about getting some insurance. However based on the ineffectiveness of the legislation I doubt HMRC are pouring loads of money into it.

It maybe ineffective but it can still land on your doorstep and require defending, albeit easily.

But you save your £150 or so (and claimable for tax). Go for it.

[northernladuk]

In B&C's cases the Contractors of course! We still have our 100% win record!

And a question that has popped up a couple of times. What happens when you have someone with insurance that is in what appears to be a pretty indefensible position, i.e. a PPI claims handler for example, no subs, MoO in place. Do you defend them anyway as HMRC can't win anything or do refuse to represent them? Or do you do some diligence before offering the insurance?

[malvolio]

Agree with Kate, broadly. AIUI the compliance unit is being beefed up and the drop in cases is being reversed They are also getting better - or perhaps a little more selective - at targetting people and resolving them more quickly.

At some point we will no doubt see an FOI asking how the world has changed since the last time. That would be informative; especially if the HMRC win ratio hasn't improved.

[jamesbrown]

At some point we will no doubt see an FOI asking how the world has changed since the last time. That would be informative; especially if the HMRC win ratio hasn't improved.

IR35 enquiries: the seven questions that deserve an answer from HMRC now

[Kate Cottrell]

And a question that has popped up a couple of times. What happens when you have someone with insurance that is in what appears to be a pretty indefensible position, i.e. a PPI claims handler for example, no subs, MoO in place. Do you defend them anyway as HMRC can't win anything or do refuse to represent them? Or do you do some diligence before offering the insurance?

B&C do not sell insurance (legal expenses or tax losses)but we are claims handlers for some firms. The important point to remember is that in these cases the B&C client is the insurance company and not the contractor. Once an investigation starts we are required to undertake a thorough review and advise the insurance company's underwriters if there is a "reasonable chance of success" with the claim. If the claim is not defendable then we would say so and in our experience of two such cases the underwriter withdrew support.

There is absolutely no substitute for due diligence by taking the right advice at the right time i.e. considering every contract, extension and renewal and the WORKING PRACTICES, ideally before signing. The insurance (if needed) should then flow from this point. There is little comfort to be had from purchasing any defence product (insurances, guarantees or all inclusive memberships) if the engagement covered is inside IR35.

Yes we have won many cases over the years that were weak but perhaps they now belong in the old IR35 arena given that we are now dealing with HMRC IR35 specialist teams. We will always try to help any contractor faced with an investigation but we do not give anyone false hope.

Kate Cottrell