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

[CuriousIan]

I just noticed that HMRC have published a briefing paper within the last couple of days (see HMRC issue briefing: reform of off-payroll working rules - GOV.UK) which says a couple of interesting things:

HMRC will launch an enhanced version of the CEST tool before the end of the year.

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.

So, in theory, a status determination of "inside" (when you've operated as "outside" previously) shouldn't result in an enquiry into earlier years. It doesn't say that they won't use that information if they happen to do a random enquiry though.

[wiffwaffwaa]

So, in theory, a status determination of "inside" (when you've operated as "outside" previously) shouldn't result in an enquiry into earlier years. It doesn't say that they won't use that information if they happen to do a random enquiry though.

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.

[GhostofTarbera]

If you are currently working inside IR35 (most people in banking sector) and are declaring yourself out that is indeed fraud surly ?


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[JohntheBike]

If you are currently working inside IR35 (most people in banking sector) and are declaring yourself out that is indeed fraud surly ?


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declaring yourself out that is indeed fraud surly

Most believe they are working outside of IR35 and act accordingly. That's a far cry from claiming that they are fraudulently avoiding tax. However, is it not the case that it's the responsibility of their own Ltd. companies to make the judgement about their employment status? They personally are not making the judgement. The directors of their own Ltd. are making the judgement and it would be very difficult for HMRC to prove that that judgement were fraudulent and pass any liability to the individual.

[malvolio]

Most believe they are working outside of IR35 and act accordingly. That's a far cry from claiming that they are fraudulently avoiding tax. However, is it not the case that it's the responsibility of their own Ltd. companies to make the judgement about their employment status? They personally are not making the judgement. The directors of their own Ltd. are making the judgement and it would be very difficult for HMRC to prove that that judgement were fraudulent and pass any liability to the individual.

No, it would be a piece of micturition.

[JohntheBike]

No, it would be a piece of micturition.

extracting the urine wouldn't come into the picture. HMRC would have to prove their case. Granted, they may successfully bully some, but not everyone. It's not like the loan charge fiasco.

[coder]

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.

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.

[JohntheBike]

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.

absolutely, you can't trust them on anything they say.

[wiffwaffwaa]

This will be unpopular, but I believe HMRC have been absolutely clear in the past that they will go back and chase back taxes, should you have incorrectly being classified as being outside IR35 instead of inside.

What hasn't been clear, is the determination of the IR35 for varying scenarios. But this is common with legislation and interpretations.

However with this released guidance from HMRC, this is the first time HMRC are explicitly stating their intentions with newly interpreted inside R35 contracts from April 2020. They have not previously stated this, so I for one welcome this release, even if I find the entire IR35 legislation counter productive.

[WordIsBond]

However with this released guidance from HMRC, this is the first time HMRC are explicitly stating their intentions with newly interpreted inside R35 contracts from April 2020. They have not previously stated this, so I for one welcome this release, even if I find the entire IR35 legislation counter productive.

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....