Closure Notice for Compliance Check!

[cojak]

Well thanks for letting us know your outcome.

[jaffajeo]

Well its all sorted, there was nothing to pay and no further investigation. HMRC commended me for being friendly and courteous and for providing information immediately upon request - which I did with additional covering info.

Everyones experience is different of course and im not party to the unique circumstances that may have made my favourable outcome occur but regardless of that im thankful for the tips.

[jaffajeo]

Why are you still asking opinions of random strangers on a public board when the majority have already said get specialist advice?. You clearly have a complex situation with some quite serious ramifications if you get it wrong. unless you are just looking for some to give you the answer you want to hear......

Random strangers have given me some useful pointers and made me aware of services such as those offered by PCG so I don't consider it fruitless, but of course nothing compares to specialist advice. But if your a small bit player and the amounts aren't huge (and neither am i rich!) its been a quandery figuring the kind of specialist advisor I should seek for my situation, esp. for a small fry like me! For example a specialist tax advisor with experiences of these types of checks/ investigations? If you have any to recommend from experience id appreciate it.

[northernladuk]

Why are you still asking opinions of random strangers on a public board when the majority have already said get specialist advice?. You clearly have a complex situation with some quite serious ramifications if you get it wrong. unless you are just looking for some to give you the answer you want to hear......

[jaffajeo]

You can't be SE (i.e. subject to Schedule D NICs) and a Company Owner. If you think you are, that may be part of the problem; you need to be clear about which before any advice is relevant.

As regards the PCG, phone them up on Monday and ask them; they are quite approachable...

Jeez... really? I thought you could be self employed and an employee though? Let me tell you my circumstances a bit and let me know what you think.

I registered self employed for the purpose of developing projects in my own name, and for doing odd jobs. I registered a company (with my family) and serve as a director utilising it for my bigger projects (for jobs requiring an LTD.)

All of my income stemmed from me invoicing my company as an individual to both the odd job clients, and to my own company (for time and expenses) relating to the projects I would do. These are ad hoc short term projects. So while the work i did for my company brought most of my income (it didnt necessarily take most of my working time - ie. that would be on me attempting to make my own projects outwith the company.)

In my SA I reported all the income I derived (from straight up invoices) minus my expenses - i didnt recieve money from the company in any other way etc. What I didn't do was tick on my SA that i was a company director (which I learned I should have) and should have placed part of my income (that they saw as being from me working as an employee in the SA wages box.)

Other than that though, the income still added up to be the same in my SA. Though I imagine maybe they would if they classed the bigger proportion of my income as 'wages' seek to reduce the expenses i claimed as a SE person doing the projects for my own company.

To reiterate the kind of full turnovers we're talking about are just about the 10 - 11k march for the last few years. Ie. weighing in whether an easier settlement is possible with hmrc is they intend to prolongue investigation or whether fancier rep is required.

Definately going to enquire about PCG come Monday! What do you reckon sir? I really appreciate your opinions on this.

[malvolio]

Oh bugger!

Okay well first of all thanks for the advice... scary stuff eh. If i can just tell you a little bit more about my circumstances (to see if you would advise differently.) Ive only been registered SE for a few years, and my turnovers have typically been modest (ie. 10k minus about a third in expenses.) I never paid myself any dividends or anything like that, was all just put under my SA.

Is it worth seeking specialised tax advice or representation for that, im not sure if my accountant is too clued up on IR35?

Regarding PGC im obviously in the midst of a compliance but no mention has been made to me about IR35 from hmrc. What should I say about my situation to them when requesting if i can get coverage at this point?

All and all thanks for the advice and i will keep you guys updated, especially if my experience can help others.

You can't be SE (i.e. subject to Schedule D NICs) and a Company Owner. If you think you are, that may be part of the problem; you need to be clear about which before any advice is relevant.

As regards the PCG, phone them up on Monday and ask them; they are quite approachable...

[jaffajeo]

Oh bugger!

Okay well first of all thanks for the advice... scary stuff eh. If i can just tell you a little bit more about my circumstances (to see if you would advise differently.) Ive only been registered SE for a few years, and my turnovers have typically been modest (ie. 10k minus about a third in expenses.) I never paid myself any dividends or anything like that, was all just put under my SA.

Is it worth seeking specialised tax advice or representation for that, im not sure if my accountant is too clued up on IR35?

Regarding PGC im obviously in the midst of a compliance but no mention has been made to me about IR35 from hmrc. What should I say about my situation to them when requesting if i can get coverage at this point?

All and all thanks for the advice and i will keep you guys updated, especially if my experience can help others.

[Wanderer]

You might be fine or it might end up in a long drawn out saga, it's your call as to what to do but I agree with cojak:

Flipping heck - I wouldn't have even replied to the first letter, just forwarded it onto my accountant/PCG advised specialist.

An advisor will find out what the scope of their inquiry is and get their questions in writing so you can consider your answers carefully to bring the enquiry to a close rather than leading HMRC on a fishing expedition into your tax affairs.

Anything you say may be taken down and used against you in evidence

A slip of the tongue or a misuse of your terminology can cause a lot of difficulty.

[cojak]

Flipping heck - I wouldn't have even replied to the first letter, just forwarded it onto my accountant/PCG advised specialist.

Get proper advice immediately (although that might be too late now).

[malvolio]

I have an accountant Wanderer but are you reading a vibe that i should be searching for more specialised tax advice?

You are looking at the start of an IR35 investigation. On average, that's 3-4 years of worry, £15k in legal fees and a tax bill for the last six years. Most of the cases that have been lost were where the contractor tried a DIY job, and I hate to say it but you may already be compromised.

If you're in the PCG, get a claim in. If you aren't, now you know why you should be. Call them on Monday and ask for some real advice; you may still be able to join and be covered (but I don't guarantee that) if HMRC haven't yet mentioned IR35. Or get hold of one of the specialists (B&C, QDOS, Abbey Tax) and get a quote for professional legal help. Now.

It may all blow over, of course. But I wouldn't bet the house on it (literally...). Good luck and keep us posted.

[jaffajeo]

I have an accountant Wanderer but are you reading a vibe that i should be searching for more specialised tax advice?

[Wanderer]

I actually got an email updating my case with more questions - I was wondering if these are reasonable questions?

Seriously, get some proper advice straight away because you could be looking at a very big tax bill if you mess this up.

[jaffajeo]

Funnily enough Nathan, I actually got an email updating my case with more questions - I was wondering if these are reasonable questions?

They basically ask (in relation to a list of short term self employed commissions I did which they had requested, really to challenge whether i was sufficiently self employed as well as the work i did for my own company) whether specific indviduals x or y worked with me?

Given the check was supposed to be in relation to me and my accounts (for the limited company and the self assessment) im surprised why there asking whether these individuals worked with me on particular jobs and (are requesting information on such jobs during or outwith the period of investigation.)

Such individuals arent even company directors/employees nuuuthing

[Nathan SJD Accountancy]

Hello there chaps I was just wondering if there was any approximate period hmrc usually provide closure notices for compliance checks (mines was related to this thread below) it involved my SA and my limited company (during the meeting they seemed to be fine with the figures and a wincy bit iffy on the employment status.)

http://forums.contractoruk.com/accou...r35-issue.html

Its been 3 weeks now and I haven't recieved a letter yet? So just wondering what other folks experiences have been like?

Hi. The length of time for them to complete their checks does tend to vary. Did they not tell you at that point in time, how long it would take for them to back to you?

My advice, forget about it and put it to the back of your mind. Especially, if in your opinion the compliance check was not a disaster.

[jaffajeo]

Hello there chaps I was just wondering if there was any approximate period hmrc usually provide closure notices for compliance checks (mines was related to this thread below) it involved my SA and my limited company (during the meeting they seemed to be fine with the figures and a wincy bit iffy on the employment status.)

http://forums.contractoruk.com/accou...r35-issue.html

Its been 3 weeks now and I haven't recieved a letter yet? So just wondering what other folks experiences have been like?