Reply to: Is IPSE Plus membership worth the extra cost for the initial tax investigation cover?

[malvolio]

I would love to be working, but there is no work out there! Even if something suitable were to come up because of Covid19 I am required to shield for at least 3 months because of a health condition and I need to look after our kids because the nurseries/schools are closed and my wife is a key worker. In order words it would take an extremely flexible contract/client (or job/employer) to allow me to work under these circumstances, which seems very unlikely.

In that case, fair enough.

IPSE put up a guide to CJRS on LinkedIn recently...

EDIT - Found it - it points to here.

[Scoooby]

Mainly HMRC are only concerend that you have correctly answered all the necessary questions around income, outgoings and debts and that all the associated taxes have been paid up to date. They don't really care about what money is left over, they will care about where that money came from.

It rather tickles me that you are solvent, have decided not to work, have an income stream and reserves and are looking to close down while at the same time asking us taxpayers to fund you while you decide...

I would love to be working, but there is no work out there! Even if something suitable were to come up because of Covid19 I am required to shield for at least 3 months because of a health condition and I need to look after our kids because the nurseries/schools are closed and my wife is a key worker. In order words it would take an extremely flexible contract/client (or job/employer) to allow me to work under these circumstances, which seems very unlikely.

[malvolio]

Mainly HMRC are only concerend that you have correctly answered all the necessary questions around income, outgoings and debts and that all the associated taxes have been paid up to date. They don't really care about what money is left over, they will care about where that money came from.

It rather tickles me that you are solvent, have decided not to work, have an income stream and reserves and are looking to close down while at the same time asking us taxpayers to fund you while you decide...

[Scoooby]

Pretty much. They have opportunity to challenge the closure of the company as part of the process so it would require evidence of very unusual goings on for them to investigate post closure.

I know this is going a bit off tangent from my OP, but do people have any experience or knowledge of the kind of things HMRC might review / investigate / challenge as part of a company's MVL liquidation / closure process?

And are these part of a systematic process applied to all MVLs / closures or more random in nature?

For example, I am considering applying for the CJRS furlough scheme as I do believe my company has been directly impacted and is eligible. Although I do have a sizeable warchest and I am also considering paying a dividend soon of approx £8-£15k (on the assumption I might not end up being a higher rate tax payer this year due to limited work opportunities so will probably pay 7.5% tax on this).

I know that neither the sizeable warchest nor the dividend would impact CJRS eligibility per se. However, if I did end up deciding to liquidate the company shortly after potentially doing the above (after assessing the health of the contract market in a few months time) would these actions flag up with HMRC if/when they assess my company's closure request?

I'm trying to weigh up possible short term decisions and benefits against potential knock on impacts further down the line.

[CheeseSlice]

Investigated by who exactly? Not in the next year as they all have been reassigned

I heard this too - i.e. confirmation of them ceasing investigations due to covid, but I can't find the link. Where did you see it?

[ladymuck]

It sounds like Plus membership is probably worth it for the peace of mind.

Apparently they do offer a reduced membership (~£50) for those who have already closed their company (sorry this might have been mentioned elsewhere), but you can only use it for 12 months, with no option/need to renew beyond this. The reason being that HMRC would not investigate any closed company after 12 months of closing down.

Is this correct?

Pretty much. They have opportunity to challenge the closure of the company as part of the process so it would require evidence of very unusual goings on for them to investigate post closure.

[Scoooby]

It sounds like Plus membership is probably worth it for the peace of mind.

Apparently they do offer a reduced membership (~£50) for those who have already closed their company (sorry this might have been mentioned elsewhere), but you can only use it for 12 months, with no option/need to renew beyond this. The reason being that HMRC would not investigate any closed company after 12 months of closing down.

Is this correct?

[malvolio]

Is that (verifiably) true?

Not without a lot of internet digging and reference to places I can no longer access.

Equally, of course, can you disprove the assertion. other than for some very recent cases.

[HoofHearted]

...and every case that has been lost started with the contractor not using an expert representative at the outset...

Is that (verifiably) true?

[malvolio]

more specific responses. With them telling me what was fair for them to ask and what wasn't.

So I could've handled it on my own, but it may well have gone on for longer and I wouldn't have the clout to say "what you're implying isn't right" like they did. There were IIRC 10-15 questions each for me and my accountant and they worked through all of them.

And it all started with a self assessment enquiry.

...and every case that has been lost started with the contractor not using an expert representative at the outset...

[PerfectStorm]

I'm curious to know if it was just a simple, one-off generic style reply from Merkel to the IR35 query, or a more specific response(s) based on your individual situation with potential evidence submitted over a series of back and forth communications?

more specific responses. With them telling me what was fair for them to ask and what wasn't.

So I could've handled it on my own, but it may well have gone on for longer and I wouldn't have the clout to say "what you're implying isn't right" like they did. There were IIRC 10-15 questions each for me and my accountant and they worked through all of them.

And it all started with a self assessment enquiry.

[malvolio]

I'm curious to know if it was just a simple, one-off generic style reply from Merkel to the IR35 query, or a more specific response(s) based on your individual situation with potential evidence submitted over a series of back and forth communications?

Don't know about this specific example, but over the years an awful lot of potential IR35 queries have come to a screeching halt when IPSE's advisors step into the discussion...

Most used to seem to start from a discrepancy on the SATR vs the company CT returns, such as expenses claims or similar. These days, with RTI and iXBRL data recording, it may be more focussed.

[Scoooby]

My investigation didn't begin as an IR35. It was a straightforward "we think you've been coming into money in a way we can't explain" which was actually rather easily explained. They queried my IR35 determination during the "clutching at straws" stage before Merkel told them to bugger off as there was no case to answer.

I'm curious to know if it was just a simple, one-off generic style reply from Merkel to the IR35 query, or a more specific response(s) based on your individual situation with potential evidence submitted over a series of back and forth communications?

[ladymuck]

My investigation didn't begin as an IR35. It was a straightforward "we think you've been coming into money in a way we can't explain" which was actually rather easily explained. They queried my IR35 determination during the "clutching at straws" stage before Merkel told them to bugger off as there was no case to answer.

I'm fairly sure many IR35 investigations start off looking at something innocuous and then, in Columbo style, they have "just one more thing"

[PerfectStorm]

Investigated by who exactly? Not in the next year as they all have been reassigned


Sent from my iPhone using Contractor UK Forum

HMRC may still investigate normal contracts under previous rules or public sector contracts.

My investigation didn't begin as an IR35. It was a straightforward "we think you've been coming into money in a way we can't explain" which was actually rather easily explained. They queried my IR35 determination during the "clutching at straws" stage before Merkel told them to bugger off as there was no case to answer.