IR35 investigations in 2020/21

[CompoundOverload]

That would very much depend on what the client said to HMRC.

when would they even be in communication with HM in respect of this?

So they put 50% of their contractor workforce inside (hypothetically), you think they will go running straight to HM grassing everyone up ?

[BlueSharp]

when would they even be in communication with HM in respect of this?

So they put 50% of their contractor workforce inside (hypothetically), you think they will go running straight to HM grassing everyone up ?

HMRC would communicate with the client if an enquiry was opened to ascertain the facts around working practices once they open an enquiry. They don't need the client to grass you up for HMRC to open an enquiry.

[northernladuk]

Strikes me that it isn't going to be hard to juggle this to reduce the risk, particularly in London and I did suggest a new part of the forum to help.

If gnarly is a PM and he's leaving Lloyds (example) and tarby is a PM leaving Barclays. Both are OK to go PAYE but want to reduce the risk of investigation why dont they just swap jobs?

500 people can leave one org and across the road the same happens at another client. Just switchero and you are back in work, PAYE as expected but with a much reduced risk of investigation.

Inconcenient for the clients? Good. Serves em f**king right.

This isnt the time to be getting all precious about your current contract.

Edit : forgot to add. If they sub for each other then they've completely removed the risk altogether.

[BlueSharp]

Strikes me that it isn't going to be hard to juggle this to reduce the risk, particularly in London and I did suggest a new part of the forum to help.

If gnarly is a PM and he's leaving Lloyds (example) and tarby is a PM leaving Barclays. Both are OK to go PAYE but want to reduce the risk of investigation why dont they just swap jobs?

500 people can leave one org and across the road the same happens at another client. Just switchero and you are back in work, PAYE as expected but with a much reduced risk of investigation.

This isnt the time to be getting all precious about your current contract.

Unless you're a permie-tractor who is part and parcel with the company.... People turned a blind eye to the risks with LC schemes, I think the vast majority are just going to go outside to inside at the same client and ignore the risks as well. More low hanging fruit for HMRC to be kept busy with and me further down the queue.

[northernladuk]

I'm under no illusions about that and I hope they will get away with it. I really do.

But I wouldnt be one of them.

[CompoundOverload]

HMRC would communicate with the client if an enquiry was opened to ascertain the facts around working practices once they open an enquiry. They don't need the client to grass you up for HMRC to open an enquiry.

Yes agreed IF an enquiry was opened.

I think HMRC are going to initially go after those who were acting outside, determined inside by the client but continued post April 2020.

But HMRC wouldn't be doing targeted campaigns retrospectively.... would they

[BlueSharp]

I'm under no illusions about that.

People would never go contracting at an old employer (Friday-Monday switch) but are seriously considering staying on at existing clients. Mental.

[northernladuk]

Yes agreed IF an enquiry was opened.

I think HMRC are going to initially go after those who were acting outside, determined inside by the client but continued post April 2020.

But HMRC wouldn't be doing targeted campaigns retrospectively.... would they

The keyword there is initially....

And I think I already posted a link questioning HMRCs comment about not going retrospectively.

https://www.contractoruk.com/forums/...2020-21-a.html

[WordIsBond]

That's my worry. If you leave based on the inside determination you look guilty and could still get a pull.

That's a risk but IMO not a high one. You can argue it in the tax tribunal that the client was just risk averse, but if that was their view you weren't going to provide your services to them any longer. If they want a disguised permie they can hire one but you aren't one.

And as noted above, there are likely other higher priority targets for HMRC to chase.

[WordIsBond]

We are encouraging clients to consult - not determine. That gives them the chance to give contractors a heads up without exposing them to risk (if the contractor leaves).

That would be the intelligent thing to do. There is no reason for them to make determinations on any contract that ends before April. Contracts that go past April will need determinations probably in February, early if they are renewals and the contractor won't renew without an outside determination.

Final point is that I only see it as a risk if you get an inside determination and stay. I can't see HMRC gathering information on people who were outside, told they would be inside and then left - there'll be too many other, better, targets.

My expectation is that you'll have a phishing approach - client determines everyone inside, letters sent to all contractors who now work inside saying 'we believe you got status wrong', some offer evidence, those that don't are given tax bills. Just taking that approach will net HMRC a fair amount. The difference in tax take in Year 1 of the reform v Year 2 is coming from historical cases in my view so I think it's wise to be wary, though I think it will be prioritised like this:

Pre 2020 Post 2020
Outside -> Inside, same client
Outside -> Outside, targetted sectors
Outside -> policy PAYE only, same client
Outside -> Outside, previous outside is now inside only client
Everyone else

This seems a reasonable guess. Although the one you have second could be their top priority. They will certainly want to go after any client which they deem is making too many outside determinations, if they can take a couple high profile scalps they'll be scaring everyone into blanket inside determinations.