PCG warns PAYE visits are turning into IR35 status enquiries
In this issue:
- PCG advice on PAYE visits
- Support from PCG – Advice and back up for members
- Comment on pre-budget statement
- Lobbying report
- Appeal reminder
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1. Advice on PAYE visits
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Members may have noted an increase in Inland Revenue activity in recent weeks. We know that the IR is initiating PAYE visits, which in the event, seem to turn into IR35 status visits.
Since PAYE is Revenue 'bread & butter', a PAYE visit can have a fairly wide remit, which means the IR is entitled to ask a wide range of questions. The
IR is allowed to ask to see contracts, as your IR35 status affects your PAYE/NI/expenses etc.
However under the IR code of practice, a status review cannot be completed under the pretext of running a PAYE visit.
PCG has produced a set of FAQs relevant to PAYE visits and the tax investigation insurance.
Questions raised include:
1. Is a normal PAYE audit covered by the PCG Tax Investigation Insurance?
2. What should a contractor do if there are issues that are debatable?
3. What should a contractor do if they are contacted by the Revenue regarding a PAYE audit visit?
4. What is the Inspector entitled to see or ask for?
5. What sort of areas should a PAYE review cover?
6. If I want someone to assist me with a PAYE audit meeting what can I do?
(ie no accountant available etc)
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2. Support from PCG – Advice and back up for members
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Independent observers felt that the IR35 case against contractor "Eddie Battersby" was a case of the IR 'picking' on a target and publicising the result. It was a reminder of the need for a strong representative voice for all contractors.
The latest results from PCG advisors make for very different reading, and this time serves as a reminder to members about the strength and quality of information they buy into when joining PCG - another indicator of how good an investment membership is.
Accountax are yet to lose an IR35 related case, Lawspeed recently publicised two 'wins' and Qdos, who provide the Tax Investigation Insurance which is included in PCG membership, have settled 19 cases on behalf of members either for nil tax or small add backs for private expenditure.
Of great significance is one case example, initially reviewed as a 'borderline fail' contract by Qdos and seen as a 'fail' by IR, has been *dropped* by the Revenue inspector after Qdos argued the case using knowledge from the contract review and using additional information from the member where they were able to establish the *actual* working relationship.
The case proves that the IR35 issue is never a 'done deal' and through shared knowledge and top class back-up, members can work together to protect their interests.
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3. Comment on pre budget statement
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Kevin Miller, PCG Finance Director has provided a summary of information relevant to members from this week's pre-budget statement:
NB You must be a PCG member and logged into the discussion forums to make this link.
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4. Lobbying report
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Andy White recently reported on a number of activities under the PCG public affairs brief. The range of issues where PCG is now representing members' interests has grown significantly and now includes fast track visas, IR meetings, Party conferences, HP cases, Agency legislation, DTI / Small Business Minister, CBI, Conservative policy, regulations and small business issues.
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5. Appeal reminder
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The judicial review appeal takes place next week, 4th-6th December in the High Court. Once again PCG will operate an office nearby and members and interested parties are invited to call in at any time, to:
The Cheshire Cheese,
5 Little Essex Street,
London WC2 - close to the High Court from early til late each day (December 4-6, 2001).
(PLEASE NOTE: This is NOT Ye Olde Cheshire Cheese in Fleet Street).
PCG will be posting a comprehensive background briefing about the case and regular statements and updates on a dedicated news site:
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Members' resolutions
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There is a members' forum on the site where members can post their own resolutions and seek support. Current 'live' resolutions can be viewed at:
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PCG Press