Retrospective IR35 investigations

[Graham1967]

I don't think it matter what he is selling.

Consider what HMRC have been up to for the last five years with the changes to the Intermediaries Legislation. It has been a slow drip drip attack on contractor working practices.

Imagine if they had not changed the allowable expenses through a brolly?

Its been deliberate long game.

Why all the gathering of information from agencies every quarter?

Retrospective tax investigations were never going to be at the top of the list in the Public Sector the long game is the the private sector.

Anyone who thinks that HMRC are going to turn a blind eye on contractors who have been at the same location for years and then go PAYE really are deluding themselves.

If you were in charge of the IR35 unit, what would you do, certainly a career civil servant will be doing cartwheels around the office, and who could blame them.

Reading comments on here and Linkedin makes me realise a lot of contractors are no more than BOS. I myself have been to many places where contractors have been at the same location for nearly 10 years. I then I wonder to myself why HMRC are clamping down hard.

Sorry the games up and it's the so called Permietractors I now see asking for advice on what to do. Anyone in business or their own accord knows exactly what to do. The rest will do exactly what HMRC expects them to do.

[BrilloPad]

I don't think it matter what he is selling.

Consider what HMRC have been up to for the last five years with the changes to the Intermediaries Legislation. It has been a slow drip drip attack on contractor working practices.

The rot started in 2008.

[jamesbrown]

Sorry the games up and it's the so called Permietractors I now see asking for advice on what to do. Anyone in business or their own accord knows exactly what to do. The rest will do exactly what HMRC expects them to do.

Largely agree with what you wrote, but this isn’t just about permietractors. Contractors who look and feel like BoS/BAU temps under the control of their clients are equally being targeted, especially when there’s a large number of them at one client. In that sense, contract length has always been (largely) irrelevant in law and after 6 April it becomes far more practical to pursue a large number of cases at one client, regardless of contract length. Most of these contractors will now be deemed inside. Unfortunately, there will now be a lot of fake employment too, so you shouldn’t feel too smug as a contractor who has operated in neither of these two categories in the past.

[Kanaiya]

I don't think it matter what he is selling.

Anyone who thinks that HMRC are going to turn a blind eye on contractors who have been at the same location for years and then go PAYE really are deluding themselves.

Totally agree. They have planned to catch the fish irrespective of continuing at the same place with Lts company or PAYE. The moment the client says they are inside its very clear to HMRC that all the contractors were inside and they will go retrospective.

[Brewdog]

Potential Retrospective Liability

I'm on an outside IR35 contract since June 2019 and will have done 9 months by the time I have to switch to inside IR35 umbrella or PAYE from 23 Mar. (If I want to stay)

If I take the umbrella option -- and HMRC investigate and want the earlier period as PAYE can I estimate this potential liability as the difference between take home pay via umbrella and limited company using the ContractorCalculator?

If so, I can weigh up this against the lost income if I leave and seek a new contract. Thanks for your help.

[mikedarv]

Anyone who thinks that HMRC are going to turn a blind eye on contractors who have been at the same location for years and then go PAYE really are deluding themselves.

When location is referred to in these terms are we talking same company at different locations (offices) or same company at the same location (office)?

[WTFH]

When location is referred to in these terms are we talking same company at different locations (offices) or same company at the same location (office)?

I suspect with this they will go for the "same company, different locations". It's the obvious way to get people who have been "contracting" for the same company for more than a couple of years, and have maybe moved house, etc.

It would make sense, because if you are really only working for the same company for a significant period of time, then it may as well be a permanent job.

[Paralytic]

Has any evidence been provided yet that HMRC is doing this, or is this still conjecture?

[Ned Kelly]

This information began to be passed across the contractors in our office today and people started panicking and there is enough of that around as it is. I'm afraid I don't believe it is as simple as stated.

I don't know if public sector contractors were given the same guidance from HMRC as private sector ones have, but to start those enquiries now when they are on the verge of getting thousands of new contractors who are on the verge of accepting IR35 would seem crazy. And why are they starting now, when they have had two year? They are going to be overwhelmed with work over the next few months

On the subject of private sector contractors I will repeat the HMRC guidance taken from their official document; ' HMRC will not use information resulting from these changes to open a new enquiry into earlier years unless there is reason to suspect fraud or criminal behaviour.' Working outside IR35 when you believe you are outside is not fraud or criminal behaviour. Their own guidance document would blow a case based on retrospective enquiry to pieces.

We've seen the effect on people that the threat of the Loan Charge had. Please lets not blow this latest issue out of proportion

[cojak]

This information began to be passed across the contractors in our office today and people started panicking and there is enough of that around as it is. I'm afraid I don't believe it is as simple as stated.

I don't know if public sector contractors were given the same guidance from HMRC as private sector ones have, but to start those enquiries now when they are on the verge of getting thousands of new contractors who are on the verge of accepting IR35 would seem crazy. And why are they starting now, when they have had two year? They are going to be overwhelmed with work over the next few months

On the subject of private sector contractors I will repeat the HMRC guidance taken from their official document; ' HMRC will not use information resulting from these changes to open a new enquiry into earlier years unless there is reason to suspect fraud or criminal behaviour.' Working outside IR35 when you believe you are outside is not fraud or criminal behaviour. Their own guidance document would blow a case based on retrospective enquiry to pieces.

We've seen the effect on people that the threat of the Loan Charge had. Please lets not blow this latest issue out of proportion

We're not - you're the one to bring up the subject of criminal behaviour.

What I said was

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What is the problem?

There is no problem if your outside IR35 contract ends before April 2020. It was reviewed and your working practices show that the outside review was a valid one.


The problem as I see it is if you are currently in an outside IR35 contract but your client decides that your role will be inside IR35 at your next extension or after 6th April 2020. HMRC may look at the months before the switch: “if you are inside IR35 now, you should have been inside IR35 then”.

There is evidence that this happened in the public sector when things changed for them
IR35 inspectors to probe public PSCs retrospectively

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