Contract ending before April 6th and IR35

[djones123]

I have a quick question on a contract done through a Ltd company and ending before April 6th.

- Can HMRC review contracts ended before April 6th? I have been told that most likely HMRC won't look at contracts ended before April 6th, but i don't know how much is that true.

- Contract was done through a Ltd company, What will be the implications if the contract gets an extension and treated as inside IR35 (PAYE), would the old contract automatically be classed as inside IR35?

Thanks

[Deep Thought]

djones123 said:

I have a quick question on a contract done through a Ltd company and ending before April 6th.

- Can HMRC review contracts ended before April 6th? I have been told that most likely HMRC won't look at contracts ended before April 6th, but i don't know how much is that true.

- Contract was done through a Ltd company, What will be the implications if the contract gets an extension and treated as inside IR35 (PAYE), would the old contract automatically be classed as inside IR35?

Thanks

- Yes if they were to contact your ltd co, ask for documentation supporting your IR35 status and then chose to do an investigation.

- It wont automatically be classed as inside IR35, but it would be a red flag to HMRC IF they chose to look (and it wouldnt be hard).

BUT they have said they wont investigate retrospectively. If you believe them

[djones123]

Deep Thought said:

- Yes if they were to contact your ltd co, ask for documentation supporting your IR35 status and then chose to do an investigation.

- It wont automatically be classed as inside IR35, but it would be a red flag to HMRC IF they chose to look (and it wouldnt be hard).

BUT they have said they wont investigate retrospectively. If you believe them

I think it would be safer to just close the company after paying higher tax and other dues.

I will try to negotiate my new contract terms with the client to make it IR35 compliance otherwise it is not worth continuing.

[deggles]

Nothing is changing in April, other than who is responsible for making the determination. If your new contract extension is deemed 'inside', then either that determination is incorrect, and you should challenge it, or the current 'outside' determination is incorrect, and you owe a stload of tax and NI to Her Majesty's Robbers and Crooks

[djones123]

deggles said:

Nothing is changing in April, other than who is responsible for making the determination. If your new contract extension is deemed 'inside', then either that determination is incorrect, and you should challenge it, or the current 'outside' determination is incorrect, and you owe a stload of tax and NI to Her Majesty's Robbers and Crooks

I am going to treat my current contract Inside IR35 and will pay the full tax when corporate tax is due later this year. I am going to negotiate the contract and working terms with the client if get an extension otherwise i will work somewhere else where rates are better.

[otherman]

djones123 said:

I am going to treat my current contract Inside IR35 and will pay the full tax when corporate tax is due later this year. I am going to negotiate the contract and working terms with the client if get an extension otherwise i will work somewhere else where rates are better.

But surely if you can make the follow up work a new contract, then the old one is closed out and it can be reported as outside (if indeed it was) and the new contract can sort itself out.
Or am I missing something?