HMRC asking for Outside IR35 PSC details

[ChimpMaster]

Not sure I fully understand.

I get that if you deemed yourself outside prior to implementation. Then your clients deemed you inside then you’re ripe for the picking.

But how is a contractor deemed outside by their public sector client a sitting duck? Which seems to be the details their asking for.

I was thinking the same. Some confusion on this thread.

It's far worse that HMRC are hunting the contractors who have been deemed outside IR35 already by their clients. Really shows a nasty streak.

[BR14]

I was thinking the same. Some confusion on this thread.

It's far worse that HMRC are hunting the contractors who have been deemed outside IR35 already by their clients. Really shows a nasty streak.

not nasty, just a desperate government looking for low hanging fruit.
the big corporates are harder nuts to crack

[MrButton]

not nasty, just a desperate government looking for low hanging fruit.
the big corporates are harder nuts to crack

In what way are they low hanging fruit?

Are their clients not liable for incorrect outside determination?

[cojak]

My response was to part of the article -

Alarmingly for contractors, HMRC also asks that PSBs provide details of contractors who traded via a limited company previously, but have since entered into employment contracts or umbrella company engagements. This move has prompted concern that the taxman may pursue any named individuals for back taxes.

Sorry about that, I should have clarified a bit more.

[Hobosapien]

My response was to part of the article -
Sorry about that, I should have clarified a bit more.

Hopefully the recent CEST issues will mean HMRC can't just go after all those now deemed inside by client, especially if client used blanket determination. Some of them are bound to be found as really being outside. I wonder if they'll then get any tax overpayment back.

Even if armed with an outside determination by reputable review service for the contract prior to the PS IR35 change where clients then deemed inside, I'd be seriously considering closing the Ltd before HMRC get to looking into the particulars. Even if confident it would stand up to an investigation I wouldn't want the stress and worry of however many months it takes for HMRC to let up or end up in court.

As far as I know, evidence of an 'outside' contract review may stop any investigation in its tracks but if not then the Ltd being closed means it's very hard for HMRC to continue and will likely go after easier catches. I've not heard of HMRC forcing a company to be re-opened so IR35 investigation can continue, or forcing director to be personally liable in event of the Ltd already being closed when the investigation began.

[eek]

My response was to part of the article -
Sorry about that, I should have clarified a bit more.

Hmm I seem to remember saying that this would happen about now, 2 years ago and being shouted down for saying it...

[cojak]

Hmm I seem to remember saying that this would happen about now, 2 years ago and being shouted down for saying it...

Well I certainly didn’t shout you down - I could absolutely see it happening.

(I actually have one of your posts saved in readiness for the day after the budget and a nickname for you Cassandra... )

[WordIsBond]

2. Taking time off by informing, and not asking, your client
9. Working from a home office, also known as ‘business premises’

Shame neither has any bearing on IR35...

Wrong. Both are helpful in undermining any HMRC claim that you are under Supervision / Direction / Control. #2 is clearly contrary to the type of SDC that governs employer/employee relations.
#9 is particularly helpful if the contract states that ContractorCo determines where the work will be done.

#2 could even be argued as demonstrating a lack of MOO, since it shows the contractor is not required to accept work when offered. That's not a strong argument, obviously.

Neither of these are a silver bullet, but to say they have no bearing on IR35 is silly. Case law repeatedly says that you have to look at the whole picture of the working relationship, and these can help to paint the right kind of picture.

If you want a silver bullet, you pretty much need to do fixed-price work or exercise a right of substitution. Unless those things happen, you should be piling up everything you can to paint the right kind of picture. The two points he listed help with that, especially #2.

[WordIsBond]

But how is a contractor deemed outside by their public sector client a sitting duck? Which seems to be the details their asking for.

They aren't sitting ducks. The other part that cojak highlighted is about sitting ducks, and that was what several here were warning about all along.

But asking about those currently outside is to target the engagers. If they are deeming too many people outside, they may get a strong-armed meeting from HMRC. Also remember that the liability does not lie with the contractor in these cases. HMRC may be looking for a case they can win against engagers that hits one of them with some hefty liability to discourage all engagers from deeming people outside.

They aren't interested in chasing individual contractors, they've been doing that and losing for years. They want clients to carry the bag, that's much easier for them. That's been very clear all along.