Reply to: IR35, what if....

[Pondlife]

No, it wasn't tongue in cheek

Investigated for 4 years, QDOS defended me as I had IR35 insurance with them, found guilty and ordered to pay £52k, QDOS wouldn't take it to commisioners unless I paid £7k, was a member of PCG so contacted them, they told me what to tell QDOS to tell HMRC, HMRC eventually dropped the case when prodded as we hadn't heard from them for 6 months.

**** YES!

[Batcher]

Hey Batcher what happened then? Investigated, PCG defended but IR35 caught and still liable? Was the comment about the PCG membership tongue in cheek?

No, it wasn't tongue in cheek

Investigated for 4 years, QDOS defended me as I had IR35 insurance with them, found guilty and ordered to pay £52k, QDOS wouldn't take it to commisioners unless I paid £7k, was a member of PCG so contacted them, they told me what to tell QDOS to tell HMRC, HMRC eventually dropped the case when prodded as we hadn't heard from them for 6 months.

[Ruprect]

Just checked the payment slips. I didn't get any penalties so had PAYE, Class 1 NICS & Interest payments but I had 4 payment slips, one for each year they deemed me inside.

The membership fee for PCG was the best money I ever spent

Hey Batcher what happened then? Investigated, PCG defended but IR35 caught and still liable? Was the comment about the PCG membership tongue in cheek?

[Project Monkey]

Hi, theoritical situation:

I'm trading as a ltd company for 10 years and I get investigated and found to be "caught" by IR35.

I am taken to court and told to pay a huge tax bill, interest, and a penalty.

There is no chance of me being able to pay this. Next comes insolvency? So they would cease any monies and/or assets the company has and close it down. My house and personal finances would be ok though? No ones going to prison because they can't pay or anything. Am I right in assuming this ?

Thanks.

No need for all this! You're a contractor, so just pay the bill and move on.

[Contreras]

IR35 is personal taxation, so you are liable.

If you want your company to be liable for the tax just keep money there.

Someone did point out rightly that there is nothing to stop you keeping the money in the company, of course you pay corporation tax and then taking it out later.

Sorry but that is completely AAF.

IR35 is a company liability (even though it's calculated on the tax the individual would have paid).

If anything it's a reason not to keep the warchest in the company, glistening under the greedy gaze of Hector.

Dissolve the company and any liability cannot be pursued (fraud/negligence being notable exceptions to this). You need HMRC approval to do that of course.

[suityou01]

Then he should have asked this question in the Accounting/Legal professional forum, where a certain restraint is encouraged.

Mods can't be expected to be around to move every post into the right forum.

Weren't you this grouchy last month?

[Batcher]

This URL explains the penalties - looks like the 100% ones are the worst case scenario.

Just checked the payment slips. I didn't get any penalties so had PAYE, Class 1 NICS & Interest payments but I had 4 payment slips, one for each year they deemed me inside.

The membership fee for PCG was the best money I ever spent

[Zero Liability]

This URL explains the penalties - looks like the 100% ones are the worst case scenario.

[mudskipper]

Caunce O'Hara seem to be offering me something?
I've not looked into it as they emailed me a few days after I'd renewed IPSE.

I looked at that - it was a lot cheaper, but there was no real detail about the offering on their website.

In the end I renewed ipse - someone mentioned being represented by "people who know what they're doing" and I'm happy that, if push comes to shove, I'll get that from ipse.

[TheFaQQer]

I think the OP is asking because he doesn't have the level of experience as some on this board. I must admit there seems to be a slight disdain to newbies asking questions on this board, we all started somewhere

Since he has been a member of CUK for two years, one would expect that even by the process of osmosis some kind of knowledge of IR35 would be there by now.

Even more so if the OP has been trading for ten years.

There is a level of disdain for any poster who cannot be bothered to do their own research as a starting point. There are plenty of guides out there that explain IR35 so at least read one if you are going to run your own business.

[cojak]

I think the OP is asking because he doesn't have the level of experience as some on this board. I must admit there seems to be a slight disdain to newbies asking questions on this board, we all started somewhere

Then he should have asked this question in the Accounting/Legal professional forum, where a certain restraint is encouraged.

Mods can't be expected to be around to move every post into the right forum.

[RoastedSlopes]

Sheesh.

Have you been in the same contract for 10 years?

My theoretical reply. Go away, read up on and make sure you understand what IR35 is all about. because you obviously don't understand it at the moment.

I think the OP is asking because he doesn't have the level of experience as some on this board. I must admit there seems to be a slight disdain to newbies asking questions on this board, we all started somewhere

[cojak]

Hi, theoritical situation:

I'm trading as a ltd company for 10 years and I get investigated and found to be "caught" by IR35.

I am taken to court and told to pay a huge tax bill, interest, and a penalty.

There is no chance of me being able to pay this. Next comes insolvency? So they would cease any monies and/or assets the company has and close it down. My house and personal finances would be ok though? No ones going to prison because they can't pay or anything. Am I right in assuming this ?

Thanks.

Sheesh.

Have you been in the same contract for 10 years?

My theoretical reply. Go away, read up on and make sure you understand what IR35 is all about. because you obviously don't understand it at the moment.

[VectraMan]

I guess my point is why would they start an IR35 investigation to try and find out if you had underpaid your personal tax (by doing small salary, divvies and so forth) if you haven't actually paid out to yourself personally yet.

It's a ridiculous edge case scenario I suppose.

Nobody knows for sure why they start an IR35 investigation. If they had reason to believe you're a PSC, and you posted profits but paid no salary, that could be a red flag.

It's not just dividends; you can also avoid tax by paying yourself less in year one in anticipation of having a lean year two. If IR35 caught you'd have to pay all your tax in year one, just like an employee would, in other words not acting as a business. In a way that's the part of it that is unfair: you can't build up a war chest in the business as insurance against your variable income, like a business would, as you're going to be hit by 40% tax in the first year.

[Lightwave]

Interesting discussion.

Talking about IR35 insurance, is there any adequate alternative to IPSE (formerly known as PCG) ?

My insurance is up for renewal and, following the PSC saga, I'm disillusioned with IPSE

Caunce O'Hara seem to be offering me something?
I've not looked into it as they emailed me a few days after I'd renewed IPSE.