Reply to: IR35 Investigation

[Lockhouse]

Good point. What would concern me is that the IR are phoning up all previous contracts saying I am been investigated. I know its hardly a murder ccharge but it could harm the reputation as they are effectively implying you are avoiding tax.

This happened to me - I lost all hope of going back to two clients because of it - and having to exert pressure to get the information in my defence. The problem is one of proof - how do you prove that you have lost business? It's intangible as you never had it in the first place. No consideration was given to any commercial concerns that my company may have had at all. It made me very bitter towards the Revenue - OK, you can investigate me for tax, but you have no right to destroy my business and reputation - especially as I work in an area where I used to get most of my work through word of mouth recommendation. B*stards all of them <rant over>.

[youngguy]

Just thinking, say you were subject to an investigation would you get the chance to say "it's a afair cop" and pay whatever was owed before it went any further or is it more complicated than that?

Good point. What would concern me is that the IR are phoning up all previous contracts saying I am been investigated. I know its hardly a murder ccharge but it could harm the reputation as they are effectively implying you are avoiding tax.

[gingerjedi]

Just thinking, say you were subject to an investigation would you get the chance to say "it's a afair cop" and pay whatever was owed before it went any further or is it more complicated than that?

[pisces]

In the first instance the company will be liable.

Should that become insolvent, HMRC (& the insolvency service) will come after you personally.

This never used to be the case for low value debts, but it is now. Also, if your company registered address is your home address this can complicate things vastly....................

My work collegue was prosecuted for non payment of tax arrears when he shut his company down and went permie but didn't pay his final tax bills. He won his case in court as they ruled that the company was no longer in business.

[gingerjedi]

The HRMC guide is so vague and if I was completely honest I would fall into the grey area so I am bound to go with the most tax efficient solution, they say if you don't know where you fall to contact your local IR enquiry centre and let them decide... hmm I can't see them ever deeming someone outside if it was as simple as that and its not as if you can ignore their advice after you have just given them your details.

They should have a point’s based system to make it easier and stop making people feel like criminals.

[Bluebird]

can you send someone else in in your place?
Not really though agency have saidin contract may send subsitute

This is NOT about the agency sending a replacement it's about YOUR company doing so - i.e. you would go to a recruitment agency and get somebody to do it for you.

[simondolan]

I don't report to anyone just give an update on how we are in regards to timelines as I need a lot of information before I can do my job hence delay in getting the information results in a delay in my project.

if you are not in by a certain time would questions be asked? No
if you worked at home for a week would there be concern? No as need client software.
can you send someone else in in your place? Not really though agency have saidin contract may send subsitute
do you have to remedy errors etc in your own time and at your own expense not sure as never come up so far.
tahnks for your help.

A good start would be to have your contract reviewed. Mail it over if you like and I'll take a look FOC for you.

simonatsjdaccountancy.com

[simondolan]

hey azzik

if you time on site is dictated to be the end client you will probably be inside IR35 - in fact loads of agency contracts are inside IR35 for the more standard (helpdesk, 1st/2nd line support etc) as these roles do require you to be on site at a certain time and work a certain shift pattern - also breaks are controlled and in some case call figures etc are monitored....

probably

Nope - time on site has nothing to do with IR35 at all. Most roles need to be carried out on site for security or practical issues, but this has no bearing on employment status.

[AZZIK]

hey azzik

the list is long! try these for a start

do you report to anyone on a daily basis or just give update/progress reports when needed?
if you are not in by a certain time would questions be asked?
if you worked at home for a week would there be concern?
can you send someone else in in your place?
do you have to remedy errors etc in your own time and at your own expense

I don't report to anyone just give an update on how we are in regards to timelines as I need a lot of information before I can do my job hence delay in getting the information results in a delay in my project.

if you are not in by a certain time would questions be asked? No
if you worked at home for a week would there be concern? No as need client software.
can you send someone else in in your place? Not really though agency have saidin contract may send subsitute
do you have to remedy errors etc in your own time and at your own expense not sure as never come up so far.
tahnks for your help.

[jh0711]

hey azzik

the list is long! try these for a start

do you report to anyone on a daily basis or just give update/progress reports when needed?
if you are not in by a certain time would questions be asked?
if you worked at home for a week would there be concern?
can you send someone else in in your place?
do you have to remedy errors etc in your own time and at your own expense

[Lockhouse]

I am not on helpdesk, I work as a database designer but develop databases as per clients requirements using their software but it is on their site. I get to control my breaks ie when I take my lunch and can leave early if I want to though I like to do all me hours. My agency has assure my my contract is IR35 friendly and they have had it checked by lawsped but I am not so sure. I find this whole thing is confusing and taking a while to get my head round. I want to try and make sure I fall outside IR35 has anyone got any pointers that can help me with this as I know IR look at the actual work you do more than whats on your contract.

My advice: Join the PCG.

[Bluebird]

you can start here...

http://www.hmrc.gov.uk/pdfs/ir56.pdf

[AZZIK]

I am not on helpdesk, I work as a database designer but develop databases as per clients requirements using their software but it is on their site. I get to control my breaks ie when I take my lunch and can leave early if I want to though I like to do all me hours. My agency has assure my my contract is IR35 friendly and they have had it checked by lawsped but I am not so sure. I find this whole thing is confusing and taking a while to get my head round. I want to try and make sure I fall outside IR35 has anyone got any pointers that can help me with this as I know IR look at the actual work you do more than whats on your contract.

[Cowboy Bob]

Who is liable if IR succeeds in proving that one or more contracts were inside IR35?

Is it the Ltd company
OR
Is it the owner(s) personally?
OR
Both?

The employee - IR35 is a personal tax.

[VectraMan]

If it is the Ltd company and the company does not have the funds to pay IR what happens then? Do they go after the personal assets of the director

Not having enough money in the company to pay taxes is one of the things that gets you into trouble as a director, and makes you personally liable for the debts of the company. So I guess that applies. You can't hide behind limited liability, otherwise you could go bust and start another company and get out of it.