IR 35 tax help

[windjammer]

any accountants or anyone suffered with been called IR35 when submitting there yearly accounts,just trying to get my head round it all.thanks matt

[TimBB]

Hi Matt

I'm an accountant
Send me a PM

No promises as it's not something I generally deal with but will help if I can

Tim

[In Reverse]

Get some proper advice on it Matt. If you fck it up it will literally cost you thousands of not tens of thousands. The HMRC have been aggressive in pursuing a lot of cases.

It largely boils down to your contract/terms of work - does it clearly define you as a contractor (there are a number of "tests" that need to be applied), and how you go about your business - can you genuinely be judged to be separate from your clients' employees?

Do some rooting around on the web too - there's plenty of good stuff knocking about.

[Mariner]

There was or is an organisation called the professional contractors association. Their website has lots of information.
Do you work through an agency?
If so why haven't they set up your LTD status?
IR35 biggest pain is the two year rule at one site.
Do get good account and do buy the insurance against revenue investigation.

[Dave Barter]

What In Reverse said. I have experience of this and am happy to give pointers but you need a pro as there is a lot of flippancy and hearsay out there. My neighbour is paying a £100k bill as a result of falling foul of IR35.

[In Reverse]

Can you elaborate on how they were found to be inside IR35 Dave, without going into specifics?

[windjammer]

What In Reverse said. I have experience of this and am happy to give pointers but you need a pro as there is a lot of flippancy and hearsay out there. My neighbour is paying a £100k bill as a result of falling foul of IR35.

my accountant warned me about this happening,my increase in national insurance is not that much compared to a 100k bill.thanks

[Dave Barter]

Can you elaborate on how they were found to be inside IR35 Dave, without going into specifics?

Tried to sit in an umbrella company which HMRC went for big time. They only had one client and no specific deliverables other than “hours” for a long time as did just about everyone in the umbrella. You know this but to get clearly outside of it you need to show you run your operation different to standard employment model. Anything close and you’re at risk. When I used to contract I worked for specific outcomes and outsourced an element of my work to be safe.

[In Reverse]

Cheers. It's a familiar story.

I'm on the cusp as I've frequently only one client at once and I'm just billing for hours. Had contracts etc looked over and I'm pretty sure I pass all the tests but it's still a concern.

[Justchris]

I have one major client (the nhs) and a handful of other clients that I work for every mont, so im good. However I have heard of a few guys doing similar to me without the minor clients, and they get round the problem by invoicing and paying each other to show they have multiple income sources for the same type of work.

[ScotRoutes]

Tax fraud then?

https://www.tax.service.gov.uk/shortforms/form/TEH_IRF

[Dave Barter]

It's a tricky one scotroutes. IR35 is a great big hammer used inconsistently to screw the majority because of the minority.

A contractor can be dismissed at a moments notice. Often has no sick rights, no pension rights, no staff benefits, no career progression and no employment rights. IR35 attempts to tax them on a level basis with employees even though they clearly do not have the same protections. There are career contractors who take the piss by charging £1000+ per day and working 9-5 for the same company (usually the government) for years. This lot deserve a pasting. But then there are many others who live from contract to contract often in great uncertainty who maybe deserve a tax break in order to cover some of the risk they take and the rights they relinquish.

I'd not fill in that form until I knew the individual's circumstances. In the same way I'd not grass on a footpath rider unless they were on an eBike ;-)

[ScotRoutes]

[Matt]

Tax fraud then?

https://www.tax.service.gov.uk/shortforms/form/TEH_IRF

Just used that form to report Apple & Amazon

[Justchris]

Tax fraud then?

https://www.tax.service.gov.uk/shortforms/form/TEH_IRF

They are not far off it...