IR35 risk of going permie in current contract?

[northernladuk]

I’ve never heard of HMRC going after contractors who have converted to permie, and this makes absolutely no sense to me. For example if I went permie, then my working practices would be totally different. For example I would have to conduct training, I would have to have reviews with a manager, I wouldn’t be forced to take contractor breaks at Xmas, I wouldn’t have to pay for my own meals if asked to go, I would be given a company phone and not use my own, and so on.

The Xmas breaks was always a biggy for me. How can HMRC claim you are a disguised employee if the company forces all contractors take 2-4 weeks at Xmas? Clearly a massive positive in an IR35 investigation.

You say you've never heard of a case. I'm not getting the impression you follow IR35 closely. Am I wrong here?

Non of those are 'biggies' really. They don't touch the three major pillars. They might tip a split case but aren't case winning. The company phone one is particularly minor. Search client equipment and you'll see why.

Permies can also be sent home at certain periods. It's called a furlough so yes it's a pointer it's still no silver bullet.

[northernladuk]

I swear reading posts here is the same as googling your symptoms when ill.. basically you’re a goner.

I don't really know why you come on here. You are kind of in denial of everything you are told. Why bother posting if you know better?

[BABABlackSheep]

Surely a client dictating that you can't work certain dates would count as a sign of D&C?

HMRC can’t have it both ways. A company wide dictate that contractors have to take specific time away is about as clear an indicator that they aren’t treating contractors as permanent employees as you get. To then say that’s a sign of D&C, well, I’ll take my chances on that one.

[BABABlackSheep]

I don't really know why you come on here. You are kind of in denial of everything you are told. Why bother posting if you know better?

I wasn’t in denial. It was meant to be a joke. I came on here for information, but I’m now worried I need to close my business ASAP as a lot of people are doom and gloom. I honestly didn’t realise things were so bad. As far as I’m aware the HMRC almost never win IR35 investigations?

[northernladuk]

I wasn’t in denial. It was meant to be a joke. I came on here for information, but I’m now worried I need to close my business ASAP as a lot of people are doom and gloom. I honestly didn’t realise things were so bad. As far as I’m aware the HMRC almost never win IR35 investigations?

That could be true but we don't know how many are settled before court. They've also stepped up their game with a win against Christa Ackroyd recently, a raft of letters going out to Glaxo contractors and rumors of letters going to people that were outside in the PS and now inside it's not the time to take anything too lightly.
The new changes could (in their eyes) give them open season on contractors depending on their circumstances. You could see why, if a client deems a contractor outside, then are given the tools to properly asses the position and they move inside, HMRC things they've got easy targets.

It's also the investigation you need to avoid. One poster on here went though one and it took 2 years before it got closed. Not pleasant at all.

I don't think they are 'that' bad but definitely a time for smart thinking, understanding what is going on in detail and taking the relevant actions. Dismissing everything you are told and taking your own chances isn't the way to do it IMO.

All that said, have a look at this thread and the a particular comment from one poster under Dave Chaplins quesiton...

Myke Parrott on LinkedIn: "IR35 is coming!!!
"

Then IR35 does not currently apply and would not apply to that contract from last year. HMRC has also said, I believe, that it will not review contracts held before IR35 comes into effect, so either way it isn't an issue.

If you can stay one step ahead of people like this then you are probably OK. Won't help if you get targeted but having an understanding of the situation first puts you way ahead of many contractors.

[BABABlackSheep]

Good advice. Thanks.

[BlueSharp]

I swear reading posts here is the same as googling your symptoms when ill.. basically you’re a goner.

IR35 is a risk to any contractor business to deny it is to bury your head in the sand to a very real risk. HMRC losses a lot of cases which is why many people dismiss this risk or at the very least manage it so they can win a court case. IMO if a contractor is determined to be inside post April 2020 and continues to operate as they did before they may as well paint a target on their back for an investigation.

Is it such a big jump to imagine APN's going out to contractors where they have switched for the same client? Could HMRC do this if they win their first tribunal using the status determination and no substantial changes to working practices argument? I'm not a tax expert, but this seems like a reasonable possible action after following the loan charge thread.

Anyway, it's up to you to manage risk for your business even if that is dismissing risk because you don't want to deal with it.

[BillHicksRIP]

On a similar vein, I'm 4 years into an outside IR35 which will run to the end of this year, probably. The client doesn't have the people to run what they need done so can see them asking me back in 2020. On the basis that a new contract will likely be inside-IR35, I'm wondering what I can do here to mitigate HMRC trying to prove the current contract was inside all along (it's not, to the best of my knowledge). Taking a long break between contracts is all I can come up with.

[Paralytic]

On a similar vein, I'm 4 years into an outside IR35 which will run to the end of this year, probably. The client doesn't have the people to run what they need done so can see them asking me back in 2020. On the basis that a new contract will likely be inside-IR35, I'm wondering what I can do here to mitigate HMRC trying to prove the current contract was inside all along (it's not, to the best of my knowledge). Taking a long break between contracts is all I can come up with.

If you can articulate what will be different about your working practices when the new contract starts, then people here might be able to give their thoughts.

If you can't, then, er, well, reassess the bit I've emboldened above...

[northernladuk]

On a similar vein, I'm 4 years into an outside IR35 which will run to the end of this year, probably. The client doesn't have the people to run what they need done so can see them asking me back in 2020. On the basis that a new contract will likely be inside-IR35, I'm wondering what I can do here to mitigate HMRC trying to prove the current contract was inside all along (it's not, to the best of my knowledge). Taking a long break between contracts is all I can come up with.

Firstly you don't go back. 4 years when you've said the client doesn't have the people and done nothing about it in that time period is a poor position to be in. If you are so desperate to take it then you're already acting like a disguised permie.

Mitigating a gig like that? Insurances and a lot of praying is all I can think of.

I know the devil in the details but on the face of that post you've potentially got a problem. If you are still there after April you've got a nightmare.