The Review and "Retro" IR35 Investigations

[SouWester]

Well, they'll have six years, won't they?

Will they have six years?

I have googled "time limit on HMRC investigations" but only come up with how far back they can go to recover money (4, 6 or 20 years), rather than how long after the event they can trigger an investigation.

I also found some stuff saying they will raise issues with "customers" 'within 12 months of submitting your return', but not sure that applies to IR35, as this looks like an "i've made a boo-boo on my self-assessment" thing, rather than "I'm a greedy/heartless contractor" IR35 thing.

For those April 2017 public sector peeps, if HMRC doesn't invoke 'carelessless' or 'negligence', then 4 years means that as of April 2020 they only have one year worth of liability to worry about?

Would be helpful to share if anyone knows?

[eek]

Will they have six years?

I have googled "time limit on HMRC investigations" but only come up with how far back they can go to recover money (4, 6 or 20 years), rather than how long after the event they can trigger an investigation.

I also found some stuff saying they will raise issues with "customers" 'within 12 months of submitting your return', but not sure that applies to IR35, as this looks like an "i've made a boo-boo on my self-assessment" thing, rather than "I'm a greedy/heartless contractor" IR35 thing.

For those April 2017 public sector peeps, if HMRC doesn't invoke 'carelessless' or 'negligence', then 4 years means that as of April 2020 they only have one year worth of liability to worry about?

Would be helpful to share if anyone knows?

It's reading CH51300 - Compliance Handbook - HMRC internal manual - GOV.UK

Just to really scare everyone from the 20 year bit

The 20-year time limit applies where

any of the taxes in CH51200 has been lost as a result of the deliberate behaviour of the person, see CH51600, or another person acting on their behalf, see CH53200, or

CH51600 includes income tax and Class 4 NICs

[BrilloPad]

Will they have six years?

I have googled "time limit on HMRC investigations" but only come up with how far back they can go to recover money (4, 6 or 20 years), rather than how long after the event they can trigger an investigation.

I also found some stuff saying they will raise issues with "customers" 'within 12 months of submitting your return', but not sure that applies to IR35, as this looks like an "i've made a boo-boo on my self-assessment" thing, rather than "I'm a greedy/heartless contractor" IR35 thing.

For those April 2017 public sector peeps, if HMRC doesn't invoke 'carelessless' or 'negligence', then 4 years means that as of April 2020 they only have one year worth of liability to worry about?

Would be helpful to share if anyone knows?

Once an enquiry opened, there is nio time limit. I am 12 years into mine now - still waiting result of FTTT.

[SouWester]

Once an enquiry opened, there is nio time limit. I am 12 years into mine now - still waiting result of FTTT.

You poor b*stard. Seriously, feel for you.

[SouWester]

Just to really scare everyone from the 20 year bit

I'm not scared of HMRC... I'm terrified.

However, I've still reading this as people who moved awat from a PSC on April 2017 only have 12 months worth of liability to worry about (if the 4 year rule is applied of course).

There's an example is here that bears this out: CH51820 - Compliance Handbook - HMRC internal manual - GOV.UK

[eek]

I'm not scared of HMRC... I'm terrified.

However, I've still reading this as people who moved awat from a PSC on April 2017 only have 12 months worth of liability to worry about (if the 4 year rule is applied of course).

There's an example is here that bears this out: CH51820 - Compliance Handbook - HMRC internal manual - GOV.UK

That's VAT which has a 4 year limit. Look at the page I linked to and see where it mentions income tax against both the 6 and 20 year sections.

[NeedTheSunshine]

Once an enquiry opened, there is nio time limit. I am 12 years into mine now - still waiting result of FTTT.

I have been down the Loan Charge and enquiry route. Once HMRC open an enquiry or discovery assessment they can sit on it for years. Then, much later when they have a big backlog they can come up with some retrospective law to close down all open enquiries. Or they can pick a case to take to tribunal (which costs £££££ and will drag on for years) and if they win they could decide that the ruling applies to all contractors who were contracting at company x at that time.

HMRC don't play fair and 2+2 = 5 is no problem for them. Being on the receiving end of their behaviour is extremely stressful. They have deep pockets and time on their side. The onus will be on you to prove that you don't owe the money.

There will be nudge letters coming out. Although I don't think it will be anytime soon.

I think that unless you have been on the receiving end of HMRC you don't actually realise how skewed against you it can get. I certainly didn't.

[SouWester]

That's VAT which has a 4 year limit. Look at the page I linked to and see where it mentions income tax against both the 6 and 20 year sections.

Yeah OK that's not good...

I think that unless you have been on the receiving end of HMRC you don't actually realise how skewed against you it can get. I certainly didn't.

...I'm convinced.

Well then, reducing risk seems like even more of a good idea. A VERY good idea. A VERY **** good idea.

Pity those poor zombietractors sleepwalking into this. Yes, pity. I don't think I would wish that on anyone.

[SouWester]

It's reading CH51300 - Compliance Handbook - HMRC internal manual - GOV.UK

"CH54200 provides details of the time limits that apply to deceased persons."

Damn that's cold. They'll pursue you even into the afterlife.

[ladymuck]

...
I'd be surprised if Dave Chaplin hasn't picked this up for example?
...

Happy to be told otherwise but isn't he an insurance salesman rather than an employment / contract law specialist?


Great post WiB, definitely food for thought. Thank you.