Reply to: Is there any reason to ever declare being inside IR35?

[Sally BFCA]

Even if you are sure a contract is inside IR35, is there any reason why you shouldn't act like it is not, and put the extra money aside in a long-term high-interest account?

If you get investigated and they rule a contract was IR35, what happens? Do they
a)just ask you for the unpaid tax
b)also add interest
c)add big penalties

Under HMRC 'taking reasonable care' penalties introduced last year, they can fine you up to 200% of the unpaid taxes so you could end up paying threefold.

[escapeUK]

Not according to when I was deciding which PCG membership to get. A IR35-friendly contract may still be screwed by working conditions, but an IR35-unfriendly contract is unlikely to be saved by good conditions. I'd guess they look at contract, and then working conditions to check the contract is valid.

Its tax, its unfair, they will get you anyway they think they can with the flimsiest of pretences.

Id like to think the Torys will change things as they are the sort of party who would help small business / workers like us. But, I am aware that the public finances are much much worse than anyone would admit, so they are going to have to take some pretty harsh measures.

[d000hg]

I don't believe that to be the case - especially since written contract is ultimately irrelevant in terms of whether the situation is IR35 caught or not.

I'm sure that eventually Malvolio will tell us if that's true or not.

Not according to when I was deciding which PCG membership to get. A IR35-friendly contract may still be screwed by working conditions, but an IR35-unfriendly contract is unlikely to be saved by good conditions. I'd guess they look at contract, and then working conditions to check the contract is valid.

[MarillionFan]

Isnt the best method, to make sure you are outside, and take out either PCG membership or Xdos insurance.

Then whatever happens you save then £20k a year tax and whatever happens you will be fine.

EUK. I assume you mean to say 'to assume you are outside and take out insurance, either way you should be fine'

I don't have insurance for that reason. But if that is what the insurance covers you for then 'Nail Head' IMO.

[The Wikir Man]

You don't always/normally have free reign to write your own contract. PCG I think will only cover contracts they reckon have a chance.

I don't believe that to be the case - especially since written contract is ultimately irrelevant in terms of whether the situation is IR35 caught or not.

I'm sure that eventually Malvolio will tell us if that's true or not.

[d000hg]

Isnt the best method, to make sure you are outside, and take out either PCG membership or Xdos insurance.

You don't always/normally have free reign to write your own contract. PCG I think will only cover contracts they reckon have a chance.

[escapeUK]

So based on those probabilities (which i believe to be about a 1 in 7, ie. once in seven) years, then it would be more beneficial to call all contracts Outside, and (feign dumb ignorance and then show that you 'worked out you were outside' using whatever method) just cough up a fine if you ever got caught.

Isnt the best method, to make sure you are outside, and take out either PCG membership or Xdos insurance.

Then whatever happens you save then £20k a year tax and whatever happens you will be fine.

[Bexter]

I'm confused. So are you saying that people generally do not have contracts reviewed to check and just say your outside on the offchance you don't get caught?

And if you do have a review and it says you are inside, surely then that means you have no option but to declare it inside? (unless the contract gets changed?)

[Weltchy]

Since the only 100% way to know your Inside IR35 is to have been through a case and seen it all the way through to the House of Lords and had your case rejected, does that mean that until that point in time, you cannot be certain to be Inside IR35. This being the case, is it not reasonable that you should therefore always treat yourself as outside?

[northernladuk]

Fair point.

I think someone has hacked MF's account

[NotAllThere]

Fair point.

[MarillionFan]

Fortunately the courts don't use the MF definition of being a disguised employee, they use the employment law definitions, so lack of moo, substitution etc. are taken into account, and only ever having one client etc. are not (or at worst, are weak indicators).

If you know you are inside IR35, and claim you are not, that is tax evasion. The trick is to know that you're not, and have evidence to demonstrate that your understanding that you were out is reasonable, even if wrong. That way, you'll only have to pay the tax owing + interest.

No of course. But, the reason for the poll in general is. I believe that the probability of having an HMRC audit and challenging a contract that you have called Outside(when it is inside) is low, very low.

So based on those probabilities (which i believe to be about a 1 in 7, ie. once in seven) years, then it would be more beneficial to call all contracts Outside, and (feign dumb ignorance and then show that you 'worked out you were outside' using whatever method) just cough up a fine if you ever got caught.

[NotAllThere]

...In my eyes, 90% of contractors on the board are disguised employees. ...

Fortunately the courts don't use the MF definition of being a disguised employee, they use the employment law definitions, so lack of moo, substitution etc. are taken into account, and only ever having one client etc. are not (or at worst, are weak indicators).

If you know you are inside IR35, and claim you are not, that is tax evasion. The trick is to know that you're not, and have evidence to demonstrate that your understanding that you were out is reasonable, even if wrong. That way, you'll only have to pay the tax owing + interest.

[northernladuk]

Really?

Or could you just choose to treat it as if it was outside and do it anyway?

WHS.

Someone asked about cases. Didn't Dragonfly lose their case? There is a page on the HMRC website with list of them. Even a dancer that said he was contract but he had to be there on time to practice so he lost his case and was deemed employee so its not just IT people.

[d000hg]

Funny how some people on here have been on the bench for up to a year and here you are swanning about picking and choosing your contracts as you please.

Maybe he's good.