HMRC Shoots Itself in the Foot

You couldn’t make this up, HMRC have finally closed a three year investigation into an IT contractor, employed by themselves to provide consultation into their Foreign Account Tax Compliance Act, which required far more expertise than the HMRC currently has access too. However three meetings with the status inspector resulted in turning down the contractors appeal, the decision was made to find the end user culpable in the engagement of the contractor whilst his status according to the Status Inspector (my capitals out of respect for his position) remained firmly one of “Inside of IR35”. The outstanding recovery of some £59,000 was to be pursued, in the event of the contractor failing to pay, HMRC have the right to recover the liability from the end user in this case “HMRC”. call me cynical but as this case took nearly three years, and as it became clear that they could be liable for the alleged transgression, rather than take themselves to court HMRC informed the client the case had been dropped!