Is there any reason to ever declare being inside IR35?

[ratewhore]

Even if you are sure a contract is inside IR35, is there any reason why you shouldn't act like it is not, and put the extra money aside in a long-term high-interest account?

If you get investigated and they rule a contract was IR35, what happens? Do they
a)just ask you for the unpaid tax
b)also add interest
c)add big penalties

Can you demonstrate you have taken 'reasonable care' to place the contract outside IR35?

[MarillionFan]

Simple as, I have said before.

In my eyes, 90% of contractors on the board are disguised employees. Regardless of MOO, contract, working hours, timesheets and every other load of bollocks employed by contractors to get around the premise of the IR35 legislation. Why? Because 90% only have one contract at a time, for one client and they all act like employees. In my eyes, you aint a real business until you employ someone else.

So the OP asked whether it would be prudent to declare all outside IR35, and take the chance.

Answer. Yes.

Why?

Because you are never going to challenge them if you say you are inside, but they may challenge you if you say you are outside.

Therefore I always state outside IR35 regardless.

But then again, I have a couple of proper businesses which employee people as well as contracting and would say that anyway.

[centurian]

Is this true? I can't believe there will be no other penalties? Surely there has to be something to deter people doing this? Interesting.

Well there is the threat of penalites. Whether this materialises or not is another matter.

My accountant said that he has noticed that since inspectors were given quotas, a lot of them have been applying the full 100% penalty, even for small amounts of underpayment.

So I think they would definately try and apply a penalty. They're not stupid. They know it isn't a "genuine mistake". How you would stand appealing against this decision - I couldn't say.

[centurian]

In my eyes, 90% of contractors on the board are disguised employees.

Except that 70% of us think we are in the other 10%

[Fred Bloggs]

Can you demonstrate you have taken 'reasonable care' to place the contract outside IR35?

I have a spreadsheet that I fill in that has a checklist of IR35 pointers in it. This is my record of having assessed my IR35 liability. I don't know if it is worth anything in the eyes of HMRC, but I hope that it demonstrates "reasonable care" on my part.

[MarillionFan]

I have a spreadsheet that I fill in that has a checklist of IR35 pointers in it. This is my record of having assessed my IR35 liability. I don't know if it is worth anything in the eyes of HMRC, but I hope that it demonstrates "reasonable care" on my part.

At the end of the day, if you choose to employee yourself differently, then I think you should be rewarded for it when it goes well and if you're benched it's your hard luck.

IR35 sucks. Least we all agree on that.

[Fred Bloggs]

At the end of the day, if you choose to employee yourself differently, then I think you should be rewarded for it when it goes well and if you're benched it's your hard luck.

IR35 sucks. Least we all agree on that.

100%.

[VectraMan]

There's always the alternate solution of letting your company go bust if you get caught, and so not have to pay.

I've never believed that this would work (and that they wouldn't come after you as a director personally). But some people insist that it would. In which case ever being inside IR35 would be rather stupid.

[d000hg]

Can you demonstrate you have taken 'reasonable care' to place the contract outside IR35?

Absolutely!





You didn't want proof, did you?

[northernladuk]

I have a spreadsheet that I fill in that has a checklist of IR35 pointers in it. This is my record of having assessed my IR35 liability. I don't know if it is worth anything in the eyes of HMRC, but I hope that it demonstrates "reasonable care" on my part.

And what if it turns out you are inside?