Have you been deemed inside IR35?

Contracting operating their own limited companies often ask what will happen if they are considered to be inside IR35 following a HMRC investigation where they have been operating as if outside of the regulations.  If this happens, the contractor  could face a big tax bill and a fine, as well as interest if HMRC consider it appropriate.

If the contractor deemed inside IR35 cannot pay, what are his options?

Firstly, try to find out if you are within the time limits for an appeal. If you are, then attempt to get HMRC to review the case by contacting a lawyer, this will allow you to see if you have valid grounds to appeal. If you wish to take this route, then the representative must be a specially trained advisor.  Green Lantern works with specialist HMRC advisors and we can assist with putting you in touch with them if specialist advice is required.

Once you contact a professional to get advice and it is seen that you are within IR35, then you have two options – either pay in full all of the penalties so to  not gain interest or inform the HMRC that there are insufficient funds in the company. If it is the latter, then it will enforce the debt upon the company making it insolvent. IR35 relies on the debt being with the company rather than an individual director.

IR35 is a complex set of regulations and it is sensible to discuss the implications and considerations with our expert consultants.  Give us a call here at Green Lantern today by calling 0207 164 2116.