IR35 Retrospective Tax Claims

[northernladuk]

Agent wants to set up a working group with a few contractors, the agent and the client

So if I got involved, could put forward your suggestion

Agent did say they were taking professional advice so may well be QDOS anyway, or may well be a 'stay calm and carry on' appeasement

Well this is good news and how it should be done. I do think bringing random contractors to the table has a good chance of actually causing more problems than solving them. IR35 is very complicated and very very few contractors have a good enough grasp of it to really add any value. Going in to that forum suggesting you use a different agent for PAYE is really not going to help.

I'd say the QDOS service offering and send them that just in case. You could try press the agent for a name under the guise of you helping them find someone if they haven't and they might tell you. If you are just asking about their business for your own self preservation they may not be so forthcoming.

[northernladuk]

Thanks for your reply, appreciated.

Yes I appreciate nothing is published yet and this is just 'what I think is going to come and how they will deal with it

I guess I'm trying to understand the situation and risk, based on the above being what does actually happen, and decide what to do / plan for it, as much in advance as I can

Nothing wrong with being forearmed. As you say later so many don't have a clue and they'll be popping up on here like frightened meerkats in Feb/March next year. Don't get too strung up on the details as you appear to be at the moment though. We simply don't know at the point. Gather the info to date, get on the right channels for updates, get your house in order and then just go with the flow as we are all doing at the moment.

You would not believe how disinterested the contractors here are about this (or may be you would) but according to the agent only about 15 out of a few hundred are even taking about it with them

Believe me we would. No surprises there at all. Most of us that are even vaguely aware of IR35 are well aware how little people know and after being on the forums through the public sector roll out we've seen it before.

Interesting question to you, but I bet we already know the answer, of those 15, how many actually have a good grasp of running like a business and the details of IR35. Won't leave many out of 15 I bet... but at least they've started to make the right moves.

[northernladuk]

We really need to clean up the sub fora and be updating the stickies to give people more guidance IMO. I don't think they are fit for purpose for what's coming at present.

[jk3838]

Well this is good news and how it should be done. I do think bringing random contractors to the table has a good chance of actually causing more problems than solving them. IR35 is very complicated and very very few contractors have a good enough grasp of it to really add any value. Going in to that forum suggesting you use a different agent for PAYE is really not going to help.

I'd say the QDOS service offering and send them that just in case. You could try press the agent for a name under the guise of you helping them find someone if they haven't and they might tell you. If you are just asking about their business for your own self preservation they may not be so forthcoming.

yes wasn't going to suggest that in front of current agent

could be suggested through client

[northernladuk]

yes wasn't going to suggest that in front of current agent

could be suggested through client

No it shouldn't for reasons I've already explained and many others like the contract between client and agent is non of your business and it's not business of the clients what your contract with the agent is. Handcuffs maybe in place, agents fighting and so on. But it won't work anyway.

[rootsnall]

If you really are close to retirement ( and to 55, and have enough off a wad to live off ) then start paying £40K into a SIPP. It'll take that chunk out of any potential NI clawback and you can access it from 55. Depending what you are earning you can really limit your NI liability. You could wrap up your Ltd and work through a umbrella if you get your taxable income down low enough.

[JohntheBike]

This.. and the comparison with loan charge is apples and pears. It's a completely different beast. 90% take home is clearly abusive and just those three words warrants investigation. In our situation they have to prove we were inside back in the day by the old rules, something they've not been very good at doing to date so anyone that's carried out their due diligence have a strong case.

If you are bum on seat noddy with 3, 4 and more years at your client then yes you should be worried but you should be worried now, not just past 2020. You're as likely to be investigated and be in trouble now as you are in a years time. I've no doubt we'll see a load of these people posting a month or less before it hits as they've just woken up and noticed how much trouble they are in. We saw it when the public sector hit so no doubt it will be the same in 2020.

"You're as likely to be investigated and be in trouble now as you are in a years time."

I don't agree. I believe individuals are more likely to be investigated, as HMRC will be able to identify those more easily. Many astute contractors have "disguised" their activities by using a company name which didn't readily convey their activities. I didn't BTW. Many who worked close to me, closed down their original companies and changed their company names when they became more aware of IR35 issues. Although many, including myself, would claim that we could fend off such investigations, it wouldn't alleviate the stress of being investigated. This would be the issues in my case.

[jk3838]

If you really are close to retirement ( and to 55, and have enough off a wad to live off ) then start paying £40K into a SIPP. It'll take that chunk out of any potential NI clawback and you can access it from 55. Depending what you are earning you can really limit your NI liability. You could wrap up your Ltd and work through a umbrella if you get your taxable income down low enough.

Not far off 55 at all, do have a decent war chest, no major outgoings and mrs is in a good earning permie role now (she is a bit younger than me, so has a few years earnings left in her yet, and is happy for me to call it a day early if I want) hence my thinking this is the time to bring the end of play of 60 in by five yrs

Going in to see accountant on Friday, will discuss SIPP with him

Thanks for the suggestion

[cojak]

There is no retrospection proposed. When you talk about “retrospection” as any application of the tax law to historical cases, in keeping with the tax law *at the time*, then the term loses all meaning. It reveals a noddy understanding of tax. Retrospection is about back-porting new laws, not enforcing old ones.

Completely agree.

This is the HMRC's stake in the ground:
Prepare for changes to the off-payroll working rules (IR35) - GOV.UK

The announcement date: 19/04/2019
The enforcement date: 06/04/2020


As I've said before, the fact that many contractors will be unaware or ignore that stake and carry on as normal, and then years down the line HMRC haul said contractors over the coals does not make it retrospective.

[JohntheBike]

Completely agree.

This is the HMRC's stake in the ground:
Prepare for changes to the off-payroll working rules (IR35) - GOV.UK

The announcement date: 19/04/2019
The enforcement date: 06/04/2020


As I've said before, the fact that many contractors will be unaware or ignore that stake and carry on as normal, and then years down the line HMRC haul said contractors over the coals does not make it retrospective.

I think you are a little naive if you believe anything that HMRC tells you.