HMRC Investigation - update.

[BlasterBates]

My advice would be to go to a casino and put 11 grand on red. If you win you can forget all about it.

[dmini]

SallyAnne
Check this bit out
http://www.hmrc.gov.uk/ir35/faq_qanda/expenses_q4.htm
Quoted off that
Workers cannot obtain relief for their travel and subsistence where the period at the temporary workplace comprises "all or almost all of the period for which the employee is likely to hold the employment." There have been concerns that this rule will be used to prevent the personal service company worker obtaining tax relief. However the "employment" of the worker is with his or her Personal Service Company, not with the client; the new rules do not change this. They simply deem the income from relevant engagements to be taxable under Schedule E; they do not deem the worker to be an employee of the client.

Thus the "period for which the worker is likely to hold the employment" refers to employment with the service company, not the engagement with the client. Thus the treatment of travel and subsistence for workers will be no different under the new rules than it is today.

My reading of this - proper employees cannot claim. However - because our employment is to the PSC (OK I know we don't like that term) not the agency, we CAN claim expenses even if caught by IR35.

[SallyAnne]

Feck me - so they're seriously saying that if you're a limited company, and you spend more than 40% of your week at a clients base, then it's your permanent place of work and therefore cant claim any expenses?!!!! even if the clients base is on the other side of the country?!

Or are PSC's the same as our limited companies? (I always thought that term meant one of them unbrella thingies).

[bangface]

I didn't have insurance for that year no - got it now, but that doesn't help me much

It was my first years business, so I didn't really know what insurances to get back then (and I hadn't discovered this site for helpful advice!)

I was on £350 a day, and claiming minimum wage plus £2k divvies each month.
Everything I earned pretty much went in expenses, as it cost me a fortune to travel and stuff. I never "came out" with a penny from my year in Manc...just lots of experience (and receipts!)

I'll just see what happens. Like I said last week to Denny, no point worrying. If they're going to get ya they will. Thats the game we're in.

(It's only a months wages really - not the end of the world.)

Monthly divvies? Thats a bit dodgy isn't it? Didn't SJD advise you to take them at less frequent intervals?

[SallyAnne]

Monthly divvies? Thats a bit dodgy isn't it? Didn't SJD advise you to take them at less frequent intervals?

No.

Edit: And how could you? Who could get buy on minimum wage every month?

[BlasterBates]

Good point.

So SA, your place of employment is with the Personal Service Company, i.e. work from home. You have a home office, and the client where you worked is just that a client of the PSC.

Shouldn't be a problem. You do need to go to an Accountant, and it needs to be clear and well argued, otherwise they'll see you in court.

Perhaps then and only then you need to go to the Casino to quickly earn the 11 grand.

[Mustang]

No.

Edit: And how could you? Who could get buy on minimum wage every month?

Thats the whole point of the IR argument - if you cant get by on the wage you pay yourself then the LTD is just a means of avoiding tax!!

What I am doing at the moment is drawing divvies to build up a "nest egg". Once I have that, I will be able to reduce my wage and live off the "nest egg each month" and then draw divvies on a quaterly or bi-annual basis to replenish the "nest egg" plus buy any things I want (techy gadgets, holidays, cars, etc).

Well thats the theory anyway.......!!

[Mustang]

Addendum

Good luck in fighting the case, btw!!

[Maxamus]

Feck me this is getting complicating. I think i better get insurance. Someone point me in the direction of insurance i need for tulip like this please....

[Pondlife]

Sorry to hear this SA.

As others have said, I would be expecting more support from my accountant.