CIS & IR 35 Disputes The Construction Industry has been plagued for many years with the disputed difference between Contractor and Sub -Contractor . HMRC has a continual problem with managing the Construction Industry. Several attempts have been made to tighten-up the system, but most of the problems still seem to be there. The latest changes may help to improve the situation. Most of the enquiries come from Status Disputes and IR 35 challenges.
The problem arises where Contractors with lots of sub-contractors are vulnerable to HMRC claiming that the workers are in fact employees (status disputes) and that the contractor is responsible for PAYE and NIC Payments. The Revenue are prepared to go back more than 6 years in some of these cases to recover lost tax etc.
The sole trader who sets himself up as a limited company is again open to an IR35 claim by HMRC, whereby he takes most of his drawings by way of dividends, risks being classed as an employee, if all of her/his earnings come from one source. They will be treated on the same basis as an employee, and subject to Income tax, and NIC.
HMRC do not always obtain or consider all the relevant facts and quite often interpret the rules in their favour, often ignoring other legal issues.
I am also prepared to help businesses put in place systems which make successful challenges by HMRC less likely. By avoiding these type of investigations can prevent an in-depth investigation.
If you are concerned about status or IR35 problems, or have an ongoing tax Enquiry or investigation, then call me today.
