Outside to Inside IR35 - Same Client, Different Agent, Different Contract

[Moss]

Why are so many people accepting inside contracts????

Well - in my particular circumstances the location and company suit my current needs perfectly. On top I've managed to secure a rate increase (although to be fair - this wasn't a deal breaker given the other benefits).

I never tried pushing back on the decision, but I've been aware of the difficulties they've had in (a) understanding and (b) adapting to the these new rules over the last few months, and don't believe they would change now they've come to their decision.

[Moss]

Moss,
It all depends on your view on risk - changing the agency would help, but is it still the same contract - maybe compare old and new 'LOT' numbers on the contract Description?

Thanks - I'm assuming the contract will be a completely new/different one from the new agency (I don't have sight of the underlying client-agency contract).

[Moss]

Looking at the information that HMRC would have from a pure data point of view:

- Currently, they know your NI number, the agency reporting the information, the amount paid. They do not know the client, the job, the title, how you work etc.
- You move from agency to an umbrella company - you disappear from the agency reporting requirements because the umbrella now deducts PAYE and NI for you. You appear on umbrella RTI as an employee. HMRC are unaware of the client, the job, the title, etc
- You close the current company down - HMRC are aware that the company is closed and any money you get from that closure, via your self assessment next year
- In the future, you create a new company, take a contract on via an agency outside IR35. You appear again on the agency reporting requirements with your NI number and amount. HMRC don't know anything about what you are doing (unless the reporting requirements change in the future)

Is it possible for someone / something to tie all those things together and trigger an investigation into the way you worked before you moved to the umbrella company? Yes. But I would consider the likelihood of something like that happening when there are plenty of other cases that will be much easier for HMRC to investigate.

Thanks to everyone for the great feedback - useful stuff!

With regard to this scenario - do you gain a lot by actually closing the company down? Would it be much different to keeping the company going and then invoicing through it again on a future contract?

Would HMRC not have similar issues trying to piece it together in the same way (i.e. tying your stint with the brolly to the previous limited contract) as it all seems to be NI based anyway?

[northernladyuk]

Looking at the information that HMRC would have from a pure data point of view:

- Currently, they know your NI number, the agency reporting the information, the amount paid. They do not know the client, the job, the title, how you work etc.
- You move from agency to an umbrella company - you disappear from the agency reporting requirements because the umbrella now deducts PAYE and NI for you. You appear on umbrella RTI as an employee. HMRC are unaware of the client, the job, the title, etc
- You close the current company down - HMRC are aware that the company is closed and any money you get from that closure, via your self assessment next year
- In the future, you create a new company, take a contract on via an agency outside IR35. You appear again on the agency reporting requirements with your NI number and amount. HMRC don't know anything about what you are doing (unless the reporting requirements change in the future)

Is it possible for someone / something to tie all those things together and trigger an investigation into the way you worked before you moved to the umbrella company? Yes. But I would consider the likelihood of something like that happening when there are plenty of other cases that will be much easier for HMRC to investigate.

Thanks. If I understand it, IR35 investigations are against the Ltd, not the individual, so HMRC would also have to go through the added effort of investigating a closed Ltd, which may be technically possible, but how often does it actually happen and in what circumstances?

[TheFaQQer]

Thanks. If I understand it, IR35 investigations are against the Ltd, not the individual, so HMRC would also have to go through the added effort of investigating a closed Ltd, which may be technically possible, but how often does it actually happen and in what circumstances?

I don't know of any cases where the company has been closed down. It's generally regarded as best practice to make sure that you keep insurance for a year after closing down just in case, but I don't know whether anyone has ever gone through an investigation once the company is closed.