IR35 investigations - how far back?

[ASB]

IMO closing the company would offer no protection whatsoever. Partly because as a director you certainly can become personally liable for things like tax evasion, and partly because IR35 is essentially a personal tax and not a business one. But that's not an expert opinion; it would take somebody to test it.

I left the PCG 6 months after becoming a permie, and of course they were quick to try to pursuade me to stay for this reason (no mention of 2 years though). Frankly it sounded like a rip off, and I wasn't about to keep paying for another 6 years, though I suppose you could argue that either way.

It wont get you out of negligence, thats true. But that can be quite a high barrier. So if you can show reasonable evidence of belief ir clear then you should be fine.

Furthermore, the company does not exist. So they have to do the restoration first.

They key question becomes "well what has changed since you accepted the tax affairs were all in order by not objecting to the striking off".

Its not a get out of jail csrd, but there is little motivatio for hmrc to try and attack. Even if they were to succed they will then have to prove negligence to get the director. That is a much higher bar than the director simply being wrong.

[Zero Liability]

Thanks for the info. Would it be fair to say HMRC will generally go through an ECR trigger an IR35 review, as opposed to any other route? From what I have been told by the tax insurer, they can instigate one based on concerns with any aspect of your tax affairs, but in practice is this the case?

With respect to showing due diligence, would an outside IR35 contract review suffice, or would one have to go further and e.g. obtain a COA from the end client, or some other form of confirmation from the agency re the upper and lower tier contracts aligning?

[Jessica@WhiteFieldTax]

Thanks for the info. Would it be fair to say HMRC will generally go through an ECR trigger an IR35 review, as opposed to any other route? From what I have been told by the tax insurer, they can instigate one based on concerns with any aspect of your tax affairs, but in practice is this the case?

yes, thats a fair summation

With respect to showing due diligence, would an outside IR35 contract review suffice, or would one have to go further and e.g. obtain a COA from the end client, or some other form of confirmation from the agency re the upper and lower tier contracts aligning?

Theres no set formula. The more the better. T'was always thus. The stronger you make your case, the more chance of HMRC looking for low hanging fruit elsewhere.

[malvolio]

I left the PCG 6 months after becoming a permie, and of course they were quick to try to pursuade me to stay for this reason (no mention of 2 years though). Frankly it sounded like a rip off, and I wasn't about to keep paying for another 6 years, though I suppose you could argue that either way.

On that point the advice is always to hold the membership for the tax year after the one in which you close the company to ensure you are covered should the brown envelope arrive. It's a whole £120 plus VAT admittedly, but it might save you £15k...


After that the envelope isn't coming unless perhaps you were in an EBT or something equally imaginative.

[Zero Liability]

Theres no set formula. The more the better. T'was always thus. The stronger you make your case, the more chance of HMRC looking for low hanging fruit elsewhere.

I think it's another reason to stick with IR35 insurance until the company is closed and a year after. I may approach the client PM for a COA, I am just alert to the fact that she may be leery of putting her signature on such a document.