Every single IT project manager at a bank ever

[NowPermOutsideUK]

Judgement here https://assets.publishing.service.go...ted_v_HMRC.pdf

[vetran]

I'm no expert, but I'm guessing to sue you have to prove a loss, and you can't prove a loss when it's a point of law that says you have to pay that money

You have to prove fault and loss. The contractor had entered into a contract that stated they had a right to substitute, the Agency & Client had no intention of obeying that (their internal communications or contract shows that) so the tribunal decides the contractor had no ROS and was caught by IR35. If contracts are advertised as outside IR35 so the Agent & Client can gain advantage yet they are lies who is responsible?

If you had a contract that said your employer was going to pay £70k and contribute 8% to your pension. If you then turn up and find that they want to pay £20k with no pension would you (and the court) not feel the contract had been broken?

[_V_]

Nice to see IT contractors discussing IR35 again.

[NowPermOutsideUK]

Does anyone actually know how far back investigations can start with HMRC? Is it 6 years like it is for most other civil cases or is it further?

I mean if an investigation was started today what periods could they query? Is it 2015 or even before that?

[northernladuk]

But this makes even less sense. If my spouse is getting dividends from my company, she is in no way involved with the contract work itself - how could that income be treated as PAYE?

Depending on factors involved but shouldn't the gross amount be taxed before the wife even got involved so she shouldn't have received it in the first place. They've got to rewind the clock and treat the income as it should have been done i.e. taxed and contractor ends up with net so they couldn't have paid their wives the dividend? If you get me.

[northernladuk]

Does anyone actually know how far back investigations can start with HMRC? Is it 6 years like it is for most other civil cases or is it further?

I mean if an investigation was started today what periods could they query? Is it 2015 or even before that?

Isn't it something like 6 normally but as far back as 12 if there has been fraud or something dodgy?

But it's the length of the contract normally so you aren't going to get many contractors in gigs for 6 years plus.

[cannon999]

Depending on factors involved but shouldn't the gross amount be taxed before the wife even got involved so she shouldn't have received it in the first place. They've got to rewind the clock and treat the income as it should have been done i.e. taxed and contractor ends up with net so they couldn't have paid their wives the dividend? If you get me.

Yeah I get that but that seems... wrong? The taxes are being paid twice.

[eek]

Depending on factors involved but shouldn't the gross amount be taxed before the wife even got involved so she shouldn't have received it in the first place. They've got to rewind the clock and treat the income as it should have been done i.e. taxed and contractor ends up with net so they couldn't have paid their wives the dividend? If you get me.

If inside IR35 it should be being paid out as salary / pension (except for the 5% allowance that went in the new rules).

So there wouldn'r be any money for dividends as it went in more highly taxed salary instead.

[northernladuk]

Yeah I get that but that seems... wrong? The taxes are being paid twice.

Well that was the discussion point but can't find it. In theory they should work the taxes out and then credit you for taxes already paid but nothing is that straight forward with HMRC. I'd imagine the fact you've paid a different tax than the ones HMRC think you should have puts a ton of complexity in to it and they can't just count corp tax as an offset to the taxes you owe or something so who knows.

The taxes can't really be counted as paid for the dividends as inside Ir35 means no money for dividends so they would be classed as illegal and it all goes to hell in a handcart. There must be some very complex process of running everything back to day one and starting again.. but that's a total guess with an optimistic outcome. I think it's more likely they'll demand the full amount and it's up to you to then do the paperwork and claw the taxes paid back.

[cannon999]

Well that was the discussion point but can't find it. In theory they should work the taxes out and then credit you for taxes already paid but nothing is that straight forward with HMRC. I'd imagine the fact you've paid a different tax than the ones HMRC think you should have puts a ton of complexity in to it and they can't just count corp tax as an offset to the taxes you owe or something so who knows.

The taxes can't really be counted as paid for the dividends as inside Ir35 means no money for dividends so they would be classed as illegal and it all goes to hell in a handcart. There must be some very complex process of running everything back to day one and starting again.. but that's a total guess with an optimistic outcome. I think it's more likely they'll demand the full amount and it's up to you to then do the paperwork and claw the taxes paid back.

Sounds scary. My contract is probably going to be running for many more years to come due to the amount of new work that always comes through (I am a software developer) but I can't quit a 600/d rate just because hypothetically someone might come for me in the future. My contract is very much outside of IR35 but I am starting to think that maybe I should use a substitute for a couple of days just to cover my own back.