IR35 letters going out to GlaxoSmithKline contractors

[ChimpMaster]

Getting out and closing their limited company, or too late for that now?

I don't think she'd suggest it if it was too late. The clue is in why you would do this.

Is this enough to escape IR35 for your current and past contracts?

[BABABlackSheep]

I don't think she'd suggest it if it was too late. The clue is in why you would do this.

Didn’t see any mention of closing the limited company in her post? Why I asked. I presumed closure would follow as otherwise what’s the point?

[Liberator]

Didn’t see any mention of closing the limited company in her post? Why I asked. I presumed closure would follow as otherwise what’s the point?

I presumed she meant getting out of GSK before they decide to put everyone inside IR35 (which could prompt HMRC to wonder why you weren't inside before) unless you've already had a letter that is then it would be too late. At least that's what I thought she meant...

[northernladuk]

Didn’t see any mention of closing the limited company in her post? Why I asked. I presumed closure would follow as otherwise what’s the point?

Just to be out before any inside determinations hit. If you aren't there when HMRC get their next list of GSK contractors with changed determinations then you reduce your exposure to an investigation significantly. Closing might just reduce it further, but times are changing so who knows?

Is this enough to escape IR35 for your current and past contracts?

In theory it appears so as no one to date has had a company re-opened to investigate... but these are new times. If you are on HMRC's list as one of a group and you close your company it's not beyond the realms of possibility they'll just re-open if they can sniff a quick win. Who knows? It should reduce the risk in theory though.

[BABABlackSheep]

Just to be out before any inside determinations hit. If you aren't there when HMRC get their next list of GSK contractors with changed determinations then you reduce your exposure to an investigation significantly. Closing might just reduce it further, but times are changing so who knows?



In theory it appears so as no one to date has had a company re-opened to investigate... but these are new times. If you are on HMRC's list as one of a group and you close your company it's not beyond the realms of possibility they'll just re-open if they can sniff a quick win. Who knows? It should reduce the risk in theory though.

Remembering MVL takes 3 months. HMRC could theoretically not let you close it that way I believe if they felt it was for tax avoidance.

[cojak]

Getting out and closing their limited company, or too late for that now?

No, just getting out of GSK.

Whether or not they get an inside IR35 contract next is up to them, but this one is dead in the water whatever happens and I would drop it ASAP.

[jamesbrown]

Is this enough to escape IR35 for your current and past contracts?

Not if you've been negligent.

For example, imagine the scenario where you received a negative SDS about your current contract, while in contract, indicating that the contract had always been inside IR35. Imagine that you decided to "get out now" and close the company without accounting for the inside status on past payments. While there's a high bar to transfer debts from a company to an individual, I wonder whether this might make the bar.

There's an old but good article by Jessica@Whitefield Tax here:

IR35 and Personal Liability - can HMRC proceed against an individual? - Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists

[mudskipper]

Not if you've been negligent.

For example, imagine the scenario where you received a negative SDS about your current contract, while in contract, indicating that the contract had always been inside IR35. Imagine that you decided to "get out now" and close the company without accounting for the inside status on past payments. While there's a high bar to transfer debts from a company to an individual, I wonder whether this might make the bar.

There's an old but good article by Jessica@Whitefield Tax here:

IR35 and Personal Liability - can HMRC proceed against an individual? - Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists

I do vaguely recollect someone saying that it hadn't happened (i.e. the individual being pursued for IR35 after company shut) but ICBW.

As someone who should definitely know better, I didn't get my current contract reviewed (I used the standard IPSE template, but I know my schedule is probably vaguer than it should be). My main client currently hires 1 contractor (me), so I doubt I'll be top of the list. But going forward I think I'm always going to get that bit of paper saying I've done the due diligence.

[jamesbrown]

I do vaguely recollect someone saying that it hadn't happened (i.e. the individual being pursued for IR35 after company shut) but ICBW.

As someone who should definitely know better, I didn't get my current contract reviewed (I used the standard IPSE template, but I know my schedule is probably vaguer than it should be). My main client currently hires 1 contractor (me), so I doubt I'll be top of the list. But going forward I think I'm always going to get that bit of paper saying I've done the due diligence.

Yup. I doubt it has happened. Things are about to change though.

TBH, I don't always get a review. I rarely bother with fixed price work where the terms are unambiguously outside. Mostly it's worthwhile, if only as a source of proof.

For anyone left contracting post April 2020, IR35 is going to become a non-issue in many ways (i.e., for work after April 2020 at mid/large companies). The main source of worry will be threads like this, looking backwards.

[jk3838]

Just to be out before any inside determinations hit. If you aren't there when HMRC get their next list of GSK contractors with changed determinations then you reduce your exposure to an investigation significantly.

By all accounts, some who were no longer at GSK still got letters. Are they in any better position now than those who were still there when the letters came out ?