Retrospective IR35 investigations

[Ned Kelly]

HMRC guidance is frequently based in a parallel universe and it is rarely consistent over time.When HMRC guidance says things like "will focus its efforts on ensuring businesses comply with the reform rather than focusing on historic cases", it means "we'll certainly look at historic cases, but we'll also look at some other stuff as well".

I'm willing to accept your argument, but do you have any specific quotes regarding HMRC where they have published specific guidelines and then simply ignored them, without a new act of parliament put in place

[cojak]

My thoughts is how will HMRC know? Through agency reporting they will have a list of NI numbers and when you worked and the agency details, then come May that report will change to show your NI number working for a new agency(the umbrella). HMRC at this stage can only guess surely and send a whole lot of Prod letters, obviously if you respond with yeah i'm still working in the same company doing the same job then you are screwed.

But surely HMRC will not know if you have gone umbrella at the same place or a different place from the info so i'm imagining there might be a whole lotta prod letters going out once they align their data?

I'm contemplating going Perm either at current place or at a new company and I think it is likely i'll get some sort of prod from HMRC for either. Just my answer will be more solid if i'm at a new company.

Happy to be told im wrong btw.

Oh Dear.

I guess you've never hear of the HMRC Connect System?

http://home.bt.com/lifestyle/money/m...11364135046796

Connect (computer system) - Wikipedia

(Although my post here still stands.)

[BR14]

Going forward, yes. It's a big difference if HMRC opens an IR35 on the historical engagement, because in one case, the client has explicitly said they think it is inside, and in the other, the client has made a policy decision.

Staying in either case may be a risk but staying with an inside determination is a death wish, IMO, if you've been there long on an outside contract.

[WordIsBond]

oh, Really?
has the same effect thought.

Going forward, yes. It's a big difference if HMRC opens an IR35 on the historical engagement, because in one case, the client has explicitly said they think it is inside, and in the other, the client has made a policy decision.

Staying in either case may be a risk but staying with an inside determination is a death wish, IMO, if you've been there long on an outside contract.

[BR14]

saying no more ltds is NOT the same as saying all roles are inside IR35

oh, Really?
has the same effect thought.

[Smuz]

Hi Mr HMRC here. It looks like you have switched from Ltd to umbrella at company x. Company x seem to have stated this role is inside ir35. Here is your retrospective tax bill for the time spent at company x.

Please do the needful thanks very much.

My thoughts is how will HMRC know? Through agency reporting they will have a list of NI numbers and when you worked and the agency details, then come May that report will change to show your NI number working for a new agency(the umbrella). HMRC at this stage can only guess surely and send a whole lot of Prod letters, obviously if you respond with yeah i'm still working in the same company doing the same job then you are screwed.

But surely HMRC will not know if you have gone umbrella at the same place or a different place from the info so i'm imagining there might be a whole lotta prod letters going out once they align their data?

I'm contemplating going Perm either at current place or at a new company and I think it is likely i'll get some sort of prod from HMRC for either. Just my answer will be more solid if i'm at a new company.

Happy to be told im wrong btw.

[mrdonuts]

If it's with the same client then you are low hanging fruit. How would you explain why the contract that you deemed outside for the last few years (for example) and operated via your Ltd company is now being operated via an umbrella. Oh, client says no Ltd companies. Wonder why they did that.....HMRC look at you and decide that you should have been inside all along.

Going to a new client via an umbrella is different.

saying no more ltds is NOT the same as saying all roles are inside IR35

[NeedTheSunshine]

why would taking a role via an umbrella be classed as inside ir35?

taking a role via an ltd that is assessed as inside ir35, i can understand why that would raise HMRC eyebrows but not the former

If it's with the same client then you are low hanging fruit. How would you explain why the contract that you deemed outside for the last few years (for example) and operated via your Ltd company is now being operated via an umbrella. Oh, client says no Ltd companies. Wonder why they did that.....HMRC look at you and decide that you should have been inside all along.

Going to a new client via an umbrella is different.

[BlueSharp]

why would taking a role via an umbrella be classed as inside ir35?

taking a role via an ltd that is assessed as inside ir35, i can understand why that would raise HMRC eyebrows but not the former

Hi Mr HMRC here. It looks like you have switched from Ltd to umbrella at company x. Company x seem to have stated this role is inside ir35. Here is your retrospective tax bill for the time spent at company x.

Please do the needful thanks very much.

[ChimpMaster]

oh, good grief!

But he has a point.

Avoid the SDS and move to an Umbrella before April. Not ideal but not the worst impact.


BTW

contracting is dead.