Reply to: HMRC Briefing Paper - New CEST and No Historic Enquiries using SDS Data

[JohntheBike]

The only naivety in the loan charge debacle was anyone thinking they would get away with it.

The conflation of IR35 and Loan Charge is misleading. They are two mutually exclusive concepts and should be treated as such.

yes, they shouldn't be connected. However, it's clear that HMRC's behaviour over the loan charge should be thoroughly investigated, which is what the enquiry should be doing, but I have my misgivings.

[wiffwaffwaa]

Your innocence and naivety are refreshing as much as they are dangerous and frustrating.

Just speak to anyone involved in the Loan Charge debacle and you will realise how underhand, devious and downright evil HMRC really are.

Prepare for the worst. There is no alternative.

The only naivety in the loan charge debacle was anyone thinking they would get away with it.

The conflation of IR35 and Loan Charge is misleading. They are two mutually exclusive concepts and should be treated as such.

[polomf]

I shall be going umbrella and shutting my company down to reduce any risk

If I need I will open another/new company if outside gigs start popping up again next year/ I work mostly in financial services, so expect umbrella gigs to be the most common given all the policy decisions.

[JohntheBike]

Your innocence and naivety are refreshing as much as they are dangerous and frustrating.

Just speak to anyone involved in the Loan Charge debacle and you will realise how underhand, devious and downright evil HMRC really are.

Prepare for the worst. There is no alternative.

agreed

[ChimpMaster]

I personally feel this is a very positive development for contractors. Never before have I heard of HMRC making a categorical statement (as categorical as it can realistically be) ruling something out.

Your innocence and naivety are refreshing as much as they are dangerous and frustrating.

Just speak to anyone involved in the Loan Charge debacle and you will realise how underhand, devious and downright evil HMRC really are.

Prepare for the worst. There is no alternative.

[OneManBand]

I personally feel this is a very positive development for contractors. Never before have I heard of HMRC making a categorical statement (as categorical as it can realistically be) ruling something out.

[Paralytic]

Whilst its all down to interpretation, the "reason to suspect" refers to fraud and criminal behaviour, not just a general "reason to suspect" they might get some money out of you.

None of your suggested interpretations suggest fraud or criminal behaviour.

How you do disprove someones suspicion? Because that what you'll have to do if you're investigated and HMRC claim they suspected fraud.

[daemon]

The “reason to suspect” leaves the scope to be very wide if they wish...
Out to in same client- reason to suspect
Contract to perm same client - reason to suspect
Blanket outside determinations at client - reason to suspect all historical contracts at same client were in
Etc
Etc

They are really stating nothing here just playing with words to commit to nothing


Sent from my iPhone using Tapatalk

Whilst its all down to interpretation, the "reason to suspect" refers to fraud and criminal behaviour, not just a general "reason to suspect" they might get some money out of you.

None of your suggested interpretations suggest fraud or criminal behaviour.

[TheInvoicer]

The HMRC statement, like all of them, is very carefully worded.

HMRC have taken the decision that they will only use information resulting from these changes to open a new enquiry into earlier years if there is reason to suspect fraud or criminal behaviour.

The emphasis is mine.

Read these carefully and make a judgement.

The “reason to suspect” leaves the scope to be very wide if they wish...
Out to in same client- reason to suspect
Contract to perm same client - reason to suspect
Blanket outside determinations at client - reason to suspect all historical contracts at same client were in
Etc
Etc

They are really stating nothing here just playing with words to commit to nothing


Sent from my iPhone using Tapatalk

[BlueSharp]

This will be unpopular, but I believe HMRC have been absolutely clear in the past that they will go back and chase back taxes, should you have incorrectly being classified as being outside IR35 instead of inside.

What hasn't been clear, is the determination of the IR35 for varying scenarios. But this is common with legislation and interpretations.

However with this released guidance from HMRC, this is the first time HMRC are explicitly stating their intentions with newly interpreted inside R35 contracts from April 2020. They have not previously stated this, so I for one welcome this release, even if I find the entire IR35 legislation counter productive.

Comes down to your apitite to risk. They have made it clear the data will be used where before they said it would not. Blanket letter to all of those who operated and stayed, stating we suspect you have incorrectly declared yourself outside for x years at y client as they have now deemed you inside. Please correct your tax returns or we may investigate for fraudulent ir35 deceleration.

[krytonsheep]

It would make sense that HMRC will focus more on non-compliance after the private sector reforms go through. They'll want to build up some case law to scare off medium/large companies from thinking they can just restructure contracts and carry on as usual.


"The cost of non-compliance in the private sector is growing and will reach £1.2 billion a year by 2022/23"

Going after contractors for work done pre-reform isn't really going to help improve their tax receipts needed to run public services.
But maybe they have a different take on that?

[Lockhouse]

Assuming that you're not the random victim of a current investigation, I would have thought that if you close your company and go umbrella that once you've got the OK to close you're pretty much in the clear. Keep the insurances going until your next years' tax return is accepted just in case.

IANAA.

[CompoundOverload]

The HMRC statement, like all of them, is very carefully worded.

HMRC have taken the decision that they will only use information resulting from these changes to open a new enquiry into earlier years if there is reason to suspect fraud or criminal behaviour.

The emphasis is mine.

Read these carefully and make a judgement.

*Reason to suspect* now how would / could they possibly pin point individuals, they will no doubt do targeted campaigns at institutions (see GSK) as picking off individual LTD's would be a slow and drawn out process given their limited resources.

First things I "suspect" they will look at is those who deemed themselves outside and then have stayed at the same firm post April and changed to inside - easy pickings!

[webberg]

The HMRC statement, like all of them, is very carefully worded.

HMRC have taken the decision that they will only use information resulting from these changes to open a new enquiry into earlier years if there is reason to suspect fraud or criminal behaviour.

The emphasis is mine.

Read these carefully and make a judgement.

[TwoWolves]

You won't get that definitive statement, because it would be acknowledging that they are breaking the law. They can make policy decisions to not use Ltd contractors any longer, but not policy decisions that people are thrown inside IR35. They can only do that on the facts.

I see your point. Looks like HMRC have condemned the industry to a giant shuffle then.