IR35 Investigation

**VectraMan** · 15 March 2007, 11:14

I remember somebody saying they were recently (and weren't in the PCG either).

We keep hearing how they look at how you actually work, so do they go and interview the managers and permies you work with? I can't imagine the client will be very happy about that, and even if they are friendly may not understand the issues and say the wrong thing.

And as you say, what if was five years ago? What if all the people you worked with have left?

**ZZZZ Snoozer** · 15 March 2007, 11:30

Originally posted by Bluebird

Serious question, has anyone on here gone through a HMRC investigation ?
Or is it all a bit of scaremongering ?

Over the last 6 years I've had 5 contacts [ some of which have been with consultancies which are no longer on the client site ].

How can any investiagtion judge whether I was inside or outside of IR35 that long ago ?

Was investigated in 2003 for contracts in 2000 & 2001. It was 2006 before the IR gave up the struggle.

The IR contacted both of the clients from 2000/01, one refused to cooperate, at the other a grunter in the clients' HR dept. agreed with the IR on most of the 100 or so questions asked (even though their answers were largely bollocks).

Only when the IR accepted that the client HR testimony wouldn't be available for any hearing at the Commissioners did they finally give up.

In summary, a victory for my business, which didn't really feel like a win. Thankfully I had taken out insurance PCG/Qdos which made it bearable and helped greatly.

**minsky1** · 15 March 2007, 11:53

Yes....... had an investigation in 2002, although HMRC concluded I was not subject to the regulation in the end.

Started off as a compliance review of accounts. Ended up with an investigation.

Ultimately, they found some non compliant issues, and ended paying over about 2k to balance matters, but no IR35 issues found.

Worked out quite well in the long term, as I now employ 2 engineers and have an additional 2 subcontractors coming in for a day a week .....

If they had pulled me on IR35, I wouldnt have bothered.

**Lockhouse** · 15 March 2007, 13:12

Originally posted by Bluebird

Serious question, has anyone on here gone through a HMRC investigation ?
Or is it all a bit of scaremongering ?

Over the last 6 years I've had 5 contacts [ some of which have been with consultancies which are no longer on the client site ].

How can any investiagtion judge whether I was inside or outside of IR35 that long ago ?

I was investigated for 5 contracts over a period of 4 years - more contracts became part of the investigation than originally intended as the investigation went on for so long. If the IR can't find someone that knew you at the client they will go to HR or the consultancy itself. All were finally judged outside but it became very fractous and stressful in the end. I should have gone after the IR for the way my case was dealt with but after 4 years I just wanted to get on with my life.

**kingshuk** · 15 March 2007, 13:59

Who is liable if IR succeeds in proving that one or more contracts were inside IR35?

Is it the Ltd company
OR
Is it the owner(s) personally?
OR
Both?

If it is the Ltd company and the company does not have the funds to pay IR what happens then? Do they go after the personal assets of the director

Has anyone ever experienced this?
Will he step forward please? :-)

**AZZIK** · 15 March 2007, 14:11

Hi Lockhouse

Did you work at clients sites etc? As I work for pharma companies as a database designer but have to carry the work out at the clients site and get paid on a hourly rate on the basis I work 36.5 hours a week. I am worried about IR35. I am going to set my own ltd so thinking of going with PCG to get the insurance from them.

**jh0711** · 15 March 2007, 14:16

hey azzik

if you time on site is dictated to be the end client you will probably be inside IR35 - in fact loads of agency contracts are inside IR35 for the more standard (helpdesk, 1st/2nd line support etc) as these roles do require you to be on site at a certain time and work a certain shift pattern - also breaks are controlled and in some case call figures etc are monitored....

probably

**Bluebird** · 15 March 2007, 14:24

I get the gist that the more Consultancy / Delivery based the role is the better chance you are to be outside IR35.

If you are a consultant then the end client is paying for your advice and knowledge.

If you are delivery based [ i.e. code / project ] then your contract should have a "schedule" that dictates the deliverables required and forms part of the contract.

As you say any help-desk roles or similar where you work alongside permanent staff are really inside IR35.

**minsky1** · 15 March 2007, 14:24

In the first instance the company will be liable.

Should that become insolvent, HMRC (& the insolvency service) will come after you personally.

This never used to be the case for low value debts, but it is now. Also, if your company registered address is your home address this can complicate things vastly....................

IR35 Investigation