IR35 letters going out to GlaxoSmithKline contractors

[ComplianceLady]

Yep, they will absolutely pick the 20th December for a mass mailout.

Yup, back in my Civil Service compliance days we had a massive push in the week prior to Christmas but the internal messaging was it was because we couldn't postmark anything from 23rd December until 2nd Jan.

[NotReallyHere]

Will HMRC pay back the Corp. tax to the contractor and VAT to the client if the contractor is deemed to actually have been inside IR35?

If not, would that be fraud by HMRC?

In some cases, HMRC may actually be worse off

[BrilloPad]

Will HMRC pay back the Corp. tax to the contractor and VAT to the client if the contractor is deemed to actually have been inside IR35?

If not, would that be fraud by HMRC?

In some cases, HMRC may actually be worse off

If only that were true!

[Hobosapien]

Will HMRC pay back the Corp. tax to the contractor and VAT to the client if the contractor is deemed to actually have been inside IR35?

If not, would that be fraud by HMRC?

In some cases, HMRC may actually be worse off

Corrective accounting will sort it out so any payments already made will be factored into what is still owed.

[Casall]

External GSK IT consultant with a £1.15 million house in Ascot in news today

An external IT Consultant who has been working at GSK for 20 years and lives in a £1.15million five-bed detached house in Ascot has made the news today:

'Boozed-up' IT consultant 'racially abused British Airways stewardess' court hears | Daily Mail Online

Perhaps all GSK IT Consultants should lie low and behave themselves in order to avoid any unwelcome publicity in case HMRC happen to read Daily Mail and other news media.

[northernladuk]

KUATB please.

[Liberator]

Corrective accounting will sort it out so any payments already made will be factored into what is still owed.

Is this true? Would amounts paid in Corporation Tax be deducted from any Tax bill for someone who HMRC had found had incorrectly assigned themselves as being outside IR35?

[jamesbrown]

Is this true? Would amounts paid in Corporation Tax be deducted from any Tax bill for someone who HMRC had found had incorrectly assigned themselves as being outside IR35?

No, not necessarily. The time limits for IR35 investigations are completely different than those for tax refunds. A settlement would be needed.

[Hobosapien]

No, not necessarily. The time limits for IR35 investigations are completely different than those for tax refunds. A settlement would be needed.

I'm sure it's been covered in more detail previously on here for those nervous about it, but in the context of the GSK situation where HMRC are currently only targeting recent or upcoming tax years then in simple terms HMRC will say x is due and y has been received so z is outstanding to settle the bill for that tax year. There should be no double taxation in play on the same amount received from a client if the situation is handled correctly.

So anyone worried about how to handle this, seek advice from an accountant who should be able to summarise the actual process and figures involved to satisfy HMRC, if you're looking at being caught inside IR35 and need to pay the tax HMRC is now expecting. First make sure you are in fact caught inside IR35 or have sufficient evidence to argue your case against it. No need to pay more tax than is due once the situation is clear.

[jamesbrown]

I'm sure it's been covered in more detail previously on here for those nervous about it, but in the context of the GSK situation where HMRC are currently only targeting recent or upcoming tax years then in simple terms HMRC will say x is due and y has been received so z is outstanding to settle the bill for that tax year. There should be no double taxation in play on the same amount received from a client if the situation is handled correctly.

So anyone worried about how to handle this, seek advice from an accountant who should be able to summarise the actual process and figures involved to satisfy HMRC, if you're looking at being caught inside IR35 and need to pay the tax HMRC is now expecting. First make sure you are in fact caught inside IR35 or have sufficient evidence to argue your case against it. No need to pay more tax than is due once the situation is clear.

There are no formal investigations yet. By all means, let the professionals handle it. I'm simply pointing out that it is wrong to assume that CT will be set off against the amounts owed. Look no further than the FTT decision in the Ackroyd case for the hardball that HMRC will play on this:

The determinations under appeal cover tax years 2008–09 to 2012–13. The decision notices under appeal cover tax years 2006–07 to 2012–13. Together they total some £419,151 and were issued between March 2013 and October 2014. The extent to which there should be a set off of corporation tax paid by CAM Ltd and tax paid on dividends from CAM Ltd to Ms Ackroyd has not been agreed. Ms Ackroyd contends that the liability to tax and national insurance even if the appeal is not successful is approximately £207,000. At the invitation of the parties this decision will deal with the appeals in principle. The question of quantum may be referred back to the tribunal if necessary.

Christa Ackroyd Media Ltd [2018] TC 06334 | Croner-i Tax and Accounting