IR35 fine - advice please!

savvysearcher

thanks so much pennywise, i now get it, and it makes sense. Did think it odd as to my misunderstanding of it. Yes, it looks like they did look at the whole picture in my case.

savvysearcher

Pennywise you've convinced me to approach Qdos, think my accountant isn't up to this. Fingers crossed there's someway out of this!

savvysearcher

Cyclingprogrammer the HMRC did some serious digging, they even contacted my last assignment line manager and used what answers they got to work practices to strengthen their case. In effect they seemed to disregard the contract I had with my agency and felt that in practice there was little difference between the permanent members and my work practices i.e. supervision, working core hours, work being overseen, etc

chrismac1

I think you've had some really good advice on here savvysearcher. If Qdos say bad luck leave it at that, but otherwise there is still hope. For other contractors who stumble across this thread, for pity's sake get a formal contract review and tax insurance. It's £200 or so all in for the first year and £100 thereafter, and it is protecting you from £10k to £90k of tax risk and untold hassle and stress in dealing with HMRC.

savvysearcher

Yes the advice has been great, many thanks to all of you for your help. Will take on board all of it and see what Qdos says. thanks again.

agrinnall

From everything you've said it sounds like it may be difficult for you to overturn HMRC's decision. You therefore should understand that a large part, probably the majority, of the amount you have to pay is not a fine but payment of tax that you would have had to pay at the time you earned the money had you been operating within IR35 rules. If you consider that you've been hard done by and have had to pay something that other people haven't then it'll fester and you might develop the irrational hatred of HMRC (who after all are only doing what their political masters tell them to - look up Dawn Primarolo and IR35) that some posters on here have. Better to pay up with reasonably good grace and move on.

savvysearcher

I see your point agrinnall. I certainly don't want the matter to fester and I will use Qdos conclusions as a final word on it. I too think I have little hope in the decision being overturned but its worth a final shot.

chrismac1

Just to be clear, savvysearcher, if HMRC were to cold call the HR or payroll folk at the majority of my "IR35 clients", and even the directors in many cases, they would doubtless get the strong impression from many that my clients were effectively staff folk. This includes all of the locum doctors and associate dentists I have had on my books, which is a small sample size of 3 as most of my IR35 folk are engineers.

I am more than 90% confident that I would win ALL of the cases for the locum doctors and associate dentists. The staff HMRC would speak to are very unlikely to know the arrangements for holiday cover and the risk of commercial loss within those contracts, and the other terms that put my clients outside IR35 - that is between my clients and the practice owners.

This is the stuff a decent accountant or Qdos legal guy will go looking for. If it is there it is time to go back into the battle with your sword freshly sharpened. If it isn't there, you've spent a few £100 proving to yourself that the tax bill is valid and learnt a harsh lesson for the future. This experience should not put you off future such work, just get better legals and a better accountant next time.

savvysearcher

Yes, I see your point chrismac1. It has been a tough lesson thus far. For now going back to Umbrella but will also see what Qdos say. £100 as a last ditch attempt is money well spent to get an answer whatever it may be from a reputable source. As for the future may go back to locum but for now taking a break from it.

TheCyclingProgrammer

chrismac1 wrote: »

I think you've had some really good advice on here savvysearcher. If Qdos say bad luck leave it at that, but otherwise there is still hope. For other contractors who stumble across this thread, for pity's sake get a formal contract review and tax insurance. It's £200 or so all in for the first year and £100 thereafter, and it is protecting you from £10k to £90k of tax risk and untold hassle and stress in dealing with HMRC.

I'd also recommend an IPSE membership.