IR35 retrospective charges IR35 retrospective charges
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  1. #1

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    Default IR35 retrospective charges

    HMRC internal guidelines to tax inspectors

    Where it is agreed that a worker who has previously been regarded as self-employed should now be treated as employed, then you will need to consider whether to pursue the employer for NICs and tax for back years. The law and practice relating to NICs and tax is different, so you will need to consider each separately.


    ESM0117 - Employment Status Manual - HMRC internal manual - GOV.UK

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    Quote Originally Posted by karupalli View Post
    HMRC internal guidelines to tax inspectors

    Where it is agreed that a worker who has previously been regarded as self-employed should now be treated as employed, then you will need to consider whether to pursue the employer for NICs and tax for back years. The law and practice relating to NICs and tax is different, so you will need to consider each separately.


    ESM0117 - Employment Status Manual - HMRC internal manual - GOV.UK
    This applies to self-employed people only. Nothing to do with Ltd. Co. contractors.

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    Quote Originally Posted by eatenrifles View Post
    This applies to self-employed people only. Nothing to do with Ltd. Co. contractors.
    Yup, and has been the case for a very long time. It’s the employer who is on the hook where somebody is falsely self-employed (it’s only ever really to the employers benefit as they avoid their legal obligations and paying NIC). It’s one of the reasons why agencies will only take on contractors through a Ltd in the first place!

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    and to be clear.
    When 'retrospective' is used in legal terms it means where the law has been changed, such that actions prior to that law that were legal, are now illegal, and can be prosecuted.
    Retrospective laws are very very rare as they breach what most civilised societies consider reasonable and fair.

    Action against somebody who broke the law historically is not retrospective.


    To that effect, HMRC chasing back taxes owed is NOT retrospective.
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