My contract has just failed the IR35 test

[dx4100]

I imagine you paid for the review as you wanted a independent assessment on your IR35 status. You failed that review. You now either operate as IR35 caught, change the wording of the contract and re-review, or operate outside of IR35 regardless (which makes me think why did you waste your money on a review if you was just going to ignore the outcome).

Your chances of a investigation are as likely as any of us. This won't change a thing.

[malvolio]

Reality that matters? Really?

So if a contract is IR35 unfriendly HMRC will say "Oh, it seems from the contract that you are caught but in the interests of fairness we won't make a decision until we have checked further"

Oink, oink, flap, flap.

Why would Hector even see your contract? Nobody (at least, nobody sane) is going to send him a copy, are they?

Anyway you don't get investigated for IR35. You get investigated for apparent irregularities or inconsistencies in your personal tax returns or corporate paperwork including (reputedly) VAT returns. The move to IR35 investigations starts from there. So keep your paperwork straight and your payment schedule fairly even and you reduce the risks: Hector also runs some random inquirires each week but there are 4.5 million freelance workers out there...

That's why PCG insurance against IR35 kicks in fairly late in the process and why PCG Plus covers all aspect inquiries. The thinking is that by managing the original inquiry professionally you never get to a potetnial IR35 case.

As with everything it's a risk assessment.

[worzelGummidge]

ssh!
Don't tell anyone.
The tossers will be out soon.

[xoggoth]

Reality that matters? Really?

So if a contract is IR35 unfriendly HMRC will say "Oh, it seems from the contract that you are caught but in the interests of fairness we won't make a decision until we have checked further"

Oink, oink, flap, flap.

[BolshieBastard]

Here we go again.

For the record only a Special Tax Commissioner can declare you as caught by IR35 and must pay up. (you can appeal any decision by HMRC if they say you are caught.)

The contract failing accountTax IR35 test does not mean you are more likely to be investigated either. So stop worrying.

If you can get your contract T&C's more IR35 'friendly' then do this asap and certainly at renewal.

If your contract is only for 13 weeks, even if you did have to pay up, it wouldnt be that big a hit.

Carry on.

[NotAllThere]

Rubbish, I'm afraid. You can't retain earnings from a contract subject to IR35...

Of course, when it's so far in the past that it's off limits, then you've no worries.

[original PM]

not really a problem.

Excepot for the fact you have to make the most of any revenue as tax n expenses - you will not be able to take as dividends.

However here is a question for the board.

Lets say I have a contract which is caught by IR35 - but rather than paying all of the money out to me I take a small salary and leave the money in the company for say 5 years - (ok you pay corp tax on it) but then say after 5 years you have done a number of other non IR35 caught contracts can you then assume that the money in the account can no longer be tied to that particular contract and thus can be taken as dividends.

Or am I talking rubbish?

[singhr]

I think you are are a bit b*ggered there although as you will know from reading related posts on this forum, it's the actualité that Hector is interested in, not what the contract says.

[Olly]

Just had my contract reviewed by AccountTax and it's failed the IR35 test.

What happens now it's been rejected? does this mean am at risk of getting caught by the Inland Revenue?

I dare say you're at no more risk of investigation but if your contract doesn't pass "the test" then what on earth are your working conditions going to be like? Yes is the answer - but "caught" is the wrong turn of phrase

and if i do nobody would any lawyer be willing to take on my case with Inland Revenue?
Maybe, you'd have to ask them though wouldn't you

What options do i have to amend my contract to match what's been recomended?

How on earth do we know? Why don't you ask the agent?

and what can i do if the agency refuse to amend it?
Two 'real' options, either go PAYE or don't do the contract. Option 3 is do it and risk getting stung later. I'm guessing a surprising number of people would opt for 3 but your accountant is going to be pissed I think

P.S. You're not a troll are you?

[Jeebo72]

Ask the client to reword it. Have done this before, they are usually ok.

[beemarman]

Mod can you please move this to the right section please.

[beemarman]

Just had my contract reviewed by AccountTax and it's failed the IR35 test.

What happens now it's been rejected? does this mean am at risk of getting caught by the Inland Revenue? and if i do nobody would any lawyer be willing to take on my case with Inland Revenue?

What options do i have to amend my contract to match what's been recomended? and what can i do if the agency refuse to amend it?