"HMRC will stand by the result given"

[jamesbrown]

Predictable. I'm very concerned about the false sense of security that the whole "we'll stand by the result" line has created. Particularly now the tool is so reliant on substitution which (I know from personal experience) HMRC inspectors spend months painstakingly trying to disprove.

There seems to be a misinterpretation that the tool has changed case law, or changed the way HMRC would attack an engagement in an enquiry.

To place any faith in a binary yes/no answer to the substitution question is risky, to say the least.

Seb

The problem with the tool is that it's patently inconsistent with case law on the necessary lack of fettering of the RoS and how expertise is treated w/r to D&C (to mention two issues). I think the real risk is one of confusion about the meaning of the questions/guidance and HMRC subsequently using the results from the online tool to probe for specific "untruths" told, whether as a means of undermining the credibility of the case or seeking additional penalties. We'd be better off with a blank canvas, proceeding directly to case law. Also, while the legislation itself may be difficult to challenge in the courts, the ESS is another matter and I see this as being the weakest link from a legal POV.

[WordIsBond]

To place any faith in a binary yes/no answer to the substitution question is risky, to say the least.

I agree, absolutely. I have three printed results in my IR35 file.

The first is with the substitution answered yes.

The second is to pull out if they challenge the substitution argument, and say, "Ok, well, I thought you might try to argue that. So I ran it again and answered 'no' on that one. You're wrong on substitution, but even so, here's the result if you were right on it."

The third is if they challenge my answers on SDC. In it, I said no to substitution and answered as if I were subject to SDC. I still end up outside on financial risk.

Saves me money, I won't be buying IR35 insurance from you anymore. Sorry.

[WordIsBond]

The problem with the tool is that it's patently inconsistent with case law on the necessary lack of fettering of the RoS and how expertise is treated w/r to D&C (to mention two issues).

And, it completely ignores MoO.

And, it says "unwilling but not unable" on substitution.

And, it only counts the provision of equipment if your company didn't own it previously, which AFAIK has no basis in case law.

And, it basically concedes that the BET was a complete fiction by not giving any credit at all to items in the BET which would have ruled you out of IR35, like employing other fee earners.

[Tinkerbell3]

Some concerns about the integrity of the tool's output: Only option seems to be to print!
Ideally, one should be able to email a copy, especially since there is no unique reference/ id and HMRC aren't keeping copies of the result/ transaction.
This means they could easily dispute the authenticity of the results themselves!

[RonBW]

I agree, absolutely. I have three printed results in my IR35 file.

The first is with the substitution answered yes.

The second is to pull out if they challenge the substitution argument, and say, "Ok, well, I thought you might try to argue that. So I ran it again and answered 'no' on that one. You're wrong on substitution, but even so, here's the result if you were right on it."

The third is if they challenge my answers on SDC. In it, I said no to substitution and answered as if I were subject to SDC. I still end up outside on financial risk.

Saves me money, I won't be buying IR35 insurance from you anymore. Sorry.

I did exactly the same - I have three assessments from the tool that I could argue each one as being accurate but having an "I thought you might say that" approach with fall backs can't hurt.

[pscont]

HMRC are fecking morons:
this was the text of the tool on the 3 march.

About this result HMRC won’t keep a record of this transaction for security reasons.

HMRC will stand by the result given unless a compliance check finds the information provided isn’t accurate.

HMRC can review your taxes for up to 20 years

and this is it on 9 march

About this result HMRC won’t keep a record of this transaction for security reasons.

HMRC will stand by the result given unless a compliance check finds the information provided isn’t accurate.

HMRC won’t stand by results achieved through contrived arrangements designed to get a particular outcome from the service. This would be treated as evidence of deliberate non-compliance with associated higher penalties.

HMRC can review your taxes for up to 20 years

Scaremongering?

[northernladuk]

Don't be a hater.....

Seems to be a pretty standard caveat. You lie or concoct some dodgy get around then you are gonna have your pants pulled down. Doesn't seem unreasonable.

[RonBW]

Scaremongering?

Sounds pretty obvious - if you are cooking up a scheme just to get round the tool then of course HMRC aren't going to stand by the decision that it kicks out.

If you are contriving to evade tax, then there are higher penalties involved.

[pscont]

I agree the test should be answered honestly by the end client.

But who and how will prove there was fixing of answers?
Or it is HMRC pulling the verdict out of their arse?

[MeMeMe1966]

Contrived Arrangements?

"HMRC won’t stand by results achieved through contrived arrangements designed to get a particular outcome from the service. This would be treated as evidence of deliberate non-compliance with associated higher penalties."

So if in 6 months time PSBs are actually structuring engagements (where appropriate) to have deliverable based payments and minimal SDC in order to pay a lower fee for a genuinely outside gig, is this a contrived arrangement?

I think I'm asking because I assumed that this legislation would naturally necessitate a bit of culture change and lead to different ways of working. Does this statement stop that?