IR35 - What happens if previous ClientCo has closed\staff moved on

[northernladuk]

But if HMRC have something viable to chew on and you cannot defend it won't the converse be true?

[Contreras]

But if HMRC have something viable to chew on and you cannot defend it won't the converse be true?

Such as?

HMRC can arbitarilly declare the contract inside IR35 and demand taxes. Problem for them is that's not the end of it because the contractor will take them to tribunal. HMRC then have to defend their position with more than just hearsay and speculation.

[Zero Liability]

Thumbscrews probably.

Why wouldn't they though - your IR35 status will have no impact on ClientCo

But am I right in thinking HMRC have no powers to compel them to meet with it, and they can decline to do so?

[northernladuk]

Such as?

HMRC can arbitarilly declare the contract inside IR35 and demand taxes. Problem for them is that's not the end of it because the contractor will take them to tribunal. HMRC then have to defend their position with more than just hearsay and speculation.

Hmm possibly. I think the situation is far to hypothetical to come up with a reasonable answer either way TBH.

[Qdos Contractor]

I'm finding it a little hard to reconcile how HMRC, with only the contract as hard evidence, could be so sure of their position to want to defend it at a tax tribunal.

- The contract was already expert reviewed (say, by QDOS) so at worst it would be only borderline IR35.
- Client Co. has ceased to exist for whatever legitimate reason, i.e. no suspicion of tax evasion.
- The working practices are based on statements from the contractor alone.
- Contractor has repesentation (say, QDOS), very unlikely that anything stated would put him inside IR35.

Surely this is a lost cause for HMRC? They can speculate all they like about the contractor's working practices but are they really going want to defend this position when the contractor takes them to tribunal?

If HMRC believe they have a strong enough case, which would include the conviction of their own interpretations & arguments, then they would be prepared to progress a case to tribunal and not only for the reason of tax yield. Even where tax yield is not significant, if there is a point of principle at stake, HMRC will have no hesitation in advancing a case to tribunal.

If a contractor does not have the necessary evidence to support their claims & leave facts open to interpretation, then a tribunal judge is quite likely to be persuaded by the Revenue's arguments.

[Contreras]

If HMRC believe they have a strong enough case, which would include the conviction of their own interpretations & arguments, then they would be prepared to progress a case to tribunal and not only for the reason of tax yield. Even where tax yield is not significant, if there is a point of principle at stake, HMRC will have no hesitation in advancing a case to tribunal.

If a contractor does not have the necessary evidence to support their claims & leave facts open to interpretation, then a tribunal judge is quite likely to be persuaded by the Revenue's arguments.

Wow. Guilty until proven innocent! Not sure whether to be surprised though.

One of my previous clients went bust, leaving MyCo with an unpaid invoice. The contract was direct (no agency) using PCG template and mostly WFH. According to LinkedIn the guy who ran that company is now in Australia.

[ChimpMaster]

Wow. Guilty until proven innocent! Not sure whether to be surprised though.

One of my previous clients went bust, leaving MyCo with an unpaid invoice. The contract was direct (no agency) using PCG template and mostly WFH. According to LinkedIn the guy who ran that company is now in Australia.

That unpaid invoice is probably the best pointer you have to being outside of IR35.