PAYE/Divs

[jaybro]

What do you mean as 'initially sold' as being outside? Is this a public sector job where they made an outside determination? If so, forget the contract review, you shouldn't have bothered, and go with outside, the risk isn't yours.

If you mean the agency said it was outside, well, you've learned an expensive lesson about trusting agents on something of which they probably know nothing and might lie if they did know anything.

It’s a private sector job, although the end client is public. The agency say it’s outside and that they have circa 300 contractors at the private company who have never raised concerns. The point they miss, is the these 300 people don’t work on the account I do and don’t do they same role, therefore it’s a mute point in my opinion. I’ve put more details below.

[Craig@Clarity]

For clarity, I’m working in the private sector therefore the decision on my IR35 status is down to me. One of the top two organisations have reviewed my contract and working practices and deemed it to be inside IR35.

It is up to you but you've received a professional opinion so I would go with that. However, they can only advise on the information you've given them. If you've been "sold" an IR35 friendly contract from the agency, the contract isn't really that relevant unless it mirrors the contract between the agency and end client. It's going to be down to working practices.

I believe I have right of substitution for example. It’s in my contract but to substitute would not be straightforward. My boss agrees that a substitute would be possible if they met the criteria but my reviewer believes that it is more likely that they would decline a substitute and arrange an alternative via their normal resourcing route, which then means HMRC are likely to believe it’s not a true unfettered right of substitution.

It's words like using "My boss" that I'd avoid if speaking to HMRC on this subject If you believe you have the right to substitute, then it maybe that the top firm reviewers haven't had the right message conveyed to them to be convinced that it's genuine. If you're saying that you do have the right to sub assuming that sub has the relevant skills/criteria then you have a right. If your client is in agreement with this then great. Just because you don't have an immediate sub lined up doesn't mean you can't or won't find one.

In addition, there are permanent members of staff doing a very similar role and the argument is that I am there to bolster resources rather than provide a specific set of skills

Similar or same? If you fail direction, supervision and control then you simply fail it. Doesn't mean it's inside IR35 though.

As I say though, if the contract has been reviewed professionally based on the information you've given them, I'd personally go with them. In the mean time, take what you need out the company making allowances and provisions for taxes whether inside or outside depending on which way you go and buy a Terry's Chocolate Orange. You shouldn't need to wait for a final decision on your IR35 status before taking the cash out. Kids will starve otherwise!

[DeludedKitten]

It’s a private sector job, although the end client is public. The agency say it’s outside and that they have circa 300 contractors at the private company who have never raised concerns. The point they miss, is the these 300 people don’t work on the account I do and don’t do they same role, therefore it’s a mute point in my opinion. I’ve put more details below.

If it's private sector, then at the moment the decision sits with you.

If you decide that the role is inside IR35 then you need to look at the impact of that for you and on your take home. If there are significant travel expenses, for example, then that might become a deal breaker since you won't be able to claim them any more. You could stick more cash in a pension plan, which is an allowable expense and therefore reduces the deemed payment somewhat, if that works for you.

Or you could listen to the advice and modify the working practices and put yourself outside IR35. That would mean that you've taken professional advice and due diligence and you are confident that you'd be able to argue that you haven't been negligent - difficult if there is a decent assessment that you are inside. If you put the role through HMRC's CEST tool, would it give you an inside or outside determination? Although CEST has many flaws, if you can get an accurate assessment that it is outside then get the client to complete it and save the judgement because HMRC will stick to that (they say).

Or you could stay outside IR35, make sure you have decent legal protection, and keep the money in a rainy day fund. If HMRC come calling then you can pay up if you lose the argument, if they don't you have the cash available. Depends on your attitude to risk - if you think of the number of contracts out there, and the number of investigations that HMRC take on, and the number that they lose each year (75%) then you could well be fine. So you've gotta ask yourself one question: "Do I feel lucky?" Well, do ya, punk?