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Nightmare becomes reality

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    #11
    Originally posted by b0redom View Post
    Monkeys might fly out of my butt, but I bet they don't. Unless there's any supporting evidence (and I'm yet to see any), screaming about retrospective taxation is just FUD at this stage.
    This is a timing game - HMRC can't do anything until Self Assessment returns are in for 2016/17 (showing income was mainly received via dividends) and probably 2017/18 (showing income was received via PAYE).

    And as you will notice with the BBC cases at the moment all this stuff takes a very long time which given HMRC want things rolled out in the private sector next April means HMRC want to do leave things as late as possible.

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      #12
      Makes sense about the results of SA season and also no evidence they are looking but I stand by the fact if they choose to inspect a large engager for IR35 compliance and want to look at the details of your former PSC theirs nothing stopping them.
      I suppose theirs the question of transfering the liability from a company that doesn't exsists anymore but that hasnt really stopped them in recent history.
      All worst case made up scenarios but still....

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        #13
        Originally posted by b0redom View Post
        Erm. I've not heard anything regarding retrospective investigations beyond anecdotal panicking.

        Sure HMRC may look at your current status and say - you're a disguised employee you're liable for extra tax on your current contract, but I've seen nothing to suggest that they will use that as a tool to go back and look at previous contracts?
        I would be a little surprised if it did not cross HMRC mind. Contractor has been caught wrongly claiming outside IR35 on a contract, have they being doing the same on previous contracts for different clients? Having said that because they would be different contracts HMRC would have to go through the evidence gathering/tribunal loop again with no guarantee of the same result. In fact the contractor should be wise to their tactics and prepare a better defence.

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          #14
          Originally posted by NotAllThere View Post
          No, because it's a personal tax.
          False.

          Comment


            #15
            Originally posted by Acme Thunderer View Post
            I would be a little surprised if it did not cross HMRC mind. Contractor has been caught wrongly claiming outside IR35 on a contract, have they being doing the same on previous contracts for different clients? Having said that because they would be different contracts HMRC would have to go through the evidence gathering/tribunal loop again with no guarantee of the same result. In fact the contractor should be wise to their tactics and prepare a better defence.
            Have you met your typical contractor - the first time they will know there is a problem will be when HMRC sends their first letter and a lot will groan and eventually pay up because they don't have IPSE membership or QDOS insurance and won't know what to do.

            HMRC would then drop all cases where the contractor wrote a sensible response but even those initial letters would raise them a fair bit of money for zero effort.

            Comment


              #16
              Originally posted by NotAllThere View Post
              No, because it's a personal tax.
              Company liability. They'd have to lift the corporate veil, not an easy thing to accomplish.

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                #17
                Originally posted by NotAllThere View Post
                No, because it's a personal tax.
                It's not really, its opened through an employer compliance review, so no company, no possibility of an employer compliance review.

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                  #18
                  Originally posted by WordIsBond View Post
                  Company liability. They'd have to lift the corporate veil, not an easy thing to accomplish.
                  Apologies for straying from my usual haunts.

                  Where a liability arises on a company for PAYE, or in this instance a sum equivalent to PAYE, where HMRC is in time to raise a Reg 80 determination, (limited presently to 4 years from the end of the tax year in question), then this goes to the company and is a corporate liability.

                  Where the company is "close" - broadly owned and controlled by 5 or fewer people - if the company fails to pay, then the liability falls to the directors. In some instances it can go to the employee, if that employee is not a director.

                  This is a rare instance of piercing the corporate veil.

                  In some cases recently, HMRC has been stepping in and preventing such close companies from being struck off and/or have made a claim on the liquidator for money due.
                  Best Forum Adviser & Forum Personality of the Year 2018.

                  (No, me neither).

                  Comment


                    #19
                    Originally posted by webberg View Post
                    Apologies for straying from my usual haunts.

                    Where a liability arises on a company for PAYE, or in this instance a sum equivalent to PAYE, where HMRC is in time to raise a Reg 80 determination, (limited presently to 4 years from the end of the tax year in question), then this goes to the company and is a corporate liability.

                    Where the company is "close" - broadly owned and controlled by 5 or fewer people - if the company fails to pay, then the liability falls to the directors. In some instances it can go to the employee, if that employee is not a director.

                    This is a rare instance of piercing the corporate veil.

                    In some cases recently, HMRC has been stepping in and preventing such close companies from being struck off and/or have made a claim on the liquidator for money due.
                    I think you're wrong, but I'd be happy to be corrected if you could cite the specific legislation that allows for a more straightforward transfer of PAYE debt in the context of a close company, which I agree is defined in law. The transfer of debt to an employee is dealt with in Regulation 72 of the PAYE Regulations 2003 (different for NI). Regulation 80 deals with the employer.

                    As far as I'm aware, the case law also shows the opposite to be true, providing the director was not acting willfully. For example:

                    https://www.rpc.co.uk/perspectives/t...ty-to-employee

                    Acting without reasonable care would be incredibly difficult to demonstrate in the context of IR35, given the subjectivity involved, especially if a professional contract review were sought.

                    Comment


                      #20
                      Originally posted by oliverson View Post
                      keep seeing mention of contractors having to close down their limited due to these changes. Is that really feasible - close them down and just walk away, possibly owing tax, etc?
                      Originally posted by NotAllThere View Post
                      No, because it's a personal tax.
                      Originally posted by jamesbrown View Post
                      False.
                      Technically yes, but it works like a personal tax in practice due to its nature. As webberg says:

                      Originally posted by webberg View Post
                      Where a liability arises on a company for PAYE, or in this instance a sum equivalent to PAYE, where HMRC is in time to raise a Reg 80 determination, (limited presently to 4 years from the end of the tax year in question), then this goes to the company and is a corporate liability.

                      Where the company is "close" - broadly owned and controlled by 5 or fewer people - if the company fails to pay, then the liability falls to the directors. In some instances it can go to the employee, if that employee is not a director.

                      This is a rare instance of piercing the corporate veil.

                      In some cases recently, HMRC has been stepping in and preventing such close companies from being struck off and/or have made a claim on the liquidator for money due.
                      See also here and here. Note further that if you're suspected of shutting your company down to avoid IR35 liability, then you risk being charged with evasion and/or fraud.
                      Down with racism. Long live miscegenation!

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