IR35 Buddy - worth a closer look, maybe

[Craig at Nixon Williams]

It seems unlikely that HMRC would just drop an IR35 case just because somebody was low risk..if they looked at a contract and found that it was essentially an employment contract and thus caught by IR35, I don't think that they would just drop it because the company scored highly on the BETs.

I would also suggest that if somebody entered into a 'buddy' arrangment in order to advertise their business or give them office space when there is absolutely no need for it commercially then HMRC would be able to see straight through it.

Craig

[Clare@InTouch]

It seems unlikely that HMRC would just drop an IR35 case just because somebody was low risk..if they looked at a contract and found that it was essentially an employment contract and thus caught by IR35, I don't think that they would just drop it because the company scored highly on the BETs.

I would also suggest that if somebody entered into a 'buddy' arrangment in order to advertise their business or give them office space when there is absolutely no need for it commercially then HMRC would be able to see straight through it.

Craig

Indeed, and that's partly my concern. HMRC may be able to see certain details on CH and via tax returns etc, but that's different to having a list of people who are all so worried about IR35 that they've joined a network in order to contrive a pass on the BET. That's waving a red flag surely?

I'd go with a decent contract review combined with IR35 insurance and PCG membership personally.

[TheFaQQer]

Indeed, and that's partly my concern. HMRC may be able to see certain details on CH and via tax returns etc, but that's different to having a list of people who are all so worried about IR35 that they've joined a network in order to contrive a pass on the BET. That's waving a red flag surely?

I'd go with a decent contract review combined with IR35 insurance and PCG membership personally.

In the same way that HMRC would like to get the membership list from the PCG, joining IR35 Buddy seems crazy. What safeguards are in place / what is the legal situation to prevent HMRC easily getting hold of the membership list and looking at each one??

[Maslins]

Appreciate I'm outnumbered here.

Per page 10 of this document:

"If you prove to our satisfaction that you are outside IR35 or in the ‘low risk’ band, then we will close our IR35 review."

Note there's an "or" between outside IR35 and being low risk based upon BETs...so they are saying they will drop a case purely based upon you being low risk.

I guess you'll all say that it wouldn't be to HMRC's satisfaction if you were low risk by utilising some of the buddy suggestions. To my mind the various buddies are just helping you to evidence that you meet whichever BET it's for.

If you want formal backing for that, then you pay for the passport. Do that and you'll have your contract reviewed and have tax investigation insurance against IR35 (or potentially the more expensive package where they pay the tax if you lose too). At that point I'd suggest you're as well protected as anyone.

[TheFaQQer]

"If you prove to our satisfaction that you are outside IR35 or in the ‘low risk’ band, then we will close our IR35 review."

I suspect that it won't be as easy as just filling out the form on-screen and saying "looky here, I'm low risk".

Trying to prove something to their satisfaction, based on a wholly artificial premise isn't going to be easy.

If you want formal backing for that, then you pay for the passport. Do that and you'll have your contract reviewed and have tax investigation insurance against IR35 (or potentially the more expensive package where they pay the tax if you lose too). At that point I'd suggest you're as well protected as anyone.

The danger is that people rely on the free stuff, because there is an implication that you will then be low risk and won't go through an IR35 investigation. They then find out that HMRC don't see them as low risk, so then go the route of the paid-for service - BUT now can't get any meaningful protection because they are already the subject of an investigation.

Worse than useless, IMHO, and potentially very dangerous to rely on the "service".

[Maslins]

I suspect that it won't be as easy as just filling out the form on-screen and saying "looky here, I'm low risk".

Trying to prove something to their satisfaction, based on a wholly artificial premise isn't going to be easy.

I think that sometimes people give HMRC too much credit. I imagine the yes/no BETs are as much to make life simple for their staff as it is for the contractors. Tick their boxes and they'll toddle off and annoy someone else.

[northernladuk]

I think that sometimes people give HMRC too much credit. I imagine the yes/no BETs are as much to make life simple for their staff as it is for the contractors. Tick their boxes and they'll toddle off and annoy someone else.

Until someone comes up with a contrived solution to manipulate the tick boxes in which case they have to investigate the affected areas in a little more detail.

[LisaContractorUmbrella]

I think that sometimes people give HMRC too much credit. I imagine the yes/no BETs are as much to make life simple for their staff as it is for the contractors. Tick their boxes and they'll toddle off and annoy someone else.

Really????

[LisaContractorUmbrella]

I suspect that it won't be as easy as just filling out the form on-screen and saying "looky here, I'm low risk".

Trying to prove something to their satisfaction, based on a wholly artificial premise isn't going to be easy.



The danger is that people rely on the free stuff, because there is an implication that you will then be low risk and won't go through an IR35 investigation. They then find out that HMRC don't see them as low risk, so then go the route of the paid-for service - BUT now can't get any meaningful protection because they are already the subject of an investigation.

Worse than useless, IMHO, and potentially very dangerous to rely on the "service".

Exactly - nicely put FaQQer

[LisaContractorUmbrella]

Until someone comes up with a contrived solution to manipulate the tick boxes in which case they have to investigate the affected areas in a little more detail.

And how many more contrived solutions are HMRC going to put up with before coming up with another sledgehammer to crack a nut solution like the MSC legislation