HMRC Briefing Paper - New CEST and No Historic Enquiries using SDS Data

[simes]

I do not believe that for one minute - history has shown wrt contractors that HMRC will change their position, and even introduce retrospective laws to recover money they feel is owed.

Quite right.

The 20 years' consideration to the Loan Charge vs the legally required seven-year retention of tax records is enough to shore up that statement.

Am very disappointed by the HMRC right now....!

[CompoundOverload]

I'd say this is more than in theory, and much stronger than any speculation we've heard to date.

I appreciate that a lot of people have been helpful on this board, but the whole scenario of having to quit your current contract if deemed inside post April is not true, it's a worst case scenario speculation. And now HMRC themselves are saying they won't be doing that. Normally HMRC say, we will be doing that... even if they don't.

So April 6th, I think everyone who is happy with their assignment, can simply take the pay cut if they are OK with that financially and go to an umbrella. Or gulp... perm. But HMRC will not go back for you. Unless you were part of the loan charge brigade.

What if, you leave what could potentially be deemed an inside role post April before the year is out (before a determination has been made/ communicated to you, so as to not be classified incorrectly) but you believe this role to be outside based on contract reviews etc and find a new engagement elsewhere, which is deemed outside (contracts reviewed etc).

You remain a LTD as opposed to going umbrella or gulp, Perm.... how would this sit with your interpretation of HM's statement?

[JohntheBike]

You have a point. This is more clear / less fuzzy than in the past. It would be great if one could trust them. All comes down to one's appetite to risk....

if one could trust them

anyone who believes they can, is seriously deluding themselves.

[TwoWolves]

If you can get a definitive statement from the end client that the inside determination is a policy decision and not a determination I think that could be used as defence should the revenue launch an investigation.

It could also be argued that expecting everyone to quit their clients mid-project is unrealistic. That's what the original framework suggests.

I think I'd be willing to take that as an olive branch.

[WordIsBond]

If you can get a definitive statement from the end client that the inside determination is a policy decision and not a determination I think that could be used as defence should the revenue launch an investigation.

You won't get that definitive statement, because it would be acknowledging that they are breaking the law. They can make policy decisions to not use Ltd contractors any longer, but not policy decisions that people are thrown inside IR35. They can only do that on the facts.

[mudskipper]

HMRC say a lot of things.

They said there were no plans to roll out the public sector changes to the private sector.

The temptation of 1000+ contractors who were operating outside IR35 but whose client has said they consider them to be employee-like is going to be huge.

They have done exactly this in the past - BBC is a good example.

Personally I would be very nervous if I'd been in a contract for a considerable length of time and my client then decided I was caught.

[TwoWolves]

You won't get that definitive statement, because it would be acknowledging that they are breaking the law. They can make policy decisions to not use Ltd contractors any longer, but not policy decisions that people are thrown inside IR35. They can only do that on the facts.

I see your point. Looks like HMRC have condemned the industry to a giant shuffle then.

[webberg]

The HMRC statement, like all of them, is very carefully worded.

HMRC have taken the decision that they will only use information resulting from these changes to open a new enquiry into earlier years if there is reason to suspect fraud or criminal behaviour.

The emphasis is mine.

Read these carefully and make a judgement.

[CompoundOverload]

The HMRC statement, like all of them, is very carefully worded.

HMRC have taken the decision that they will only use information resulting from these changes to open a new enquiry into earlier years if there is reason to suspect fraud or criminal behaviour.

The emphasis is mine.

Read these carefully and make a judgement.

*Reason to suspect* now how would / could they possibly pin point individuals, they will no doubt do targeted campaigns at institutions (see GSK) as picking off individual LTD's would be a slow and drawn out process given their limited resources.

First things I "suspect" they will look at is those who deemed themselves outside and then have stayed at the same firm post April and changed to inside - easy pickings!

[Lockhouse]

Assuming that you're not the random victim of a current investigation, I would have thought that if you close your company and go umbrella that once you've got the OK to close you're pretty much in the clear. Keep the insurances going until your next years' tax return is accepted just in case.

IANAA.