Another IR35 wake up call Another IR35 wake up call
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  1. #1

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    Default Another IR35 wake up call

    It seems the industry is finally waking up to the extended IR35 implications. It may be that the likes of HSBC et al had already recognised this risk and adopted the no contractors position as a result.

    Contractors, will the client owe you a backdated pension now you’re their employee?

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    This doesn't surprise me 1 bit - the idea of moving anyone inside opens a massive can of worms where the only actual answers will appear x years later after all court cases have fully played out.

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    Quote Originally Posted by JohntheBike View Post
    It seems the industry is finally waking up to the extended IR35 implications. It may be that the likes of HSBC et al had already recognised this risk and adopted the no contractors position as a result.

    Contractors, will the client owe you a backdated pension now you’re their employee?
    No, because you're not going to be an employee, you will only be taxed like one
    “Live a good life. If there are gods and they are just, then they will not care how devout you have been, but will welcome you based on the virtues you have lived by. If there are gods, but unjust, then you should not want to worship them. If there are no gods, then you will be gone, but will have lived a noble life that will live on in the memories of your loved ones.”

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    Quote Originally Posted by JohntheBike View Post
    It seems the industry is finally waking up to the extended IR35 implications. It may be that the likes of HSBC et al had already recognised this risk and adopted the no contractors position as a result.

    Contractors, will the client owe you a backdated pension now you’re their employee?
    Scenario 1) You get declared inside come April 6th. You suck it up and have to pay more tax.

    Your scenario ) You get declared inside come April 6th. You kick off and sue your 'employer' for xx years of back pension. You may or may not win that case, but the evidence you use to fight it is the evidence HMRC need to get all the back tax of xx years..... You lose a tax tribunal, your house, your wife (and my kids), and might not even have got the pension......
    See You Next Tuesday

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    Quote Originally Posted by Lance View Post
    Scenario 1) You get declared inside come April 6th. You suck it up and have to pay more tax.

    Your scenario ) You get declared inside come April 6th. You kick off and sue your 'employer' for xx years of back pension. You may or may not win that case, but the evidence you use to fight it is the evidence HMRC need to get all the back tax of xx years..... You lose a tax tribunal, your house, your wife (and my kids), and might not even have got the pension......
    Nope, employment tribunals are not tax tribunals - different criteria are used (which is HMRCs get out that employment tax treatment != employment rights).
    merely at clientco for the entertainment

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    Quote Originally Posted by eek View Post
    Nope, employment tribunals are not tax tribunals - different criteria are used (which is HMRCs get out that employment tax treatment != employment rights).
    you miss my point. HMRC can see the evidence that the contractor uses to fight for a pension.
    They then use that evidence in a tax tribunal to fight you for xx years of backdated IR35 tax.


    EDIT: for more clarity
    JtB gets determined as inside for April 6th.
    JtB says 'hang on, if I'm an employee then I've always been one so i want the employer pension contributions, that I wouldn't have opted out from, paid into a pension for me.
    JtB goes to court with evidence showing that he was always an employee (Exhibit A)
    Client goes to court and says 'you're not an employee, you never were, you're just a worker with no RoS, and with MOO and SDC in place (exhibit B)

    HMRC see this (matter of public record) and goes "'ay oop. We've got an easy one here. Let's go **** JtB's life."
    HMRC take Exhibits A&B and start an investigation, that may become a case in a tax tribuinal....
    Last edited by Lance; 23rd January 2020 at 14:36.
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    Quote Originally Posted by Lance View Post
    you miss my point. HMRC can see the evidence that the contractor uses to fight for a pension.
    They then use that evidence in a tax tribunal to fight you for xx years of backdated IR35 tax.


    EDIT: for more clarity
    JtB gets determined as inside for April 6th.
    JtB says 'hang on, if I'm an employee then I've always been one so i want the employer pension contributions, that I wouldn't have opted out from, paid into a pension for me.
    JtB goes to court with evidence showing that he was always an employee (Exhibit A)
    Client goes to court and says 'you're not an employee, you never were, you're just a worker with no RoS, and with MOO and SDC in place (exhibit B)

    HMRC see this (matter of public record) and goes "'ay oop. We've got an easy one here. Let's go **** JtB's life."
    HMRC take Exhibits A&B and start an investigation, that may become a case in a tax tribuinal....
    By the time HMRC start up the investigation it will be time barred.
    merely at clientco for the entertainment

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    Quote Originally Posted by eek View Post
    By the time HMRC start up the investigation it will be time barred.
    perhaps. I wouldn't fancy the risk.
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    Quote Originally Posted by Lance View Post
    you miss my point. HMRC can see the evidence that the contractor uses to fight for a pension.
    They then use that evidence in a tax tribunal to fight you for xx years of backdated IR35 tax.


    EDIT: for more clarity
    JtB gets determined as inside for April 6th.
    JtB says 'hang on, if I'm an employee then I've always been one so i want the employer pension contributions, that I wouldn't have opted out from, paid into a pension for me.
    JtB goes to court with evidence showing that he was always an employee (Exhibit A)
    Client goes to court and says 'you're not an employee, you never were, you're just a worker with no RoS, and with MOO and SDC in place (exhibit B)

    HMRC see this (matter of public record) and goes "'ay oop. We've got an easy one here. Let's go **** JtB's life."
    HMRC take Exhibits A&B and start an investigation, that may become a case in a tax tribuinal....
    you miss the fundamental point completely. The ET finds that either you were/are self employed, or that you were/are employed. Either judgement prevents HMRC from coming after you. This is why the settled Susan Winchester's claim out of court. HMRC couldn't afford to let it go to the ET.

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    Quote Originally Posted by JohntheBike View Post
    you miss the fundamental point completely. The ET finds that either you were/are self employed, or that you were/are employed. Either judgement prevents HMRC from coming after you. This is why the settled Susan Winchester's claim out of court. HMRC couldn't afford to let it go to the ET.

    You missed the third option.
    1. Self Employed
    2. Employed
    3. Self employed but taxed as if employed because it's considered you're not really a contractor.
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