Reformed IR35: Can it be challenged?

[drmouse]

If a client decides you are inside IR35, is there any way to challenge this (except for the client-led dispute process)? For instance, could you go to a FTT to argue that you should've been outside to claim back the tax?

[Paralytic]

If a client decides you are inside IR35, is there any way to challenge this (except for the client-led dispute process)? For instance, could you go to a FTT to argue that you should've been outside to claim back the tax?

From a client perspective, all the law says is that they must have an appeals process.

If/when they come back with a repeat of their initial determination, I'm sure you could easily get a lawyer to take it to FTT. The real question is whether you have the £10Ks-100Ks do support such a process? I'd not hold much hope of such a claim getting the tax back. You'd be better off spending the lawyer fees on trying to employee rights.

[northernladuk]

No. But I imagine JohntheBike says otherwise.

There is probably a process but chances of you still being in said gig by the time you get passed the client lead one will be nil.

[BR14]

No. But I imagine JohntheBike says otherwise.

.

and at tedious length

[drmouse]

Yeah, I get that few would want to do this, it would be an absolute PITA (expensive, time consuming, with little chance of success). I'm thinking more theoretically, here: Would it even be possible to challenge it?

[Amanensia]

I'm not sure. My initial reaction is that you probably can't really challenge HMRC directly as they aren't deeming you inside or outside. The party deeming you inside is the client so your beef is with them. Suing your client rarely ends well.

There may possibly be some scope for taking legal action against HMRC on the grounds that their guidance to clients doesn't accurately reflect the legal definitions of inside or outside IR35, for example due to lack of consideration of MoO, and that this shortcoming has resulted in a misclassification by the client who relied on the guidance from HMRC. That's a fight I'd rather leave to someone with much deeper pockets than me...

[JohntheBike]

No. But I imagine JohntheBike says otherwise.

There is probably a process but chances of you still being in said gig by the time you get passed the client lead one will be nil.

I don't know here they get these figures. It cost me a fixed fee of £2000 to bring a claim in the ET and the subsequent costs of preparing the case for the EAT were £6000. So, a total of £8000, which paled into insignificance to the £12000 pa projected increase in taxation that would accompany being found subject to IR35. There was no contest was there?

However, I agree with compliancelady and suspect that this scenario is unlikely to happen as all gigs will either be outside, umbrella or PAYE.

[BR14]

I don't know here they get these figures. It cost me a fixed fee of £2000 to bring a claim in the ET and the subsequent costs of preparing the case for the EAT were £6000. So, a total of £8000, which paled into insignificance to the £12000 pa projected increase in taxation that would accompany being found subject to IR35. There was no contest was there?

[JohntheBike]

and at tedious length

I couldn't shorten it much, but I've added further comment.

[JohntheBike]

If a client decides you are inside IR35, is there any way to challenge this (except for the client-led dispute process)? For instance, could you go to a FTT to argue that you should've been outside to claim back the tax?

For instance, could you go to a FTT to argue that you should've been outside to claim back the tax?

this would only be possible if an ET judged that you were an full employee for any period. You could then argue in the FTT that all the taxes that were paid for that period should not have been deducted and that you were paid nett of taxes. However, when I pointed this out a tax inspector, he indicated, without elaborating, that that course of action wouldn't be successful.