IR35 penalty calculator

[jkb99]

I'm just another contractor who is about to face the blanket bans. My current client has enforced this on me and I'm now trying to find other outside contracts OR worst case I have to join them as a perm. I have just been in the contracting world for about a year and half with turnover of around 180k for the whole period. I strongly believe that I will be outside IR35 and the CEST tool says that too, (although the right of substitution is probably hard to prove as I have never implemented it).My contract clearly does not have any mention of rejecting a substitute and I work from different locations every now and then independently. However, I would want be prepared for the worst if that has to happen anytime. I am worried about the consequences/amount of fines that I might have to pay HMRC in case they still consider me as inside. I would like to roughly run an estimate of the probable costs that I might end up paying. I would probably go bankrupt if that happens :-( but is there a good tool for this or any other clues?

[cojak]

Then work to make it less of a risk?

[WordIsBond]

Did you get in independent review of your contract / working practices by QDOS or similar? At least make sure you keep a printout of the CEST that shows you outside.

You can significantly reduce the historical risk by just closing your company. It's always easy to open a new one....

[SouWester]

...is there a good tool for this or any other clues?

Google HMRC's wins on IR35 cases, read and try to divine what you can from these. Someone on this forum suggested £30k/year + interest, for about your income level (same as me). I have no idea how accurate or otherwise this figure is, there is no ready calculator I'm aware of.

It's gonna hurt, basically. Either in the hammer-blow mode or the long drawn out life-sapping mode.

Are you going to get done? Who knows. IMHO best do what you can to avoid it.

Read the stickies and you will be better informed.

[jkb99]

Did you get in independent review of your contract / working practices by QDOS or similar? At least make sure you keep a printout of the CEST that shows you outside.

You can significantly reduce the historical risk by just closing your company. It's always easy to open a new one....

Yes, I think I m going to close the company but it will not happen before April'20.

I've the CEST tool results, but again the questions around right of substitution are sort of hypothetical in my case. And its probably too late already for QDOS review, isn't it?

[JoJoGabor]

Without knowing your tax arrangements, whether you incomce split etc, finger in the air calculation I would assume 25% of your turnover (excluding VAT) so 0.25 *180k = £45k

[redman123]

Testing

[Andy2]

Dude if you had a blanket ban. There wont be a SDS prepared for you. Your in a decent spot right now

why is there less risk in case of blanket ban.
Does HMRC have visibility to whether your company banned PSC or whether there was SDS and you were inside ir35?

[eek]

why is there less risk in case of blanket ban.
Does HMRC have visibility to whether your company banned PSC or whether there was SDS and you were inside ir35?

You don't have an SDS determination that the client needs to stand up to - and I wouldn't like to fight an IR35 where the client and agency are saying we think you are inside IR35 while you are arguing you are outside.

With a blanket ban while HMRC may come knocking at least they can't use an SDS determination of inside against you as there isn't one.

Would I be more comfortable with a blanket ban - not really as I'm not worried about HMRC taking me to tribunal I'm wouldn't want the years of hassle and pain HMRC would inflict before I got there.

[simes]

I strongly believe that I will be outside IR35 and the CEST tool says that too, (although the right of substitution is probably hard to prove as I have never implemented it).My contract clearly does not have any mention of rejecting a substitute and I work from different locations every now and then independently.

Not having implemented an Offer of a sub, or having it rejected, is not in itself a slam dunk against your being considered for an Outside determination - in the real as opposed to client-fixed world.

I have answered the CEST questionnaire to the question, Does the client have a right to reject a sub? as Yes. Other questions obviously being taken into account, I was determined as Outside.

It would appear from this, all one needs in ones contract is that the contractor has a right to offer a sub, and equally the client has the right to reject.