Reply to: IR35- NHS / employer / employee status

[jamesbrown]

I agree that a role can change but Im assuming in this case it hasnt and thats all thats changed is that the roles IR35 status has been declared by the end client. Point beings its pretty difficult to argue that honestly even though the role was the same it was outside before and the client is lying.

Not lying, but mistaken. For example, if the client used CEST

[psychocandy]

I didn't say he was both at the same time - that would be impossible.

PC stated that it would be easy for HMRC to argue that since the role was now inside IR35 it must have always been inside IR35.

The judgement in JLJ shows that this is not the case - in that situation, the contractor was outside IR35 and then inside IR35 at different times over the same role. Which could be what the OP has done.

I agree that a role can change but Im assuming in this case it hasnt and thats all thats changed is that the roles IR35 status has been declared by the end client. Point beings its pretty difficult to argue that honestly even though the role was the same it was outside before and the client is lying.

[TheFaQQer]

He wasn't both at the same time.

He started outside then ended up inside during the time he was at the client company.

I didn't say he was both at the same time - that would be impossible.

PC stated that it would be easy for HMRC to argue that since the role was now inside IR35 it must have always been inside IR35.

The judgement in JLJ shows that this is not the case - in that situation, the contractor was outside IR35 and then inside IR35 at different times over the same role. Which could be what the OP has done.

[mudskipper]

Doing the IR35 hokey cokey

[SueEllen]

JLJ shows that you can be both for the same role.

He wasn't both at the same time.

He started outside then ended up inside during the time he was at the client company.

[TheFaQQer]

They can't lose IMHO. How on earth can you argue the case for being Outside IR35 when the client is declaring you Inside IR35 on April 2017 for the same role. Its like falling off a log for HMRC - they have the client telling them this role was INSIDE IR35 all along.

JLJ shows that you can be both for the same role.

[jamesbrown]

They can't lose IMHO.

They can. Whether or not the client has made an assessment (e.g. with a discredited tool), the facts of the case will still be heard, and history shows that very few contracts are deemed inside. That said, you're right that it's a serious impediment, particularly when the contractor has no evidence of prior due diligence (as seems to be the case here), and many will just fold in the absence of proper legal advice (assuming they can pay). The best the OP can do here is to try and put in place that due diligence ASAP (for the old contract), and hope that it isn't a negative outcome! If it is, they're fecked.

[psychocandy]

Exactly who all this was aimed At. HMRC will consider this a win.

They can't lose IMHO. How on earth can you argue the case for being Outside IR35 when the client is declaring you Inside IR35 on April 2017 for the same role. Its like falling off a log for HMRC - they have the client telling them this role was INSIDE IR35 all along.

The amount of deemed tax/NI etc is going to be massive... Sure I worked it out before for me (before I sensibly bailed from a potentially Inside IR35 BEFORE April) because there was an insurance policy you could get (nuts for orgs to offer them IMHO but thats their problem not mine). It worked out, and this was only two years that the liability was over £30K without adding fines... Thats just two years.

Imagine if the OP has professional representation (e.g. IPSE, QDOS)? I doubt it but imagine being a lawyer and this one landing on your desk. It'd be like trying to get Fred West off a murder charge!

[northernladuk]

Exactly who all this was aimed At. HMRC will consider this a win.

[psychocandy]

No. What happened was that on 6/4/17 liabilitly for IR35 determination shifted from your ltd.co. to the Agency/NHS trust. Who then decided that you were subject to IR35.

Your contract prior to then may or may not have been subject to IR35, but you've been operating it as though it wasn't. If in fact it was subject to IR35 and HMRC find out (and if you ask them, the default answer will be that your contract was subject to IR35, regardless of the facts, which is why you don't ask them), then you'll have to pay four years worth of employers NIC - at least.

Very scary indeed. Assuming OP followed the low salary/dividend model for the last 4 years then the "deemed" tax would indeed be MASSIVE. Plus fines. Losing house/bankrupt sort of totals....

OP - Don't you watch the news or anything?

[NotAllThere]

I was only subject to IR35 on 6/4/17

No. What happened was that on 6/4/17 liabilitly for IR35 determination shifted from your ltd.co. to the Agency/NHS trust. Who then decided that you were subject to IR35.

Your contract prior to then may or may not have been subject to IR35, but you've been operating it as though it wasn't. If in fact it was subject to IR35 and HMRC find out (and if you ask them, the default answer will be that your contract was subject to IR35, regardless of the facts, which is why you don't ask them), then you'll have to pay four years worth of employers NIC - at least.

[psychocandy]

Never ceases to amaze me that people work and have no idea what is going on. On the plus side, its people like OP who will be easy targets for HMRC.

OP - Do you have IR35 insurance - via IPSE or QDOS maybe? Do you have an accountant even?

[psychocandy]

First, do NOT speak to HMRC directly about the IR35 status of your current or previous contracts. They are emphatically not on your side. If you want to establish the facts about you previous contract - and it’s unbelievable to me that you didn’t do this before now - speak to one of the independent status experts and have your earlier contract and working practices reviewed. There must now be a serious risk that your status was not as declared over the prior 4 years. Get proper legal advice ASAP.

FFS. Its like a burglar popping into the police station to ask if there going to be any police cars driving around the place tonight.

[northernladuk]

Don't go near anyone offering loans or 80%+ retention rates. Doesn't need research, just don't do it.

[jamesbrown]

Hi guys,
Thank you for the feedback . Unfortunately I am not as savvy on this site as many of you seem to be.
I was only subject to IR35 on 6/4/17 - had 6 weeks warning and told to contact unbrella companies - i spent many hours researching companies claiming to pay you by a loan method - which would not be repaid etc - most of these appears to be registered with companies house this year.
Trying to get any info back form my agency / the NHS Trust i work for was extremely difficult - my accountant had little helpful knowledge on the situation and time was running out. The Trust then decided i fell within IR35 and that they were using this company Direct Engagement 24/7 to pay me - deduct employer NIC - the Trust then deduct employee NIC + Tax.
Can you clarify why you say I was outside IR35 for 4 years ?
I am trying to contact the IR35 specialists through HMRC but its constantly engaged.

First, do NOT speak to HMRC directly about the IR35 status of your current or previous contracts. They are emphatically not on your side. If you want to establish the facts about you previous contract - and it’s unbelievable to me that you didn’t do this before now - speak to one of the independent status experts and have your earlier contract and working practices reviewed. There must now be a serious risk that your status was not as declared over the prior 4 years. Get proper legal advice ASAP.