Contract ending before April 6th and IR35

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jamesbrown replied

21 March 2021, 17:34
Originally posted by djones123 View Post

I have a quick question on a contract done through a Ltd company and ending before April 6th.

- Can HMRC review contracts ended before April 6th? I have been told that most likely HMRC won't look at contracts ended before April 6th, but i don't know how much is that true.

It is completely false. You are confusing two things. They've said that they will not automatically investigate earlier contracts on the basis of information received after April 5 (e.g., an SDS), unless there is evidence of fraud. However, they are not stopping IR35 enforcement. So, certainly, you could be investigated for work completed before April 6.

Originally posted by djones123 View Post

- Contract was done through a Ltd company, What will be the implications if the contract gets an extension and treated as inside IR35 (PAYE), would the old contract automatically be classed as inside IR35?

Thanks

The main implication will be that you were inside IR35 all along, absent a clear and documented change in working practices. The other implication is that you may get caught and find YourCo liable for any taxes, penalties and interest due.
Leave a comment:
djones123 replied

21 March 2021, 17:28
Originally posted by Lance View Post

Doesn't sound true. They can go back 6 years, or further if they suspect fraud. April 6th has no bearing on what HMRC can investigate.
I think you are misunderstanding something, or been told an untruth.

It can't be extended to inside IR35. It will be a new contract.
The old contract could, under scrutiny be considered as inside based on the client determining that you are inside now. HMRC may well interpret that as evidence of always having been inside.
Isn't it a bit late to researching this?
There's absolutely loads of threads about all manner of related items. You should do some reading ASAP.
Especially as it has been uncovered that you could be determined outside after April 6th, and then client change their mind some time later.

I have also been thinking about closing my ltd company after paying 40% tax and other dues as i don't see any benefit of leaving it open.

My current contract is with the healthcare company who is waiting on gov to sign their contract.

I will try to negotiate my new contract terms with the client to make it IR35 compliance otherwise it is not worth continuing.
Leave a comment:
cojak replied

21 March 2021, 16:28
Yeah, no-one here believes that old chestnut...

1,500 GlaxoSmithKline contractors hit by HMRC’s new IR35 letters (contractoruk.com)
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Lance replied

21 March 2021, 16:15
Originally posted by djones123 View Post

I have a quick question on a contract done through a Ltd company and ending before April 6th.

- Can HMRC review contracts ended before April 6th? I have been told that most likely HMRC won't look at contracts ended before April 6th, but i don't know how much is that true.

Doesn't sound true. They can go back 6 years, or further if they suspect fraud. April 6th has no bearing on what HMRC can investigate.
I think you are misunderstanding something, or been told an untruth.

Originally posted by djones123 View Post

- Contract was done through a Ltd company, What will be the implications if the contract gets an extension and treated as inside IR35 (PAYE), would the old contract automatically be classed as inside IR35?

It can't be extended to inside IR35. It will be a new contract.
The old contract could, under scrutiny be considered as inside based on the client determining that you are inside now. HMRC may well interpret that as evidence of always having been inside.
Isn't it a bit late to researching this?
There's absolutely loads of threads about all manner of related items. You should do some reading ASAP.
Especially as it has been uncovered that you could be determined outside after April 6th, and then client change their mind some time later.
Leave a comment:
djones123 started a topic Contract ending before April 6th and IR35

21 March 2021, 15:47
Contract ending before April 6th and IR35

I have a quick question on a contract done through a Ltd company and ending before April 6th.

- Can HMRC review contracts ended before April 6th? I have been told that most likely HMRC won't look at contracts ended before April 6th, but i don't know how much is that true.

- Contract was done through a Ltd company, What will be the implications if the contract gets an extension and treated as inside IR35 (PAYE), would the old contract automatically be classed as inside IR35?

Thanks
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