IR35 Retrospective Tax Claims

[mudskipper]

To answer the OP

If I were in a contract that I had believed to be 'outside' and my client declared that I was 'inside' I would be very concerned that, should I ever have to defend my outside decision, I was starting on the back foot. The fact that you've been in the contract a considerable time, means the liabilities are not insignificant. Whether HMRC will specifically target contractors in that situation is anyone's guess. If you haven't already got tax investigation insurance, then make sure you get it, and save any 'evidence' of your outside status.

You say CEST gives you an outside decision - get your client to agree with your answers, put their sig on it, and you should be good. But if that is the case, then it's bizarre to declare you inside - the client is obliged to take 'due care' with their determinations. Ask them how they came to that decision.

[jamesbrown]

You say CEST gives you an outside decision - get your client to agree with your answers, put their sig on it, and you should be good.

Good suggestion. Regardless of the merits or otherwise of CEST, if you get an outside determination and have all parties sign that, you create a high-bar for HMRC, based on their public pronouncements. If they start pursuing such cases routinely, they are somewhat shooting themselves in the foot.

[northernladuk]

Good suggestion. Regardless of the merits or otherwise of CEST, if you get an outside determination and have all parties sign that, you create a high-bar for HMRC, based on their public pronouncements. If they start pursuing such cases routinely, they are somewhat shooting themselves in the foot.

That could be the way out yes but still leaves gaping holes. He says he's done his own CEST. Far too easy to put in what you think it should be to look like it's outside. The client would have to do it and if they are going to go inside it's highly likely they won't agree with the OPs assessment of the situation.

I haven't seen CEST for a long time but this situation where he's been there many years and only has skills sellable to his client doesn't look good. He's bound to have problems with MoO and part and parcel. Time isn't directly a factor for IR35 but its a serious risk. Very hard to stay outside the longer you are there. The employee helps massively but don't know how the weighting works as to whether that will trump the other pillars he's missing.

The posts above are right about getting an outside determination and in theory they should honour it regardless of CEST being uselss but, dunno, not sure this situation is as black and white as that.

Guess it's all down to how his client would fill it in to start off with.

[jamesbrown]

That could be the way out yes but still leaves gaping holes. He says he's done his own CEST. Far too easy to put in what you think it should be to look like it's outside. The client would have to do it and if they are going to go inside it's highly likely they won't agree with the OPs assessment of the situation.

I haven't seen CEST for a long time but this situation where he's been there many years and only has skills sellable to his client doesn't look good. He's bound to have problems with MoO and part and parcel. Time isn't directly a factor for IR35 but its a serious risk. Very hard to stay outside the longer you are there. The employee helps massively but don't know how the weighting works as to whether that will trump the other pillars he's missing.

The posts above are right about getting an outside determination and in theory they should honour it regardless of CEST being uselss but, dunno, not sure this situation is as black and white as that.

Guess it's all down to how his client would fill it in to start off with.

This is IR35. When was anything ever "black and white"

Still, in the context of there being no silver bullets, it's another useful piece of evidence (if client and contractor agree), especially because it's HMRC-centric and weighted towards a false positive for being inside.

[jk3838]

The employee helps massively but don't know how the weighting works as to whether that will trump the other pillars he's missing.



Guess it's all down to how his client would fill it in to start off with.

What other pillars am I missing ?

Also any suggestions of valid 'evidence' also appreciated

Again, thanks for taking the time to answer on this, appreciated

[cojak]

Right, I've kept an eye on this thread but I'm now stepping in.

The OP has valiantly attempted to keep this thread on-topic by himself but with the last conspiracy theory post it's obvious that he needs help.

@jk3838 - do you have all the info you need? If you don't I will clear the dross off the thread from this point and keep it on topic.

If you have then I will close this thread.

[WordIsBond]

What other pillars am I missing ?

Also any suggestions of valid 'evidence' also appreciated

Again, thanks for taking the time to answer on this, appreciated

I don't think he got good answers on this yet.

Perhaps google "IR35 dossier site:contractoruk.com".

[WordIsBond]

Right, I've kept an eye on this thread but I'm now stepping in.

The OP has valiantly attempted to keep this thread on-topic by himself but with the last conspiracy theory post it's obvious that he needs help.

@jk3838 - do you have all the info you need? If you don't I will clear the dross off the thread from this point and keep it on topic.

If you have then I will close this thread.

Is there anything we can do beyond 'Like' and 'Thanks'? Ah, I know.

[northernladuk]

What other pillars am I missing ?

Also any suggestions of valid 'evidence' also appreciated

Again, thanks for taking the time to answer on this, appreciated

So. Bit of a ramble but hope some of it is useful. I'm no expert and we have very little detail but these are the areas I'd be concerned about from just this thread. No particular order but trying to start of with tangible points and filter down to musings.

So your pillars are Ros, MoO and D&C. The problem you have is the length of time. Although not an indicator it is very difficult to keep these up as time progresses. You want to read up on the JLJ partial case where he was outside to start but through apathy he became part and parcel and forgot to keep his diligence up. Details here.
New IR35 ruling: Partial victory for JLJ Services v HMRC

So after a long time on the gig MoO has to be a problem. You just carry on doing the work you are given. Over time they'll just expect you to do the work you are given without saying no. That is assuming another key point. You are working to a well defined statement of work. It would be easy to imagine that for that length of time you are just doing a bum on seat enduring role that should have a permie doing it for a start. Even if you fudge the paperwork to make it look like a SoW over time it's likely you'll drop that and your contract will just look like a job description. As there is no defined work it's difficult to find a line where absence of MoO could be proved.

On to D&C. Again, if you are doing an enduring role and you've been there you have to be part and parcel. It's human nature just to fall in to it and very difficult after 10 years to think of it as anything but you permanent job and they treat you like a member of staff. That means you are highly likely to be treated like the perms and are directed and controlled in the same way. Going up to you client for 10 years reminding them you are a contractor and can't/shouldn't be doing that is going to grate on them for sure.

As mentioned there is the whole part and parcel thing. Although not directly a flag it brings all sorts of risks with it.

RoS. You've mentioned an employee which is terrific defence but it's not exactly Ros. If you are so specialised, been there so long and no one out there in the market they may be reticent to allow a substitute. I don't know if courts take in to account the fact that although they may allow it, it's next to impossible to do due to lack of equally skilled resources so the clause is a sham.

The length of time is also going to be of interest due to the amount of monies involved which is also likely to cloud their judgement on the facts (HMRC I mean, not the courts).

On the face of it 10 years, just doing the same can be nothing but a permie role but that doesn't really count for much. You have to go through all the elements in detail in court but you couldn't blame HMRC for thinking they've got a good case.

How many times have you had your contracts and working practices reviewed? Insurances in place?

I don't think any comments on minor evidence like having 'Contractor' on your pass and the like helps in this situation. They only thing you really need is cold hard examples of you meeting those pillars and working practices are outside every day for those 10 years. If you haven't been thinking and acting like a contractor with a very close eye on IR35 all these times then no retrospective defence is going to be much use at this point.

I don't want to be rude to the OP but schemes he's been thinking resulting in Cojaks comments would lead me to believe the previous paragraph is the real problem. We are going to see many many posts in the coming year from people that have suddenly gotten wind of the IR35 problem and are guessing at quick fixes rather than a balance and measured approach to something they've already been doing day in day out. The ideas and schemes show a gap in knowledge that is likely to have been there from day one. Sorry.

[WordIsBond]

I don't think he got good answers on this yet.

Perhaps google "IR35 dossier site:contractoruk.com".

I keep things like

• emails stating (not asking) when I've going to be away
• emails asking 'do you think our people should do a code review of your work'?
• emails asking 'how should we best test this'?
• anything that says something (events or benefits or training) is for employees and not contractors
• emails saying how I'm going to solve a problem
• emails recommending that clients take certain actions
• evidence for each contract of how much I had someone else work on it (here's where your employee comes in)
• emails asking if I have someone available that could help with a job
• contract negotiation correspondence
• evidence of anything you spent that an employee wouldn't have spent
• evidence of a job being discussed for you to do that is not part of your contract and so either you don't do it or a new contract is agreed for it

Basically, anything that would help to indicate you A) are treated differently to employees B) are not supervised/controlled in the way employees are.