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Cost of a losing an IR35 case?

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    #31
    Originally posted by northernladuk View Post
    Excellent find!! 9/10. Dropped one for not providing the links for us but nailed it.

    IR35 and Controlling Persons - Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists and Personal Liability - can HMRC proceed against an individual? - Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists
    Not in the mood to read/digest all of that yet!

    First question that springs to mind is
    ER NI = a company liabiility
    Income Tax = a personal liability
    EE NI = a personal liability

    So why is the limited company responsible for the whole bill instead of just the missing ER NI part? (and the rest being due from the individual)
    Last edited by PTP; 18 February 2020, 11:41.

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      #32
      Originally posted by PTP View Post
      Not in the mood to read/digest all of that yet!

      First question that springs to mind is
      ER NI = a company liabiility
      Income Tax = a personal liability
      EE NI = a personal liability

      So why is the limited company responsible for the whole bill instead of just the missing ER NI part? (and the rest being due from the individual)
      Because the correct operation of PAYE is the responsibility of the company and the liability rests there too, unless the bar is cross w/r to negligence.

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        #33
        Looking at those figures from Whitfield it seems HMRC would have a lot of incentive to go after retrospective Outside / inside ir35 cases.

        Although they’ve said they won’t chase retrospectively the business case for them looks too tantalising not too and I’m sure they would consider this.

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          #34
          Originally posted by rambaugh View Post
          Looking at those figures from Whitfield it seems HMRC would have a lot of incentive to go after retrospective Outside / inside ir35 cases.

          Although they’ve said they won’t chase retrospectively the business case for them looks too tantalising not too and I’m sure they would consider this.
          They said they won't do targeted retrospective investigations. Their current scattergun approach is still on the cards...

          Comment


            #35
            Originally posted by ladymuck View Post
            They said they won't do targeted retrospective investigations. Their current scattergun approach is still on the cards...
            They said they wouldn't do them "automatically". AFAIK, they made the same promise to the public sector in 2017, but the reality was seemingly different from what I can gather.

            Also, it might not feel as though there's much practical difference (i.e., insert scare quotes around targeted) when they start sending nudge letters to large clients that subsequently lead to compliance reviews. But who knows. I freely admit that I'm a pessimist w/r to HMRC guidance.

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              #36
              Originally posted by northernladuk View Post
              Excellent find!! 9/10. Dropped one for not providing the links for us but nailed it.

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

              Not quite relevant to this thread but they have a nicely laid out set of figures for tax in the different pay models. Will be very useful for people going inside who are struggling with calculators.

              Tax liability example for a contractor/PSC - Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists
              To be fair, this is now the most factually correct post on this thread so far. But I had a nice run going there for a while.

              Comment


                #37
                Originally posted by northernladuk View Post
                Excellent find!! 9/10. Dropped one for not providing the links for us but nailed it.

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

                Not quite relevant to this thread but they have a nicely laid out set of figures for tax in the different pay models. Will be very useful for people going inside who are struggling with calculators.

                Tax liability example for a contractor/PSC - Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists
                This has helped me a lot to get to a ball park figure of what I might need to put aside for rainy days :-)

                Only thing missing for me now is to find an excel calculator that allows one to punch in, dividend drawn and exact turn over!

                Comment


                  #38
                  Originally posted by jamesbrown View Post
                  They said they wouldn't do them "automatically". AFAIK, they made the same promise to the public sector in 2017, but the reality was seemingly different from what I can gather.
                  Is there any documented evidence of HMRC ever going after *any* contractors who went from self-determined outside to umbrella at a public sector org?

                  One agency told me that has never happened - not that it was rare, but had never happened. I doubted that but couldn't prove otherwise.

                  I've seen quite a few people post here saying it had happened, and every time I see it, I ask the same question, but I've not seen any references to any such cases. Of course, that doesn't mean it has not happened.

                  Comment


                    #39
                    Originally posted by Paralytic View Post
                    Is there any documented evidence of HMRC ever going after *any* contractors who went from self-determined outside to umbrella at a public sector org?

                    One agency told me that has never happened - not that it was rare, but had never happened. I doubted that but couldn't prove otherwise.

                    I've seen quite a few people post here saying it had happened, and every time I see it, I ask the same question, but I've not seen any references to any such cases. Of course, that doesn't mean it has not happened.
                    No, I don't have anything more than hearsay from people that would know, and those instances were from outside --> inside, as I understand it (not to umbrella). It's difficult to get documented evidence until years later and even then there is taxpayer confidentiality.

                    Comment


                      #40
                      Originally posted by jamesbrown View Post
                      No, I don't have anything more than hearsay from people that would know, and those instances were from outside --> inside, as I understand it (not to umbrella). It's difficult to get documented evidence until years later and even then there is taxpayer confidentiality.
                      It's also a timing thing - HMRC love to use the 4 year window they have to do such things and that 4 year window for cases has a while left to go.

                      If HMRC was following past behaviour I would expect letters to be sent at Easter for those caught by the public sector changes..
                      merely at clientco for the entertainment

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