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IR35 White space?

Hello I wonder if anyone could take a look at this for me.

We have client who is a one man company,  this year all of the companys work has been to one separate company, the company hasnt substituted any staff,  however from the terms of the contract and in actual terms on balance it looks like we are outside IR35, but can see that there are some agruments both ways.

In this instance can we mitigate future problems by disclosing in the white space that we do not condsider on balance to fall under IR35 and have prepared the income tax and corporation return as such,  however an element of judgement has been used  etc, etc.....

On the downside I suppose this guarantees HMRC taking a closer look and then having an interesting discussion.

Has anyone gone down this route and would you recommend it or otherwise.

Thanks

DG

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13th Sep 2012 19:27

Errr...

Which white space would that be?  There is no white space on the CT return.

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14th Sep 2012 10:12

Hi,

 

We are doing SA return at the same time, so could put it there?  Do you think it would help?

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wouldn't be adding anything specific

He will have ticked the P35 to say he is operating outside IR35, that is enough information in my opinion.

I fail to see what good could come of drawing it to the attention of HMRC?

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By Maslins
14th Sep 2012 10:34

What would it help with?

You're treating the company as outside IR35...but then basically saying elsewhere "ooh, I'm not sure if that's correct".

IR35 is horrendously grey...but admitting you're not confident your client is outside doesn't seem a smart move to me.

Why not get an insurance like QDOS's TLC35, declare them outside (with no caveats/we're not sure comments), and enjoy the peace of mind that if HMRC did decide you're wrong, firstly you'll get decent professional experts to argue your client's case, and secondly even if your client did lose, the insurance policy pays the extra tax/NICs.

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