HMRC have launched its ‘Check employment status for tax’ for those concerned about IR35 cases.
We had a play from the end users point of view and answered the questions as follows:
- Which of these describes you best? – The End Client
- Has the worker already started this particular engagement for the end client? – No
- How does the worker provide their services to the end client? As a limited company
- Is the worker or their business an office holder for the end client? No
- Would the end client accept the worker’s business sending someone else to do this work instead? Yes
- Would the worker’s business have to pay the person who did the work instead of them? No
- Can the end client move the worker to a different task or project than they originally agreed to do? No – that would need to be arranged under a new contract or formal agreement
- Once the worker starts the engagement, can the end client decide how the work is done? The worker and other people employed by the end client agree how the work needs to be done
- Can the end client decide the schedule of working hours? The worker decides their own schedule
- Can the worker chose where they work? Partly – some work has to be done in an agreed location and some can be done wherever the worker chooses.
- What does the worker have to provide for this engagement that they can’t claim as an expense from the end client or agency? Materials – items that form a lasting part of the work, or an item bought for the work and left behind when the worker leaves (not including stationery, and most likely to be relevant to substantial purchases in the construction industry). Equipment – including heavy machinery, industrial vehicles or high-cost specialist equipment, but not including phones, tablets or laptops. Other expenses – including significant travel and subsistence (not including commuting) or the cost of a business premises outside the home.
Unsurprisingly the intermediaries legislation does not apply to this engagement.
HMRC say it will not keep a record of this transaction for security reasons. Do you believe them? Are they tracking your IP address?
HMRC say it will stand by the results given unless a compliance check finds the information provided isn’t accurate.
HMRC say it won’t stand by results achieved through contrived arrangements designed to get a particular outcome from this service. This would be treated as evidence of deliberate non-compliance with associated higher penalties.
HMRC can review your taxes for up to 20 years.
Obviously the best thing to do is check for yourself and don’t leave it to your agent as they will not necessarily know the ins and outs of your engagement.
Make sure the end client, the worker and the agency are all singing from the same song sheet….