Reply to: Still able to dodge tax

[Mich the Tester]

WHS

Doesn't worry me though, as my Ltd is a sort of anagram of my name, along the lines of Hot Towel Ltd

Jelqing Services Incorporated?

[Zero Liability]

Lucky that tax isn't based on whether the tax payer can see the point.

Yes, then it'd border on having to justify itself to those paying it. Can't have that.

[amcdonald]

I'm not sure there is anything particularly intelligent about using the company name as the basis for investigation though. Like I said, it feels like clutching at straws and is a very weak pointer at best..

Depends if W H Smith, Amstrad etc get investigated

[OwlHoot]

Which is seriously clutching at straws, even by HMRC standards...

MyCo is called <MyInitials> Software Ltd...not because I'm a dirty tax avoider who operates within IR35, but simply because I lacked imagination when it comes to naming my company.

WHS

Doesn't worry me though, as my Ltd is a sort of anagram of my name, along the lines of Hot Towel Ltd

[TheCyclingProgrammer]

The idea is that it indicates that you are selling yourself in particular, rather than selling a service that could be completed by yourself or a substitute. Again, it's a pointer for an investigation to be launched, not an indicator of your actual status under IR35.

Well yes. I don't think I'd ever argue that I'm not selling myself or my services...I am. Like you say, it's a pointer but not an indicator (I'm not too fussed about arguing my IR35 status on the matter of personal service or RoS; MOO and direction/control is enough for me).

In my mind, if they are actually using some level of intelligence to choose targets, rather than picking companies out of a hat, then it's a good thing. It may waste less money. I'm trying really hard to convince myself of that!

I'm not sure there is anything particularly intelligent about using the company name as the basis for investigation though. Like I said, it feels like clutching at straws and is a very weak pointer at best.

I know a few contractors using "Myname Ltd", and unfortunately they've never heard of IR35 and when I talk to them about their gigs I'm fairly certain that they would be caught. Worse, they'd probably give HMRC all the info they needed on the first phonecall to show that they're caught. These are very much permies who happen to get paid a bit more for fewer benefits.

Perhaps but I think their choice of name is coincidental and not indicative of much else other than, like I said, a lack of imagination.

I suppose if anything, it's yet more reason to keep a PCG(+) subscription, if the changes of an investigation are going to increase due to HMRC picking up on silly criteria like the above.

[wurzel]

I got a UK Contractor email showing that HMRC are looking at if the ratio of low salary to high dividends is worth further investigation, as one of the headlines.

Can't link to it as I deleted it, but interesting nonetheless.

I've heard this discussed before and have looked into it. I've also heard it said that suddenly changing the salary/divi ratio after years of doing lowest salary/max divis can also flag you up.
My thoughts are that if I am IR35 compliant and have done due diligence and have QDOS and PCG plus in place why would I spend more money needlessly by giving myself a bigger salary?

[Ticktock]

Which is seriously clutching at straws, even by HMRC standards...

MyCo is called <MyInitials> Software Ltd...not because I'm a dirty tax avoider who operates within IR35, but simply because I lacked imagination when it comes to naming my company.

Yes and no. While you do get retail businesses named after whoever set them up, these tend to be more historical.

The idea is that it indicates that you are selling yourself in particular, rather than selling a service that could be completed by yourself or a substitute. Again, it's a pointer for an investigation to be launched, not an indicator of your actual status under IR35.

In my mind, if they are actually using some level of intelligence to choose targets, rather than picking companies out of a hat, then it's a good thing. It may waste less money. I'm trying really hard to convince myself of that!

I know a few contractors using "Myname Ltd", and unfortunately they've never heard of IR35 and when I talk to them about their gigs I'm fairly certain that they would be caught. Worse, they'd probably give HMRC all the info they needed on the first phonecall to show that they're caught. These are very much permies who happen to get paid a bit more for fewer benefits.

[TheCyclingProgrammer]

It also mentioned calling your company "Mr Ticktock Ltd" (ie. Myname Ltd), rather than "Clockwork Services Ltd" as a pointer.

Which is seriously clutching at straws, even by HMRC standards...

MyCo is called <MyInitials> Software Ltd...not because I'm a dirty tax avoider who operates within IR35, but simply because I lacked imagination when it comes to naming my company.

[TheCyclingProgrammer]

This was already posted by someone. It refers to companies using workers who claim they are self-employed.

Examples given were people working in Duty Free shops and other low paid roles. The only way that could be construed to include you is if you have a Ltd (the intermediary), but rather than taking a salary you instead say that you are self-employed and invoice your Ltd.

EDIT: Although these people may be avoiding NIC, if they had LTDs then they would almost certainly be IR35 caught. "Yes, I work in a shop, just like anybody employed in any other shop, they give me a uniform I must wear, shifts I must work, I must do the work in a certain way and present the image of the shop, but really, I'm not employed by them!".

These people will have minimal employee NICs, but their employers will now have to pay NICs, and actually give them some rights.

This. Although in this case, the focus is on the employer rather than the "employee" because they are the ones who are trying to shirk their responsibilities as an employer (including paying NICs) and it's the "employee" that's getting screwed.

[MPwannadecentincome]

I got a UK Contractor email showing that HMRC are looking at if the ratio of low salary to high dividends is worth further investigation, as one of the headlines.

Can't link to it as I deleted it, but interesting nonetheless.

That link is actually still on the right hand side =========================>

HMRC's IR35 team 'monitoring dividend levels' :: Contractor UK

[darmstadt]

Yes, I'd agree on that, but then it would include two world wars which I think we could consider 'exceptional circumstances'. As for the rest, I simply don't see the point in giving more money to government when it has proven time and time again to be unable to manage it.

Although it ultimately comes down to the elected officials in government they're not really the ones squandering the money. The people who actually do all the figures are the unelected officials, namely civil servants and what seems to be increasingly the case nowadays, particularly with the current government, is the secondment of employees of financial institutions to assist in the financial shenanigans of said people...

[Ticktock]

I got a UK Contractor email showing that HMRC are looking at if the ratio of low salary to high dividends is worth further investigation, as one of the headlines.

Can't link to it as I deleted it, but interesting nonetheless.

Yes, it was said that low salary / high dividends could be used as pointer as to whether to launch an IR35 investigation. It also mentioned calling your company "Mr Ticktock Ltd" (ie. Myname Ltd), rather than "Clockwork Services Ltd" as a pointer.

Although the salary / dividend ratio might swing the crosshairs in my direction, I don't really see it as any worse than a random selection of targets - this doesn't change the number of investigations in itself, it isn't a pointer to being inside IR35 and it doesn't alter the defence of an investigation.

[Mich the Tester]

If we're moaning about the way the government wastes money, then we certainly want HMRC to be focusing on those cases where it has the most to gain. And they should start with those that pay exactly the right amount of salary - i.e. however accountants work it out that you pay the minimum tax, because that can only be about tax avoidance.

...which is legal.

[VectraMan]

I got a UK Contractor email showing that HMRC are looking at if the ratio of low salary to high dividends is worth further investigation, as one of the headlines.

Can't link to it as I deleted it, but interesting nonetheless.

If we're moaning about the way the government wastes money, then we certainly want HMRC to be focusing on those cases where it has the most to gain. And they should start with those that pay exactly the right amount of salary - i.e. however accountants work it out that you pay the minimum tax, because that can only be about tax avoidance.

[GazCol]

I would be happier if they increased corporation tax for 1 man Ltd companies by 1% and then repeal IR35. Much cleaner and easier.

And with a better end result for all parties.