Reply to: IR35 when it is public sector

[webberg]

see my other post.There are ways and means of legally combating HMRC's conduct.

HMRC (and its predecessors) have had over 100 years of dealing with taxpayers who are deliberately evasive, obstructive, pedantic over details, claim political conscience prevents them paying tax, disagree with tax policy etc. See the case I highlighted. The gentlemen there had some moral truth behind his points, if very little legislative force.

I would be amazed if any professional adviser suggested that a campaign such as you suggest is an effective way of making HMRC back off when they have valid grounds for enquiry.

(After saying that the last few years has demonstrated to me that many advisers, belonging to professional bodies or otherwise, are prepared to go dangerously close - in my opinion - to the line between legitimate planning and abusive avoidance.)

[northernladuk]

well, as you mentioned the ET, the inspector was apprehensive because I indicated to them that if I won at the ET, then all the taxes that MyCo had paid would be claimed back and that they's have to go after the client for the PAYE taxes.

And just for the record, they tried to intimidate me by slapping a tax bill for expenses greater than the expenses I'd claimed for. I wasn't putting up with that bullying, so I retaliated of course. Remember, all aspects of the establishment are against the people. Unless you resist, you will suffer in the long term.

You do talk some rubbish.

And all this talk of doing this by mail to frustrate HMRC. They are masters of this so won't make one iota of difference.

[JohntheBike]

That may have been to what YOU were referring, but it isn't what I had in mind.

well, as you mentioned the ET, the inspector was apprehensive because I indicated to them that if I won at the ET, then all the taxes that MyCo had paid would be claimed back and that they's have to go after the client for the PAYE taxes.

And just for the record, they tried to intimidate me by slapping a tax bill for expenses greater than the expenses I'd claimed for. I wasn't putting up with that bullying, so I retaliated of course. Remember, all aspects of the establishment are against the people. Unless you resist, you will suffer in the long term.

[WordIsBond]

actually, I was referring to (stuff)

That may have been to what YOU were referring, but it isn't what I had in mind.

[JohntheBike]

That is wholly unrealistic and inaccurate and i would urge all those reading to ignore it.

The taxpayer in the case below makes the "preparations" discussed above seem kindergarten material yet HMRC pursued, issued demands and won in Tribunal.

Jasson v Revenue & Customs (PROCEDURE : application to strike out appeals on basis of absence of jurisdiction) [2019] UKFTT 599 (TC) (24 September 2019)

That is wholly unrealistic and inaccurate and i would urge all those reading to ignore it.

see my other post.There are ways and means of legally combating HMRC's conduct.

[JohntheBike]

I don't think I'd count on extreme boredom, induced by endless blathering about ETs, as an effective defence, but to each his own.

actually, I was referring to making sure that every communication from HMRC is in writing and if there is anything incorrect in those communications, then you challenge HMRC over the incorrect details and initially avoid addressing the questions in such communications. HMRC continually got MyCo's name wrong when investigating my expenses claims and I pulled them up about it to the point where I made an official complaint to the Parliamentary Ombudsman. Rumour (from my accountant) has it that the inspector dealing with my case was reprimanded and his career suffered. This is the sort of action I'm talking about.

[WordIsBond]

If you cause enough trouble for an inspector and the system, HMRC are likely to back off.

I don't think I'd count on extreme boredom, induced by endless blathering about ETs, as an effective defence, but to each his own.

[webberg]

Another poster here has hit the nail on the head. If you cause HMRC as much trouble as possible, then they are likely to conclude that the potential tax grab isn't worth the effort.

That is wholly unrealistic and inaccurate and i would urge all those reading to ignore it.

The taxpayer in the case below makes the "preparations" discussed above seem kindergarten material yet HMRC pursued, issued demands and won in Tribunal.

Jasson v Revenue & Customs (PROCEDURE : application to strike out appeals on basis of absence of jurisdiction) [2019] UKFTT 599 (TC) (24 September 2019)

[JohntheBike]

Using the technicalities of the rules you'd be right. In reality length of time brings with it apathy and part and parcel comes in to play. You've got to have dotted every single i and t for that entire period. Slight lapses will occur and also the clients view on you will change which you can do nothing about.
IMO the fact you've been doing a BAU role longer than most permies should be a factor and I believe a bit of common sense would back that up. 14 years is extraordinary and could easily test any existing thoughts on time as a factor.
Remember, one of the only cases HMRC have won (or split as it was) had time as a major factor. JLJ lost his case on the fact he'd been there a long time and slipped in to bad ways. If he hadn't been there as long he wouldn't have lost. That, to me, says that time IS a factor.

Just quoting the rules say time doesn't have a bearing, particularly with that length, is a very naive view.

Remember, QDOS have a clause that says they won't cover a role they can't win (or something along those lines. Will QDOS really want to be taking on a case with that length of time that has never been tested bearing in mind the costs they'll rack up if you lose?
Out of interest, what level is your insurance at? If you lose what will they cover? I really don't think the basic 50k is going to cover your situation so I wouldn't be sitting quite so comfortably as you appear to be doing so.

It might be but it's pretty irrelevant as evidence goes.



Yes, because you butted into a question about public sector with



Which is totally irrelevant as you aren't in the PS.

I wouldn't be sitting quite so comfortably as you appear to be doing so.

I've never claimed to be sitting comfortably. I believe I've done as much as I can, and more than most, to prepare myself for a challenge by HMRC.

Another poster here has hit the nail on the head. If you cause HMRC as much trouble as possible, then they are likely to conclude that the potential tax grab isn't worth the effort.

I've never earned the high daily rates that some quote here and I've always paid a reasonable salary and dividends. Now, with the advent of the dividend tax, I've calculated the difference in nett remuneration, if I were to be classed subject to the new rules, wouldn't be as great as many on here fear for themselves.

IPSE always claimed that hundreds of members were able to ward off HMRC by using the tax investigation insurance that members enjoyed. I would guess that many of them would have enjoyed much higher rates than I have, but even so, HMRC clearly backed off.

Life is full of risks and issues. HMRC is one of those, but I've survived the death of my son and one of my grandsons. So I'll just have to tackle HMRC when or if I have to.

[JohntheBike]

You might be onto something here. Hector would probably die of boredom before completing his investigation. The inspector in charge would be writing his superior saying, 'Whatever we think he owes, it isn't worth it. He thinks Extra Terrestrials or something are going to come and carry him away out of our grasp. Let's wait until he kicks off and see what we can get from his estate.'

The inspector in charge would be writing his superior saying, 'Whatever we think he owes, it isn't worth it.

at last someone has grasped what I've been saying. If you cause enough trouble for an inspector and the system, HMRC are likely to back off. That's the approach I adopted.

Let's wait until he kicks off and see what we can get from his estate.

my estate won't be subject to death duties or capital gains tax. Talk to your solicitor if yours will be.

[WordIsBond]

Sigh.

Best comment on the thread.

[WordIsBond]

but I'm particularly poisonous

You might be onto something here. Hector would probably die of boredom before completing his investigation. The inspector in charge would be writing his superior saying, 'Whatever we think he owes, it isn't worth it. He thinks Extra Terrestrials or something are going to come and carry him away out of our grasp. Let's wait until he kicks off and see what we can get from his estate.'

[JohntheBike]

I'll give you good odds that:

The case law you seek to rely upon is rather less strong than you think, instead being powerful only in the context of the circumstances heard:

That the priority of form over substance which this case used in examining the substitution clause is entirely at odds with the interpretation of tax law generally and contrary to judicial principles:

That the subsequent cases will reverse the rather bizarre notion that a clause inserted into a contract ONLY to produce a tax outcome and which as no practical commercial effect and no real possibility of being executed, can be placed in the "irrelevant" pile.

If you have persuaded a tax firm to "insure" on the basis of that clause and the other elements you mention, you have done very well.

Certainly we would not.

The case law you seek to rely upon is rather less strong than you think, instead being powerful only in the context of the circumstances heard:

possibly, but then it is for me personally and as I've said elsewhere, I've done as much as I can, and more than most, to protect myself from a successful challenge from HMRC. Remember, they backed off originally from investigating me. I might seem like low hanging fruit, but I'm particularly poisonous, as a previous Parliamentary Solicitor knows.

[northernladuk]

I was referring to a case where the client stated that they would not accept a substitute, but because the contract included a right of substitution, the claim for employee benefits was dismissed and the judge made specific reference to the substitution clause in his summing up.

Better hope your client agrees. You having a specialist skill set which is why you've been doing it for so long might lead them to not want one I which case the clause is a sham.

There has also been a case where judge was quoted that the untested RoS was virtually a sham. Kate Cottrell has also stated RoS has less significance.

All that and untested in 14 years. Not quite the pillar I think you are hoping it is.

And BTW lance started you on this journey not me.

[JohntheBike]

Using the technicalities of the rules you'd be right. In reality length of time brings with it apathy and part and parcel comes in to play. You've got to have dotted every single i and t for that entire period. Slight lapses will occur and also the clients view on you will change which you can do nothing about.
IMO the fact you've been doing a BAU role longer than most permies should be a factor and I believe a bit of common sense would back that up. 14 years is extraordinary and could easily test any existing thoughts on time as a factor.
Remember, one of the only cases HMRC have won (or split as it was) had time as a major factor. JLJ lost his case on the fact he'd been there a long time and slipped in to bad ways. If he hadn't been there as long he wouldn't have lost. That, to me, says that time IS a factor.

Just quoting the rules say time doesn't have a bearing, particularly with that length, is a very naive view.

Remember, QDOS have a clause that says they won't cover a role they can't win (or something along those lines. Will QDOS really want to be taking on a case with that length of time that has never been tested bearing in mind the costs they'll rack up if you lose?
Out of interest, what level is your insurance at? If you lose what will they cover? I really don't think the basic 50k is going to cover your situation so I wouldn't be sitting quite so comfortably as you appear to be doing so.

It might be but it's pretty irrelevant as evidence goes.



Yes, because you butted into a question about public sector with


Which is totally irrelevant as you aren't in the PS.

so I wouldn't be sitting quite so comfortably as you appear to be doing so.

Is it not the case that until now, it has always been the responsibility of the contractor's company to determine the contractor's employment status with reference to IR35. If this is the case, as I understand it is, then it would be the contractor's company which would be liable for any tax penalty. Liability would only pass to the individual if it could be proven that the conduct of the directors was illegal, incompetent or unprofessional.

I have taken as many steps as I can, and more than most, to establish my status with regards to IR35. So I guess the directors of MyCo could not be accused of illegal, incompetent or unprofessional conduct. The conclusion then should be that liability for unpaid taxes should not transfer to me personally, should HMRC prove that MyCo did not correctly assess my employment status with regards to IR35