Reply to: Going permie.. temporarily? Keeping company open?

[Old Greg]

Possibly but IMO the fact we don't know isn't enough reason to risk a huge amount of money in a situation he will clearly lose if it comes to it. How many of these cases get settled out of court so we don't see it for a start. Then just because we haven't seen it doesn't mean it won't happen in the future etc.

The OP is in a world of problems and his only mitigation is he might not get caught. Not great.

I do get what you are saying but giving clueless noobs a get out to continue to act poorly isn't the alway forward IMO.

Not getting caught is not a mitigation. Closing down the company is a mitigation.

in honesty, I would get the contract and working practices reviewed, close the company down and if possible get insurance personally. Then stop worrying about it.

[eek]

Possibly but IMO the fact we don't know isn't enough reason to risk a huge amount of money in a situation he will clearly lose if it comes to it. How many of these cases get settled out of court so we don't see it for a start. Then just because we haven't seen it doesn't mean it won't happen in the future etc.

The OP is in a world of problems and his only mitigation is he might not get caught. Not great.

I do get what you are saying but it plays the OPs situation down and and anyone else that's reading this and thinking ah illnget away with it so won't bother.

But equally we aren't in normal times where our advice would be go and get another contract and leave the client with a mess of their own creation because chances are the replacement contract doesn't exist.

[northernladuk]

Possibly but IMO the fact we don't know isn't enough reason to risk a huge amount of money in a situation he will clearly lose if it comes to it. How many of these cases get settled out of court so we don't see it for a start. Then just because we haven't seen it doesn't mean it won't happen in the future etc.

The OP is in a world of problems and his only mitigation is he might not get caught. Not great.

I do get what you are saying but giving clueless noobs a get out to continue to act poorly isn't the alway forward IMO.

[eek]

I do find it rather surprising we give so much advice on IR35 and then occassionaly a thread like this comes along where the OP ticks all the boxes clearly in a high risk situation and everyone is like ah you'll be fine, you might not get caught.

Surely we should be telling the OP what is wrong with his position and let him decide if he wants to risk hundreds of thousands of pounds by playing dumb.

There's a risk but my point was an explicit one relating to the information HMRC has to immediate hand..

question are we aware of any historic IR35 cases brought on by turning permanent, HMRC hate people going from PAYE to contract at the same place but I can't remember an IR35 case triggered by someone becoming a permanent member of staff.

Of course the OP could mitigate the risk by closing his limited company down as you are then into the higher thresholds of direct responsibility so keeping the company open does make the risk greater.

[northernladuk]

I do find it rather surprising we give so much advice on IR35 and then occassionaly a thread like this comes along where the OP ticks all the boxes clearly in a high risk situation and everyone is like ah you'll be fine, you might not get caught.

Surely we should be telling the OP what is wrong with his position and let him decide if he wants to risk hundreds of thousands of pounds by playing dumb.

[Lance]

What reporting? Agency reporting regulations don't ask who the end client is, merely who the worker was and where the money was paid to (unless it's an umbrella "via paye" in which case the agency does not need to report the umbrellas details).

Put it this way I would be far happier to take a permanent role with the client than continue through an umbrella via the same agency.

I thought the agencies did provide the end client.
So less risk than I had thought, but still easier pickings than going after individual PSCs.

But a completely new client/employer will always be the lowest possible risk.

[eek]

I think you’re missing the point.

When large numbers of people switch and stay at the same client it becomes easy pickings for HMRC. They no longer need to painstakingly investigate every case.
They have, through mandatory reporting, lists of people who have made the transition.

Tell me, how has lack of resources impacted HMRCs ability to chase the loan scheme tax evoiders?

What reporting? Agency reporting regulations don't ask who the end client is, merely who the worker was and where the money was paid to (unless it's an umbrella "via paye" in which case the agency does not need to report the umbrellas details).

Put it this way I would be far happier to take a permanent role with the client than continue through an umbrella via the same agency.

[BigDataPro]

...
When large numbers of people switch and stay at the same client it becomes easy pickings for HMRC. They no longer need to painstakingly investigate every case.
...

^^This^^

[Lance]

I'm anti permietractor as anyone (well maybe not NLUK, who seems genuinely disturbed), but there is very little chance HMRC will come after you in this scenario.

A LOT of my ex-contractor colleagues at the big financial companies have made the switch from contractor to perm doing the exact same roles with the same titles, and many have closed their ltd companies down too.

With the IR35 reforms in the private sector there will be thousands of ex contractors in the same boat, what makes people think HMRC have the resources to go after everyone? If you've been there less than 2 years you'll be way down this imaginary "investigate" list, there were tons of these permietractors who had been at the same place for 5+ years and who gladly made the transition into permiedom because they had become an integral part of the operations who'd be in HMRCs cross-hairs first.

That being said, your situation is a bit messy. The risk is probably minimal, so you'd need to weigh it up.

I think you’re missing the point.

When large numbers of people switch and stay at the same client it becomes easy pickings for HMRC. They no longer need to painstakingly investigate every case.
They have, through mandatory reporting, lists of people who have made the transition.

Tell me, how has lack of resources impacted HMRCs ability to chase the loan scheme tax evoiders?

[ensignia]

I'm anti permietractor as anyone (well maybe not NLUK, who seems genuinely disturbed), but there is very little chance HMRC will come after you in this scenario.

A LOT of my ex-contractor colleagues at the big financial companies have made the switch from contractor to perm doing the exact same roles with the same titles, and many have closed their ltd companies down too.

With the IR35 reforms in the private sector there will be thousands of ex contractors in the same boat, what makes people think HMRC have the resources to go after everyone? If you've been there less than 2 years you'll be way down this imaginary "investigate" list, there were tons of these permietractors who had been at the same place for 5+ years and who gladly made the transition into permiedom because they had become an integral part of the operations who'd be in HMRCs cross-hairs first.

That being said, your situation is a bit messy. The risk is probably minimal, so you'd need to weigh it up.

[Old Greg]

Probably quite small, but you never know. Although a little old now, this is still my go-to reference on the topic:

IR35 and Personal Liability - can HMRC proceed against an individual? - Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists

But, you're right, it is a fairly high bar and it would probably be quite difficult to transfer the liability to the OP personally. Personally, I wouldn't want to take that risk as this would be a pretty solid case for "inside all along and should have known better", especially after this forum post...

How many people do you think have been personally on the hook in the last 10 years?

[jamesbrown]

But if the OP then closes the Ltd, what are the real world probabilities of personally being on the hook for IR35 related taxes, interest and penalties?

Probably quite small, but you never know. Although a little old now, this is still my go-to reference on the topic:

IR35 and Personal Liability - can HMRC proceed against an individual? - Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists

But, you're right, it is a fairly high bar and it would probably be quite difficult to transfer the liability to the OP personally. Personally, I wouldn't want to take that risk as this would be a pretty solid case for "inside all along and should have known better", especially after this forum post...

[Old Greg]

No amount of IR35 insurance is going to help the OP with that one. The moment you accept a permie role without a fundamental change in working practices, there is no reasonable prospect of success (something that all insurers will demand). Inside all along.

But if the OP then closes the Ltd, what are the real world probabilities of personally being on the hook for IR35 related taxes, interest and penalties?

[northernladuk]

No amount of IR35 insurance is going to help the OP with that one. The moment you accept a permie role without a fundamental change in working practices, there is no reasonable prospect of success (something that all insurers will demand). Inside all along.

Actually that's true.. the fact he's pretending the perm role is a contract, which he's been doing all along says it all. Yes... What Jamesbrown says.

There you go, your decision is made. Easy.

[jamesbrown]

If you do take the job I seriously hope you've got IR35 insurance because that's the only thing keeping you safe in your situation I am afraid.

No amount of IR35 insurance is going to help the OP with that one. The moment you accept a permie role without a fundamental change in working practices, there is no reasonable prospect of success (something that all insurers will demand). Inside all along.