What are the odds?

[DrStrange]

Ok, so a little bit silly I know but I'm genuinely interested in what people think.

Let's imagine Joe Contractor has been working with the same Big Client for a few years, hasn't really bothered about IR35 until now and is suddenly faced with the fact his client wants to keep him after April, but only on an inside basis. Reluctantly, he decides that's better than what he can get elsewhere right now so takes the inside contract and the net deduction going forward.

Joe's read from folks here that he's now got a big target on his back. He also knows he'll have little argument to provide if HMRC send him a nudge letter asking about previous years.

So he figures his only hope of not being stung with backdated taxes is to simply not be investigated.

What do folk think the chances of investigation are?

Is the consensus that he's now easy money and so is 75% likely to get a letter?

Do we think the HMRC will stand by their "no investigation will result from changed status" chat, so he's down at 10%%

In short, and in your opinion only, what are the odds?

[eek]

Nudge letters will be sent - why wouldn't HMRC try their hand.

The interesting bit about GSK wasn't the fact HMRC sent letters out, it was the fact HMRC had successfully identified who to send them to.

[BrilloPad]

Somewhere between 0% and 100%. Why not start a poll? Dont forget witty AndyW option. Why is this thread in professional and not in general?

[Amanensia]

Purely a personal opinion but I'd say possibly 1-2% chance of being investigated. Once Joe's gone definitively inside HMRC are getting their full NI cut going forward, and that's what IR35 is all about really. I'd expect HMRC to now focus on whatever clients (whether public or private sector) are continuing to take people on outside IR35, and look to challenge this determination where they think they can win. Scaring a few big clients in that way will be a much bigger win for HMRC than going after Joe and his mates piecemeal.

[jamesbrown]

Purely a personal opinion but I'd say possibly 1-2% chance of being investigated. Once Joe's gone definitively inside HMRC are getting their full NI cut going forward, and that's what IR35 is all about really. I'd expect HMRC to now focus on whatever clients (whether public or private sector) are continuing to take people on outside IR35, and look to challenge this determination where they think they can win. Scaring a few big clients in that way will be a much bigger win for HMRC than going after Joe and his mates piecemeal.

In terms of historical years, they'll go for nudge letters w/ those working for large corporates, almost guaranteed. Not because they plan to follow-up with investigations, necessarily, but because nudging works. Going forward, they will focus on large corporates that have taken policy decision to retain contractors and will be turning the screws on them. Why bother identifying and investigating individuals now that they've laid the groundwork for targeting large groups with similar characteristics? So I agree with you on the last part.

[NeedTheSunshine]

Purely a personal opinion but I'd say possibly 1-2% chance of being investigated. Once Joe's gone definitively inside HMRC are getting their full NI cut going forward, and that's what IR35 is all about really. I'd expect HMRC to now focus on whatever clients (whether public or private sector) are continuing to take people on outside IR35, and look to challenge this determination where they think they can win. Scaring a few big clients in that way will be a much bigger win for HMRC than going after Joe and his mates piecemeal.

Again a personal opinion but I'd be surprised if they didn't send nudge letters and start opening enquiries. They have the data and have nothing to lose and quite a lot to gain. They have deep pockets and time on their side. If you have been at a client as outside and then suddenly move inside of course you have a target on your back. It would be naive to think otherwise.

[BR14]

5 to 1 on.

[BlueSharp]

69%

[krytonsheep]

The interesting bit about GSK wasn't the fact HMRC sent letters out, it was the fact HMRC had successfully identified who to send them to.

Does the information an agency provides to HMRC about a contractor include end client name / duration?

[jamesbrown]

Does the information an agency provides to HMRC about a contractor include end client name / duration?

84G, p3.

http://www.legislation.gov.uk/uksi/2.../made/data.pdf