Reply to: Help Required: IR35 neglected

[Fred Bloggs]

But, by now, the OP will have burnt the first opinion and he will have foergotten it ever existed. How would HMRC ever get to know if you didn't tell them?

[ASB]

One thing maybe you should consider is Regulation 72 , even if the company is closed and you willfully knew the contract was Inside ir35 HMRC can, have recourse to you personally, and there is no time limit.

The point is "willfully knew" which comes into the same discussion as "reasonable care" according to HMRC's view of you as a taxpayer. ( Reasonable Care definition is important for new regime of penalties and interest )

Those pesky transfer of obligations rules. They are completely unreasonable, because it's just yet another thing that removes obligation from HMRC and places it back on the taxpayer; specifically designed to remove any idea of certainty. Even trying to take due diligence from a taxpayer point of view make this more difficult. Opinions on any transaction will, of course, always differ.

Of course, in the case of the OP he/she has a significant problem. They got an initial review saying "in" and two further reviews saying "out". If I were HMIT and had picked up this case I know what I'd be saying. It wouldn't likely be "well that's OK, they obviously did their best".

[LisaContractorUmbrella]

When you sought professional opinion were you asked about your working practises or was the opinion based on just reading the contract? A contract can be written to be outside IR35 but if your working practises are not accurately reflected within that contract it would have no value in the event of an investigation.

[djhns]

Well... i dont' know for sure as i'm not an expert.

I have relied on what i've been told. And based on 2 contract reviewers, they are saying it's outside IR35.

Therefore, i believe i have done everything to the best of my knowledge and from professional advice.

[Fred Bloggs]

Interesting post Phil.

[PhilAtBFCA]

Regulation 72

djhns

Just had the opportunity to read the whole of this thread and its a great story really when read end - end. Thanks :-)

One thing maybe you should consider is Regulation 72 , even if the company is closed and you willfully knew the contract was Inside ir35 HMRC can, have recourse to you personally, and there is no time limit.

The point is "willfully knew" which comes into the same discussion as "reasonable care" according to HMRC's view of you as a taxpayer. ( Reasonable Care definition is important for new regime of penalties and interest )

Can you rely on these opinions ? Did you seek opinions until you got the "right" one ? I would recommend in this case that your IR35 opinion is separate from the accountancy firm taking on the closure of the company, I do not normally think this in most trading cases but in your case I think you would be better off doing that, especially as the opinion is dated way after the tax is due.

This is not meant to be a FUD or scary post BTW, just trying to stick to facts.

Phil

[malvolio]

Much as I hate to say "We told you so", but http://forums.contractoruk.com/869253-post14.html et seq...

[djhns]

Well well.... how the tides have turned.

I've had two other companies review my contract and they are both saying that it is outside IR35.

So now, i will just continue as usual and proceed with winding the company up.

Much thanks everyone for all your assistance.

[djhns]

Fred Bloggs obviously has comprehension problems.

I have decided to take the ethical route if you get the jist.

"Guys, any suggestions??" Is referring to Accounting firms which can assist with all the amendments.

God forbid you ever get investigated on your affairs..... who knows what skeletons could be found!

[Fred Bloggs]

Any recommendations guys? much thanks.

You're either really dim or a Troll, I can't decide. I gave you a sensible way out of this a good few posts back. It's upto you now, nobody else can do this for you.

[djhns]

I'm getting really stressed.

I have contacted a few organisations but none of them are willing to take on my case. That is help me adjust my accounts.

Any recommendations guys? much thanks.

[malvolio]

Actually if we could ever nail a clean definition of "Control" a lot of the contractual grief surrounding freelancers would go away. All the employment laws are based around control, and all the tax laws are based around employment status. And "Control" itself is largely derived from the 19th Century concept of Master/Servant where the employed servant was legally obliged to do what his master told him, unlike a hired tradesman engaged by the Master who wasn't.

Where it goes wrong is that the two are not aligned; if they were there would be no such thing as "deemed employment", nor would S44-7 (S143c as was) be needed to allocate responsibility for unpaid taxes.

Sadly that all seems a step to far for the various interested parties.

[GreenerGrass]

Does your client dictate exactly what work you do, and how you do it? Or is there a list of jobs that need to be completed, and you pick up the jobs you want to to and get on with them by yourself.

I've always thought that is a ridiculous test of whether someone is an employee or not, excepting perhaps the "and how you do it" bit.
Think about it in terms of clients explaining what they want doing with contractors/self employed in any other industry e.g. construction, architecture etc.
A project manager giving detailed instructions to contractors/self employed tradesmen building a house does not make them employees.
You can't have a tiler saying "I'll stick the tiles up but I don't fancy doing the grouting, someone else can do it".
Or think of the sometimes extensive input a client has on a house design with an architect, that doesn't mean the architect is their employee.

[malvolio]

Loving your subtlety.

Horses for courses. Both you and they (and various others) provide insurance cover, if that's all you want. Doesn't mean they are directly comparable, that's all.

[Sausage Surprise]

Thanks ASB

I am not currently being reviewed by HMRC for starters.

So basically i have two routes to choose:

1) If the reviewer comes back that i am most likely outside IR35 + i can get a client's statement regarding the role and project in question also to back that it falls outside IR35, then i will leave things as is and carry on as usual. Otherwise;

2) I will just come clean and declare to HMRC that i have made an honest mistake and i would like to correct all my accounts including the associated fines, penalties and interest charges.

Another point i would like to make is that my contract work ceased in Apr08 since i have picked up a permie job so i have been considering winding up this Ltd company as it is no longer use to me.

In future, if i do pick up any contract work, i will make sure terms are stated in the contract or better just get an accoutant to do all my work.

This is a wind up isn't it?