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IR35 Retrospective Tax Claims

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    #11
    Originally posted by JohntheBike View Post
    well, if the loan charge fiasco is anything to go by, then there will be retro taxation. For those who have been at a client for some time on the same contract, like me, this could clearly be a major issue. However, I'm not making any plans as yet, mainly because there are too many variables in my situation where the retro tax issue might not occur.
    There is no retrospection proposed. When you talk about “retrospection” as any application of the tax law to historical cases, in keeping with the tax law *at the time*, then the term loses all meaning. It reveals a noddy understanding of tax. Retrospection is about back-porting new laws, not enforcing old ones.

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      #12
      Originally posted by northernladuk View Post
      No one has been caught by retro taxation to date so I wouldn't be making it a decision point in whether you retire or not.

      It's an interesting point that you talk about admitting your gig is inside yet not once have you mentioned leaving the client and getting a gig elsewhere. This smacks of permie-tractor to me for a number of reasons so maybe the inside determination isn't as far wrong as you think?
      Thanks for the replies

      It's not me admitting the contract is inside, I don't think it is and have evidence to support, but the client already making noises about having contractors go agent PAYE raises the question 'does this look like they were always inside ?' to the HMRC

      Yes I could go to another gig but I have a specialist skill set, that is in demand here but is rarely needed elsewhere, so would have to change to another arm of engineering, which is an option, but even if I did that, one of my other questions was would the HMRC look at all LTD Co the client has used (say in the last 12 months) even those that have stopped doing business with the client or just the ones that swap to PAYE through the agent ?

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        #13
        Originally posted by jk3838 View Post
        would the HMRC look at all LTD Co the client has used (say in the last 12 months) even those that have stopped doing business with the client or just the ones that swap to PAYE through the agent ?
        No-one outside HMRC can answer that. And probably no-one inside HMRC knows anyway.

        Why not get the client to take QDOS insurance?

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          #14
          Originally posted by jk3838 View Post
          would the HMRC look at all LTD Co the client has used (say in the last 12 months) even those that have stopped doing business with the client
          They can look at whatever the hell they want, subject to legislation. If an investigation is opened into YourCo, they will want to look at all of YourCo’s contracts. In many cases, they won’t have a specific contract in mind (e.g., when an investigation is prompted by a late filing or some other mistake that you’ve made).

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            #15
            Originally posted by northernladuk View Post
            PAYE through a different agent. Why would you think that makes a difference? Would that even be possible if it did?
            Not sure, hence the question to others who know far more than I

            To explain further, I was asking would it be better to have a different agent for those rolling over to PAYE than the agent that was supplying the guy through a ltd co ? If the same agent before and after, same guy before and after, would that look more like same role before and after than same guy but different agent to break one string of the connectivity ? Again just after people's opinion ?

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              #16
              Originally posted by jamesbrown View Post
              There is no retrospection proposed. When you talk about “retrospection” as any application of the tax law to historical cases, in keeping with the tax law *at the time*, then the term loses all meaning. It reveals a noddy understanding of tax. Retrospection is about back-porting new laws, not enforcing old ones.
              This.. and the comparison with loan charge is apples and pears. It's a completely different beast. 90% take home is clearly abusive and just those three words warrants investigation. In our situation they have to prove we were inside back in the day by the old rules, something they've not been very good at doing to date so anyone that's carried out their due diligence have a strong case.

              If you are bum on seat noddy with 3, 4 and more years at your client then yes you should be worried but you should be worried now, not just past 2020. You're as likely to be investigated and be in trouble now as you are in a years time. I've no doubt we'll see a load of these people posting a month or less before it hits as they've just woken up and noticed how much trouble they are in. We saw it when the public sector hit so no doubt it will be the same in 2020.
              'CUK forum personality of 2011 - Winner - Yes really!!!!

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                #17
                Originally posted by northernladuk View Post
                What you could do is try work with the agent and, if you are close enough, with the client to try and make them aware of the implications of just moving everyone inside. For a start blanket approaches are illegal, many will leave, to stop them leaving they'll have to put the rates up and so on. Maybe that will give them enough reason to look in to it properly.

                If you give Seb Marley, or anyone at QDOS, a call and ask them for their service offering to help clients with determinations. If a thsird part professional helps them with their determinations maybe they will be happier to consider at least some people outside.
                Agent wants to set up a working group with a few contractors, the agent and the client

                So if I got involved, could put forward your suggestion

                Agent did say they were taking professional advice so may well be QDOS anyway, or may well be a 'stay calm and carry on' appeasement

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                  #18
                  Originally posted by jk3838 View Post
                  Thanks for the replies

                  It's not me admitting the contract is inside, I don't think it is and have evidence to support, but the client already making noises about having contractors go agent PAYE raises the question 'does this look like they were always inside ?' to the HMRC

                  Yes I could go to another gig but I have a specialist skill set, that is in demand here but is rarely needed elsewhere,
                  Ok it's more complicated than the few sentences you post here and I am being overly pedantic but that sounds like the definition of a permie role doesn't it? If it's in demand at only one client then shouldn't they have a permie in? Devil is in the details and you do mention an employee which is a massive plus for you. Just pointing out some of the things you are taking for granted don't sound completely right to an impartial party.

                  so would have to change to another arm of engineering, which is an option, but even if I did that, one of my other questions was would the HMRC look at all LTD Co the client has used (say in the last 12 months) even those that have stopped doing business with the client or just the ones that swap to PAYE through the agent ?
                  I would imagine they would chase any contract that is outside but they believe it is inside like they do now. The ones that swap to PAYE just give them a much easier decision on which ones to pick on I guess. I do think they would look at a single engagement rather than just trawling all your contracts though. IR35 is applied on a contract by contract basis. One can be inside, the next outside, the next inside. They won't take multiple contracts/clients to task, just one they believe has been incorrectly accounted for.
                  'CUK forum personality of 2011 - Winner - Yes really!!!!

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                    #19
                    Originally posted by jk3838 View Post
                    Not sure, hence the question to others who know far more than I

                    To explain further, I was asking would it be better to have a different agent for those rolling over to PAYE than the agent that was supplying the guy through a ltd co ? If the same agent before and after, same guy before and after, would that look more like same role before and after than same guy but different agent to break one string of the connectivity ? Again just after people's opinion ?
                    You wouldn't go to another agent for PAYE, you go umbrella. Agents are offering PAYE as a service to their main working which is supplying workers. It's unlikely they'll run payroll for someone they aren't supplying.

                    Who pays you is irrelevant. You need to stop thinking like that. It's your contract and your engagement with the client they are looking at e.g. working practices and the like. Who introduced you is irrelevant.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

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                      #20
                      Originally posted by jamesbrown View Post
                      First, if you move to PAYE employment or to operating inside IR35 from being outside and there is no change in your working practices, then there must surely be a risk, yes. Second, if you’re moving to PAYE employment, there must be a change in your contract, as a minimum, and potentially your working practices too. Again, if there isn’t a change in working practices, the risk remains. Third, HMRC has stated publicly that their focus will be on enforcement of the new rules, rather than pursuit of historical cases, but I wouldn’t believe them. Fourth, even if they do use a change in status as a marker to dig deeper, it sounds like you have solid evidence of your current position.

                      In summary, there must be a risk, yes. If you stay there, you should seek to document how the working practices change as the status changes, but you also need to weigh whether the changes are meaningful and the headache is worthwhile (hint: they probably aren’t and it probably isn’t). Either way, it is premature to decide anything before you have a clear line from the client (and until the draft legislation is published).
                      Thanks for your reply, appreciated.

                      Yes I appreciate nothing is published yet and this is just 'what I think is going to come and how they will deal with it

                      I guess I'm trying to understand the situation and risk, based on the above being what does actually happen, and decide what to do / plan for it, as much in advance as I can

                      You would not believe how disinterested the contractors here are about this (or may be you would) but according to the agent only about 15 out of a few hundred are even taking about it with them
                      Last edited by jk3838; 26 June 2019, 09:44.

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