Should we be worried about retrospective claims?

[jamesbrown]

Why not?

You knew you were an employee really, but decided to declare something different, to obtain a financial advantage.

"In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right."

You deprived HMRC of the NICs and PAYE that were legally theirs.

There is a high bar to transfer a liability from a company to an individual, and IR35 is a company tax (clue's in the name).

If the individual had knowingly failed to apply PAYE properly (because they knew a contract was inside IR35 and they decided not to operate a deemed payment on the turnover accrued from it), the bar would be exceeded.

In practice, having a contract review indicating an outside determination would be "reasonable care" (below the bar).

[northernladuk]

Why not?

You knew you were an employee really, but decided to declare something different, to obtain a financial advantage.

"In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right."

You deprived HMRC of the NICs and PAYE that were legally theirs.

Not intentionally. We believe we are outside and HMRC had to prove we are inside. That's a difference of opinion not intentional deception.

Do you not think you would have heard of fraud in discussions around IR35 by now bearing in mind the legislation has been around 20 years?

[mondeoman]

So lets say I've got a QDOS assessment that says my contract is outside of IR35 and has been since inception. And I've been paying tax etc... accordingly, like a good law-abiding citizen.

Now, the end client has blanket "role assessed" several thousand contractors and assessed them all as inside, on exactly the same contract, and provided SDS's to support that.

For anyone who simply goes onto a new contract via agency or umbrella, is the bar low or high for HMRC for back-tax on the individual? I'm going with low...

[jamesbrown]

So lets say I've got a QDOS assessment that says my contract is outside of IR35 and has been since inception. And I've been paying tax etc... accordingly, like a good law-abiding citizen.

Now, the end client has blanket "role assessed" several thousand contractors and assessed them all as inside, on exactly the same contract, and provided SDS's to support that.

For anyone who simply goes onto a new contract via agency or umbrella, is the bar low or high for HMRC for back-tax on the individual? I'm going with low...

You can go with whatever you want

The bar is the bar. That's the point. It doesn't vary depending on circumstances, the circumstances determine whether it's crossed.

Was "reasonable care" taken? A contract review suggests: yes.

They will go after the contractor's PSC (I don't think there's much argument about that, only the probability) and, if the PSC has no money and the contractor took reasonable care, it will almost certainly end there.

[Paralytic]

Why not?

You knew you were an employee really, but decided to declare something different, to obtain a financial advantage.

"In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right."

You deprived HMRC of the NICs and PAYE that were legally theirs.

If someone was REALLY stupid and say "Yes I knew I as an employee really, but decided to declare something different", then, yes, I guess they could come after you.

But, even if someone did think that (and I'm sure many do), so long as they don't admit it, plausible deniability would come into play.

[LondonManc]

Clearly they'll go after the low-hanging fruit. They'll find a job role, like a PMO Analyst, and give it a try. If they win, they'll then go after all PMO Analysts. I can see them avoiding specialists - someone brought in to introduce a technology to a business for example - because they know that nobody can subject them to SDC because nobody in the client co knows how to do that role.

It's analogous to a burglar looking for the houses with single-glazing, no alarm and easy access to the back garden.

[CompoundOverload]

My twopen'th.

In theory where a role has not materially changed in its function, operation or result but pre April 2020 is outside IR35 and post that date "inside", HMRC would have a strong case for opening an enquiry.

In practice would HMRC have the resources to chase individual circumstances?

Probably not.

More likely I think is HMRC going to the end client and asking how many people being paid as employees or inside IR35 contractors in 2020/21 were being paid as contractors in 2019/20.

This gives HMRC a ready made target list.

However, they still need resource, especially if every case is contested.

I think therefore that only the very obvious cases will be selected.

It would be easier for them to chase those outside to inside with same client as the data would be readily available to them.

I can't see why they would go for those continuing to be outside as if the SDS from the client states their reasoning for being outside, why would they want to challenge this for one or two contractors? There won't be a massive pool of outside contractors post April (compared to currently) given most places have done a blanket job / or require CEST et al.

The low hanging fruit IMO are those outside to inside or PAYE with the same client.

[realaledrinker]

It would be easier for them to chase those outside to inside with same client as the data would be readily available to them.

But it's not. The Agency return to HMRC does not specify the client.

[eek]

But it's not. The Agency return to HMRC does not specify the client.

How many people stay with an agency when they move end client - I would be seriously surprised if it's as high as 1%...

[portseven]

Speaking as someone involved in the whole BN66 debacle for the last 12 years I would say its pretty much a certainty.

HMRC are tulipe!