IR35 review

[Zero Liability]

Thanks for the info.

In anticipation of what comes back, supposing the review were to deem the contract/working practices a "fail", I am assuming you can forget about IR35 insurance of the sort QDOS offers?

If the firm is yet to submit accounts, would it be a matter of having the accountant prepare them for an inside IR35 firm?

[malvolio]

Thanks for the info.

In anticipation of what comes back, supposing the review were to deem the contract/working practices a "fail", I am assuming you can forget about IR35 insurance of the sort QDOS offers?

If the firm is yet to submit accounts, would it be a matter of having the accountant prepare them for an inside IR35 firm?

Where to start...

The reviewers give you an opinion: a qualified and expert one but still only an opinion. What you do with it is up to you to decide: you're the responsible director, not them, and you're the one who gets investigated.

Would you insure someone if you had decided they were caught by the thing you are being asked to insure them against? I don't think so.

And your accountant does what you tell them, so back to the first point: it's your decision about how you get paid.

Perhaps some better reading is a good idea: perhaps start with the Guide to Freelancing at www.pcg.org.uk?

[jamesbrown]

Just to add to the above, a contract review is about performing the due diligence (something required of you) and, while a fail may indicate a precarious position, the reverse doesn't necessarily hold. Reviews are based on partial information, and some of them only consider the contract wording, not the working practices. Of course, working practices can change, lower and upper contracts may be in conflict in an agency scenario, clients can have a different view of relationships than contractors etc. The best you can do is to fully educate yourself about the risks and then act accordingly, i.e. as a business, because all of this is down to you, not the professionals that give you their opinion.

So, if you've had an unfavorable review and you're concerned about that opinion being privileged information, that is really the least of your concerns.

[Zero Liability]

Thank you. The PCG website is quite a useful resource. I am aware that the director is ultimately responsible for how a ltd company is managed, I was more curious as to how an IR35 review would be weighted by HMRC in an IR35 investigation (particularly for a fail), and how IR35 insurers weight it, since from what I understand the actual number of IR35 investigations conducted by HMRC is still fairly minimal when compared to the number of contractors out there, and to my knowledge it has not been successful with the majority of these.

I'll give the PCG site a read and come back with any questions I have, and also any after the review is concluded.

[northernladuk]

Thank you. The PCG website is quite a useful resource. I am aware that the director is ultimately responsible for how a ltd company is managed, I was more curious as to how an IR35 review would be weighted by HMRC in an IR35 investigation (particularly for a fail), and how IR35 insurers weight it, since from what I understand the actual number of IR35 investigations conducted by HMRC is still fairly minimal when compared to the number of contractors out there, and to my knowledge it has not been successful with the majority of these.

I'll give the PCG site a read and come back with any questions I have, and also any after the review is concluded.

God, re-written this so many times...

Why would HMRC put any weight on your review. They have investigated you. In their mind you are guilty, they want their money and don't give a stuff what you say. Do you mean how would the court weight it as defence and would it help you when they make their decision?

Bringing up the fact your contract failed an IR35 check would be curtains really. HMRC would point out that not only them but the reviewers who are professionals in this field think it is inside, who is left to argue it is out? You? Good luck with that one.

I would say if you get investigated with a failed review you are in deep doo doo. All the cases that have been marginal, 50/50 etc have all be with clear evidence that they were outside and in a strong position. Holding up a failed review is not a good start to your defence is it.

Personally I wish PCG and QDOS would take a more risk based approach to their insurance (or benefit) with very clear criteria to be eligible. It pains me to think part of my premiums (or membership) will be used to fund failing cases just because some numpty doesn't take his business seriously. I hear the people in the office that don't know anything about IR35 saying they just took the insurance out and they are ok now. Whoever offers this insurance should be able to look at the case and not represent if whoever hasn't been diligent. Happens in every single other insurance you can buy.

All that said and done maybe I should go read my QDOS insurance policy to make sure they don't already....

[northernladuk]

Instead of asking us questions to try and find how much crap you will be in if you get caught with your pants down as part of your decision making process why not tell us what it failed for?

If it failed because it doesn't cover MoO or substitution then no one will touch you. Forget opinion, it is black and white. If it failed because of a mine wording then you have a completely different situation to think about.

[TheFaQQer]

Bringing up the fact your contract failed an IR35 check would be curtains really. HMRC would point out that not only them but the reviewers who are professionals in this field think it is inside

At which point, your expert team then reminds everyone that it's the reality of the contract which matters, not the written word.

[Zero Liability]

It isn't the contract that is at issue, it's the 'working practices' based on the questionnaire that was sent, and the reviewer's view of how the PPI contracts are being handled, based on whether HMRC decide to treat the bank as opposed to the service firm (the agency's client, in consultation with which I provide services) as my end client. I'm still waiting for the final document from B&C to confirm their findings in writing. The contract itself is quite clear on ROS and MOO.

[northernladuk]

At which point, your expert team then reminds everyone that it's the reality of the contract which matters, not the written word.

While sweating profusely....

Very much so but if the client didn't put a sub clause in because they won't accept subs then you are pretty fooked. Depends if it was a badly written contract that failed or it failed because it accurately reflected the reality, which is inside.

We are both right here, it's the details that makes the difference.

[northernladuk]

It isn't the contract that is at issue, it's the 'working practices' based on the questionnaire that was sent, and the reviewer's view of how the PPI contracts are being handled, based on whether HMRC decide to treat the bank as opposed to the service firm (the agency's client, in consultation with which I provide services) as my end client. I'm still waiting for the final document from B&C to confirm their findings in writing. The contract itself is quite clear on ROS and MOO.

Well if a review fails on working practices, then, as TFaq has just pointed out, you are buggered.