Reply to: HMRC - 9/10 contractors are cheating and we know because of SA returns

[Wibblewibble]

So HMRC don't have to prove anything? They can simply state it and we have to accept it as fact because they are HMRC?

That is exactly how it works. HMRC's assessment of your tax status is taken to be correct unless you can sucessfully appeal at a tribunal. In other words, you have to demonstrate that HMRC are incorrect - the burden of proof is reversed, and the taxpayer has to be in a position to provide factual evidence. This is why it is especially important to generate and keep all documentation related to IR35 status, especially comments from the client.

[SueEllen]

^^ this.

Do you honestly believe that HMRC would go onto live TV and reveal how they work this stuff out? They had a meeting before going in and agreed with each other to act dumb and if the Lords ask for proof, slip it to them later.

Unfortunately for HMRC the Lords aren't MPs. They are appointed because they are an expert in their field.

HMRC can slip their evidence later to not have a bigger hole ripped into them on TV but that evidence will still be torn apart.

[Jolie]

That's how they operate. Dubious facts and statements. They don't seem to be held accountable to anyone at the moment.

They can open an enquiry and leave it open for years without taking it any further. The onus (not to mention the time, money and stress) will be on you to prove that they are wrong at some point when they finally get around to addressing your case.

^^ this.

Do you honestly believe that HMRC would go onto live TV and reveal how they work this stuff out? They had a meeting before going in and agreed with each other to act dumb and if the Lords ask for proof, slip it to them later.

[AtW]

PSC box, that's how they know it.

[Jolie]

The lady from HMRC who is in charge of IR35 implementation said that the evidence that 9/10 PSC's were paying the incorrect tax was from analysis they did on self assesment, she basically admitted that they plucked the number from thin air, didn't have any actual evidence and promised to forward a note showing how they came to that decision - this is critical because if they have their numbers wrong it won't net the treasure what they think it will.

We know this is how HMRC works. They just see a trend of people in a similar bracket, doing the same things with a similar outcome. Of course it won't result in the tax income that they expect, because they are blinkered to the other aspects, all they can see is that the majority don't pay any NI, including ErNI.

It's very easy to pick up on the SA. How do you pay yourself? Minimum salary to avoid NI and then dividends. That is where the 90% comes from, it doesn't have to be scientific, or even perfect.

Most people don't need to do a SA, because they are on PAYE and have no other income or investments. That is their starter for 10.

[escapeUK]

Thank you for the video. Its fascinating. The Lords asking very relevant questions, and seeing to the heart of the matter, and the HMRC representatives seeming shifty lying cheaters. Literally just how would you imagine them to be.

[Lost It]

Well I watched some of it. And it appears that the Committee very soon picked up on the fact that HMRC have based IR35 on assumptions. In fact one of them asked HMRC to provide written proof on one of the points, because if it was that clear the evidence should be plain...

I noticed that Cherys (sp) lady's "Urrrrghhh"'s got longer the more she struggled with giving a suitable answer.

Quite impressed when it was pointed out most people forced into brolly companies were going to lose about 30% net income. And can't do anything about it.

Methinks it hasn't finished yet. Thanks for the link...

[HMRCWOT]

I didn't follow the link sorry but I wonder if this is something to do with the decision we have pay ourselves under or over the threshold? There have been a few discussions over the years that we can pay ourselves the absolute minimum but other say pay a bit more so you do pay some tax on it to stay off the radar. Could it be she is looking at everyone paying themselves the absolute limit?

Or have I got this completely wrong and she is talking about the whole package, divis and all?

How companies distribute their profits is nothing to do with IR35 so it is all nonsense and HMRC are going to have to explain to the lords committee that it is all made up BS

[Old Greg]

Blood is boiling

CBeebies is a safe space, if you're easily triggered.

[HMRCWOT]

That's how they operate. Dubious facts and statements. They don't seem to be held accountable to anyone at the moment.

They can open an enquiry and leave it open for years without taking it any further. The onus (not to mention the time, money and stress) will be on you to prove that they are wrong at some point when they finally get around to addressing your case.

It was good watching HMRC squirm to the lords committee, hopefully they will help do more than delay it

[northernladuk]

I didn't follow the link sorry but I wonder if this is something to do with the decision we have pay ourselves under or over the threshold? There have been a few discussions over the years that we can pay ourselves the absolute minimum but other say pay a bit more so you do pay some tax on it to stay off the radar. Could it be she is looking at everyone paying themselves the absolute limit?

Or have I got this completely wrong and she is talking about the whole package, divis and all?

[NeedTheSunshine]

So HMRC don't have to prove anything? They can simply state it and we have to accept it as fact because they are HMRC?

That's how they operate. Dubious facts and statements. They don't seem to be held accountable to anyone at the moment.

They can open an enquiry and leave it open for years without taking it any further. The onus (not to mention the time, money and stress) will be on you to prove that they are wrong at some point when they finally get around to addressing your case.

[ShandyDrinker]

I'm surprised more people haven't picked up on the very point the OP made when starting this thread.

To infer from SA returns that 90% of contractors are paying incorrect tax is plain wrong, in particular when they don't know the ins and outs of each contract, working practices and so on.

I sincerely hope that those lobbying will raise this with their contacts in HMT/HMRC. It's yet another one I'll be raising with my MP.

[Lost It]

So HMRC don't have to prove anything? They can simply state it and we have to accept it as fact because they are HMRC?

[HMRCWOT]

You seem to be mixing two completely different things. Hector wants to suck you dry of all your hard earned cash. They can see you are a PSC from your SA. That's enough for them to open a case. Whether you are inside or outside doesn't matter at this stage, they still believe you are not paying enough tax.

The lady from HMRC who is in charge of IR35 implementation said that the evidence that 9/10 PSC's were paying the incorrect tax was from analysis they did on self assesment, she basically admitted that they plucked the number from thin air, didn't have any actual evidence and promised to forward a note showing how they came to that decision - this is critical because if they have their numbers wrong it won't net the treasure what they think it will.