Another high profile IR35 loss for HMRC

[simes]

Why would HMRC look at working practices if they can nail you for a poor contract?

They'd look at the working practices because I'd tell 'em to.

In court.

With the help of IPSE.

[northernladuk]

They'd look at the working practices because I'd tell 'em to.

In court.

With the help of IPSE.

You've absolutely no idea of the stress and time it would take to get to that stage do you?

I am sure Batcher (who's been through this) won't agree with your fanciful musings.

And if IPSE are stupid enough to start wasting my money defending people that haven't put a modicum of effort in to their defence I'd be cancelling my membership.

[simes]

You've absolutely no idea of the stress and time it would take to get to that stage do you?

Agreed. Absolutely none whatsoever.

There is another thing to consider here which is about as contemporary as one can get.

All those Loan Charge people who had their deal reviewed by the HMRC, thought they were safe, and went about their way assured of their above board saintliness, are now facing retrospective actions that were hitherto unheard of.

If this can happen, my question is this: Just what do you think a QDOS/IPSE review of a single contract in today’s world really assures you of? While the world of IR35 is such a mess, pinning all your hopes to that is an utter misnomer, a fallacy, a joke.

IMHO…

[Dark Black]

Agreed. Absolutely none whatsoever.

There is another thing to consider here which is about as contemporary as one can get.

All those Loan Charge people who had their deal reviewed by the HMRC, thought they were safe, and went about their way assured of their above board saintliness, are now facing retrospective actions that were hitherto unheard of.

If this can happen, my question is this: Just what do you think a QDOS/IPSE review of a single contract in today’s world really assures you of? While the world of IR35 is such a mess, pinning all your hopes to that is an utter misnomer, a fallacy, a joke.

IMHO…

A contract review certainly isn't a magic bullet, but it is another weapon in your armoury should the worst happen and you get an enquiry. It should be used alongside working practices.

If nothing else, it should help to show due-diligence to avoid extra penalties on top of tax liabilities should the case go against you.

[simes]

You've absolutely no idea of the stress and time it would take to get to that stage do you?

I am sure Batcher (who's been through this) won't agree with your fanciful musings.

Having just done My due diligence and looked into Batcher's story, I found the below.

https://www.contractoruk.com/forums/...tml?highlight=

Back in the early 2000s I was subject to an IR35 investigation. I had TLC35 with QDOS (or it's equivalent at the time) and was a member of the PCG.

During that time (4 years) I had a few people at QDOS on my case but they seemed to change every few months and I eventually had Seb Maley representing me. It came to the point that HMRC claimed I owed them £52k so I wanted to go to the commissioners for appeal. QDOS said my cover didn't include this, they would still represent me but I would need to pay the £7k cost myself.

I was under the impression that any win at the commissioners would be good news for contractors and that QDOS would get more people buying TLC35 because of the publicity but they refused to budge.

I then contacted the PCG legal department (I should have done this first!!) and once they were involved it didn't take long for them to shoot HMRC's case down. No need for the commissioners as HMRC dropped the case and didn't even pursue the expenses and other things they said I had misclaimed during the investigation.

Needless to say I didn't take up renewal of TLC35 and am happy to pay into the IPSE pot to help others, at least until next April when the game changes again.

https://www.feefo.com/en-gb/reviews/...e=YEAR&sku=TLC

1. TLC35 came WITH a contract review.
And
2. HMRC still furthered the investigation until PCG (now IPSE) got involved.

All of which makes your input about 'fanciful musings' and 'just what I Should do about reviews' a complete and utter crock of the usual unresearched and all(un)knowing spouted nonsense.

What's yuh next point?

[northernladuk]

If this can happen, my question is this: Just what do you think a QDOS/IPSE review of a single contract in today’s world really assures you of? While the world of IR35 is such a mess, pinning all your hopes to that is an utter misnomer, a fallacy, a joke.

IMHO…

And there is your problem.


Another article that has a telling statements directly from HMRC
What triggers an IR35 investigation?

"We do know, however, that HMRC have to prioritise between cases, and there are ways of keeping your head below the parapet," Mr Kell advised.."

Having a proper contract with expert backing will undoubtedly help drop you off the priority list.

Here is what an investigation letter looks like..
IR35 investigation: HMRC notification letter example %%sep%% %%sitename%% | Larsen Howie

Noteable requests

Copies of all contracts and supporting documentation giving rise to that income. Supporting documentation may include, but is not limited to:

You send an unchecked error riddled contract or a watertight one with evidence of a professional review?
Also

Will you please also tell me whether you have considered the possibility of the company being subjected to what is commonly referred to as the IR35 legislation? If you have, and have concluded that the company is not subject to that legislation, then please explain to me the basis upon which you arrived at that conclusion. I am asking this to help me be fully aware of and understand any view you may hold on the application of the IR35 legislation.

Showing full diligence around IR35 will be a massive plus here as they'll take note you've done your homework. A comment about IR35 insurances/representation will also put the scares on them.

And a detailed post on how an IR35 case progresses from Seb himself.

Seb Maley from IR35 status experts Qdos Contractor, says that contractors need to ensure the response to this letter is very carefully worded: “HMRC ask whether you have considered IR35 and, if so, why you have concluded that you are outside the legislation. It is vital at this stage to provide them with strong, accurate evidence that proves you are not caught by IR35.

None of the above says a checked contract is a golden bullet but all emphasise the need for a good quality first response showing proper diligence.

If this can happen, my question is this: Just what do you think a QDOS/IPSE review of a single contract in today’s world really assures you of? While the world of IR35 is such a mess, pinning all your hopes to that is an utter misnomer, a fallacy, a joke.

No one is saying anything about pinning all your hope on it or assuring anything at all. It's all about mounting evidence to be out so that's just a stupid comment.

So there is all the evidence it's a good thing. Where is yours that it's irrelevant?

[simes]

And, since His Northern-ness actually quotes Batcher, having just today been in conversation with the same Batcher about his experiences, after his ordeal, he says, and I quote;

"....and since then I haven't bothered to get contracts reviewed. I know enough when reading the contracts now if there are bad bits that need changed and also that working practises are key."

All of which, even Without Batcher's experiences, pretty much vindicates everything I've said.

[northernladuk]

And, since His Northern-ness actually quotes Batcher, having just today been in conversation with the same Batcher about his experiences, after his ordeal, he says, and I quote;

"....and since then I haven't bothered to get contracts reviewed. I know enough when reading the contracts now if there are bad bits that need changed and also that working practises are key."

All of which, even Without Batcher's experiences, pretty much vindicates everything I've said.

Not really. He says SINCE THEN. He probably knows more about investigations than most experts because he's been through it so he is perfectly placed to know exactly what he needs to put in and what needs checking. We don't so need the experts to do it.

Would he recommend going in to his situation with no check of the contract? Would he suggest that if you aren't an IR35 expert you get your contract checked? I don't think so.

I'd like to see a comment from someone like Seb or other tax specialist outlining how many investigations get shut early because the right documentation was submitted and how many of them had the potential to go further with out it.

But you rest happy you've got a misquoted statement from one person.....

[Hobosapien]

If HMRC's notice of investigation into IR35 letter asks for evidence to support the view that the contract is outside IR35, and they use that evidence as part of their decision making on whether to continue with the investigation or not, then from April 2020 all that needs doing is the client gets their contract templates reviewed and deemed outside IR35 and pays the investigation insurance* to back it up, ensures that any agency in the chain also uses a comparable template, and we can all keep calm and carry on.

*HMRC want to move the onus onto the client so it makes sense the client takes out the investigation insurance to ensure everyone in the chain is protected.

Sorted.

[WordIsBond]

All of which, even Without Batcher's experiences, pretty much vindicates everything I've said.

It would if you can honestly say as he did, 'I know enough.'

Which, TBH, having read your comments on these boards for a while, I doubt.

Full disclosure: I rarely get a contract reviewed for IR35 anymore. But I'm running multiple contracts concurrently with my own staff, I'm never under SDC (I tell clients what to do, not the other way), and I know enough now to avoid really stupid things in the contract. So I don't actually disagree in principle with what you are arguing here.