Reply to: Likelihood of HMRC investigation

[malvolio]

I don't know of a single IT skill that a smart hardworking permie couldn't pick up in a few months at most. Especially in these day of Google searches and Stack overflow.

Can you name one?


Luckily for us there is shortage of smart hardworking permies.

Any business change programme. Things like getting them to use ITIL properly. Any architectural role, be it technical or business related. Problem management and remediation. There are lots of examples.

Thing is that lot need a broad range of disciplines (have you ever read a Service Design for an outsourced delivery? Look at how many other disciplines that touches on.) and that takes time and exposure to different environments. If you've spent 20 years working for one BigCo, you won't have that, whereas any successful contractor will have it in spades.

[cojak]

It used to be close to zero when HMRC focused on the individual contractor (as in those celebrity cases). Now that they’ve focussed on the fee-payer, the worry is that outside contracts become inside during the contract because the client gets cold feet as they’re in line to pay the tax due.

There’s little to no publicity for this but you can bet your sweet patootie that it’s happening more often.

[dogeson]

Good that you have taken all the precautions. I have some friends who don't have any insurance and yet have been working as contractors in an outside IR35 role, working in the same firm for ages! how do they sleep at night? truth is, they don't seem to care!

They don't care because that's so unlikely to happen I suppose. The odds are not in HMRC's favour. And even if they waste all the taxpayer monkey to bring him to the tribunal, how likely they can get that money back from the company? They'll have to go and make director personally liable (which apparently never happened in history). I don't see how HMRC wins overall (even if they win the case)

[RobScott]

About 5 years I think? They queried two tax years, one of them was right at the end of the period it could be queried in.

Good that you have taken all the precautions. I have some friends who don't have any insurance and yet have been working as contractors in an outside IR35 role, working in the same firm for ages! how do they sleep at night? truth is, they don't seem to care!

[Noiro]

It's common for people with expert level knowledge to underestimate their abilities (as they are often acutely aware of their own limitations, overestimating the capabilities of others). While the talented amateur has no idea what they don't know. I hope this does not reflect a personal insecurity that undermines your negotiating skills.

Perfectly describing the Dunning-Kruger effect, which applies equally to those with low ability (who think they're good because they don't know enough to realise they're not) and those with high ability (who underestimate their ability as they know they are not perfect). See also : Imposter syndrome for the latter situation.

I suspect both conditions are quite common, from personal observation in IT contract roles.

[lecyclist]

I don't know of a single IT skill that a smart hardworking permie couldn't pick up in a few months at most. Especially in these day of Google searches and Stack overflow.

Can you name one?

It's common for people with expert level knowledge to underestimate their abilities (as they are often acutely aware of their own limitations, overestimating the capabilities of others). While the talented amateur has no idea what they don't know. I hope this does not reflect a personal insecurity that undermines your negotiating skills.

[PerfectStorm]

How long have you had the company runnig before they came knocking on the door?

About 5 years I think? They queried two tax years, one of them was right at the end of the period it could be queried in.

[cannon999]

I was investigated, both on a personal level and a company level, at the same time. Not for IR35 but for income and company funds more generally. I had IPSE Plus protection, similar to QDOS in practicality.

First call was to IPSE who got their tax company involved (Markle Tax) and they took over both the personal investigation and the company one from the accountant (who had been sent it).

Whilst I don't doubt that myself and the accountant could've answered all the questions, the tax lawyers were a lot better at going "actually, that is reasonable and you've said it isn't" and "that question isn't in your scope" - they had the understanding to provide leverage.

I had been operating my company in good faith (no payment schemes, no tellies on expenses, or flights etc) but still HMRC made me justify purchases such as the company iPhone and any bank transfer payments in and out of my personal accounts (including pet names in the reference field inputted by my partner and friends... argh). For things like the iPhone, Markel Tax were great at having the clout to say "actually they can spend their company's money as they like there". An amusing moment was when they asked me to explain why I had Edenred, an employee benefit package - it came from IPSE, the same people proving the legal representation.

They did ask in passing how I'd arrived by my IR35 determinations and asked no further questions after seeing the QDOS assessments of my contracts.

Anyway it took a couple of months of me supplying info and the lawyers handling all of the comms with HMRC. It ended up with a letter not saying that I hadn't done anything wrong, but that the investigation had concluded and 'recommended' some changes to the things they didn't like our answers to.

All in all I was glad to have it - and as I've pointed out, IPSE usually pays for itself after a year of supermarket shopping and the odd holiday (though annoyingly they've taken Expedia off their perks now)

How long have you had the company runnig before they came knocking on the door?

[PerfectStorm]

I was investigated, both on a personal level and a company level, at the same time. Not for IR35 but for income and company funds more generally. I had IPSE Plus protection, similar to QDOS in practicality.

First call was to IPSE who got their tax company involved (Markle Tax) and they took over both the personal investigation and the company one from the accountant (who had been sent it).

Whilst I don't doubt that myself and the accountant could've answered all the questions, the tax lawyers were a lot better at going "actually, that is reasonable and you've said it isn't" and "that question isn't in your scope" - they had the understanding to provide leverage.

I had been operating my company in good faith (no payment schemes, no tellies on expenses, or flights etc) but still HMRC made me justify purchases such as the company iPhone and any bank transfer payments in and out of my personal accounts (including pet names in the reference field inputted by my partner and friends... argh). For things like the iPhone, Markel Tax were great at having the clout to say "actually they can spend their company's money as they like there". An amusing moment was when they asked me to explain why I had Edenred, an employee benefit package - it came from IPSE, the same people proving the legal representation.

They did ask in passing how I'd arrived by my IR35 determinations and asked no further questions after seeing the QDOS assessments of my contracts.

Anyway it took a couple of months of me supplying info and the lawyers handling all of the comms with HMRC. It ended up with a letter not saying that I hadn't done anything wrong, but that the investigation had concluded and 'recommended' some changes to the things they didn't like our answers to.

All in all I was glad to have it - and as I've pointed out, IPSE usually pays for itself after a year of supermarket shopping and the odd holiday (though annoyingly they've taken Expedia off their perks now)

[hobnob]

I don't know of a single IT skill that a smart hardworking permie couldn't pick up in a few months at most. Especially in these day of Google searches and Stack overflow.

It depends on what they already know. E.g. if someone works with Cisco kit, they could get through the CCNA syllabus in a few months. However, it would take a lot longer to get up to CCIE level.

There's also a question of what area they're in. E.g. if you've got that same person (network engineer) and ask them to write a device driver for a new graphics card, they're going to struggle. Likewise, if you take someone who spends all day writing device drivers and then ask them to set up cloud-based VMs, that's a completely different skillset.

More generally, it doesn't really matter how smart/hardworking they are, the question is whether their employer would want to pay their salary + training to focus on this for a few months, during which time they're not doing their normal task. That in turn will depend on how often this task needs to be done. E.g. if a company needs to migrate their email from on-premises to Exchange Online, that's basically a one-off task, so i might be better to hire a contractor (who's done it several times before) and leave the permies to do their regular duties.

[NotAllThere]

I don't know of a single IT skill that a smart hardworking permie couldn't pick up in a few months at most.

I can. Problem solving for one.

You clearly work at quite a low level.

[WTFH]

I don't know of a single IT skill that a smart hardworking permie couldn't pick up in a few months at most. Especially in these day of Google searches and Stack overflow.

Can you name one?

Do you work for one of the big 5?
When I used to go on sites where they had put in their IT people, I realised that the only skill they had was that they were fast readers. They’d spend a lot of time reading the standard documentation that came with the software, then be experts by the next day.

[cannon999]

smart hardworking permie

Diabolical.

A client would have to replace me with 10 permies to get the same amount of work done not to mention the likelyhood of it being the same quality is very low. The reality is that some contractors are x10 better than permies. That's why there is a premium. I have been at the same place now for a while and yet to see a permie that delivers a small fraction of what I deliver. That's why the end client keeps me. IT skills are a service just like any other skillset. Is an electrician an employee as well then? I go to the same one when I need work doing as I know they do a better job than most.

[BR14]

I don't know of a single IT skill that a smart hardworking permie couldn't pick up in a few months at most. Especially in these day of Google searches and Stack overflow.

Can you name one?

.

Z/OS systems engineer.
HTH.

[Fraidycat]

Delivering a solution that none of the permies have the skill to deliver is what a contractor does.

I don't know of a single IT skill that a smart hardworking permie couldn't pick up in a few months at most. Especially in these day of Google searches and Stack overflow.

Can you name one?


Luckily for us there is shortage of smart hardworking permies.