Help - Outside to Outside - Stay or Go ?

[northernladuk]

7 years non stop at a client. Outside? I very much doubt it.

[IASRAM]

7 years non stop at a client. Outside? I very much doubt it.

On that note,

1) the first 5 years I was using my old LTD which has been closed. Then opened a new one and operating through that LTD so far. Will it matter at all in terms of length of retrospection ?

2) my new LTD has two directors (spouse) and we both contract at the same client... for past 2.5 years... is this making the situation even worse ?

3) my role has also been changed 2 years ago.. not for the sake of it.. it has changed for real both on the paper and in working.

[Lance]

On that note,

1) the first 5 years I was using my old LTD which has been closed. Then opened a new one and operating through that LTD so far. Will it matter at all in terms of length of retrospection ?

Normally an company closde that long would be safe. If you get investigated though, and they realise what you've done they may dig further back.

2) my new LTD has two directors (spouse) and we both contract at the same client... for past 2.5 years... is this making the situation even worse ?

nope.

[northernladuk]

On that note,

1) the first 5 years I was using my old LTD which has been closed. Then opened a new one and operating through that LTD so far. Will it matter at all in terms of length of retrospection ?

Opens a new can of worms as to why you closed it. It wouldn't be too difficult to 'pierce the coporate veil' and look at you as a person irrespective of the companies I would imagine. Can't remember how far they go back for IR35 and tax but either way, Christa Ackroyd worked for Look North for 5 years and was liable for £400k tax. She things 200k. The numbers are enough to not worry if it's 5 or 7.
Will they look at 5 or 7? Who knows.

2) my new LTD has two directors (spouse) and we both contract at the same client... for past 2.5 years... is this making the situation even worse ?

IR35 is on a contract by contract basis. This is IR35 101. The fact you don't know this makes me believe even more there isn't a chance you are really outside.
If HMRC have any sense they will spot her on the company books and investigate that as well but I'm only guessing here.

3) my role has also been changed 2 years ago.. not for the sake of it.. it has changed for real both on the paper and in working.

Makes no difference IMO. They will be looking at you as being part and parcel with MoO and Direction and Control strongly in place rather than per gig.

That said HMRC have a spectacular record for screwing up their cases so even if some of the above might be true, HMRC being able to put an argument together that will stand is another thing.

[Paralytic]

that would be even better.
But as explained earlier, you're going to be at very low risk anyway. Why would HMRC go after you when your client also agrees that you're outside?

Perversely, a client determining someone outside (depending on who you believe) could make it more likely that HMRC would investigate that client, because the number of clients with outside determinations after April will be significantly fewer than the number of clients with contractors who self-determine outside today

Of course, if HMRC then find the client has wrongly determined you outside, then the client is liable. But, all of a sudden, you've got a target on your back for the previous 7 years...

Just something to consider.

[IASRAM]

Of course, if HMRC then find the client has wrongly determined you outside, then the client is liable. But, all of a sudden, you've got a target on your back for the previous 7 years...

Just something to consider.

What if the working practices are reflecting a genuine self-employment when HMRC investigates the client post April ? Will they still look at pre-April ?

[jamesbrown]

What if the working practices are reflecting a genuine self-employment when HMRC investigates the client post April ? Will they still look at pre-April ?

You are not a low hanging fruit. There are many lower.

[Lance]

Perversely, a client determining someone outside (depending on who you believe) could make it more likely that HMRC would investigate that client, because the number of clients with outside determinations after April will be significantly fewer than the number of clients with contractors who self-determine outside today

Of course, if HMRC then find the client has wrongly determined you outside, then the client is liable. But, all of a sudden, you've got a target on your back for the previous 7 years...

Just something to consider.

Gonna be very hard for HMRC to win against the client. Unless a contractor stitches them up.
The client simply states that they are willing to accept a suitably qualified substitute. As long as that's not a demonstrable falsehood, it's game over.

[IASRAM]

You are not a low hanging fruit. There are many lower.

Last question on this.

Thanks. The reason I kept asking the questions around this is because nearly 40 contractors are happy that the client is making an outside assessment and working practices will be genuinely self-employed, but only from end of March/beginning of April. The client is making sure that there will be no issues post April.

In the case of HMRC looking at this Client (they will be onsite in April for planned audit) and don't find any issues with post April contracts and working practices, people are concerned that they may look at pre-April too and the Client may say it is not their problem.

We are trying to get the Client agree that the current working practices are also Outside IR35.. but if they don't want to sign anything ?

[jamesbrown]

Last question on this.
We are trying to get the Client agree that the current working practices are also Outside IR35.. but if they don't want to sign anything ?

Yes, that would be preferable. Absent that, you can only do your own due diligence, which is to retain your contract review and evidence of your WP. Ideally, you would've had something from the client to begin with, such as a Confirmation of Arrangements letter or a completed CEST, but most people won't have that. I don't think you're in a bad position, providing you completed your due diligence. Afterall, you will presumably be doing the same thing in the same way, post-April, so the client has indirectly confirmed your earlier status by confirming your status under the same terms post April. I understand the concern, given the length of contract, but I would say it's significantly less risky than (e.g., a short-term contract) moving from outside to inside with the same client/agent.