IR35: Planning for April 2021 – should I stay or should I go?

[cojak]

The client I'm with fails on all three - however they are non-profit but I can't see anywhere that it makes a difference...

You're right, it doesn't.

[Bluebird]

You're right, it doesn't.

Ok, so as the client does need to determine my IR35 status - as the yare not one of the big players - how will they know they need to do this?

Will HMRC approach them, or should they as a business know this anyway?

Or will the agency tell them or is it up to me to make sure that there is determination one way or the other?

[northernladuk]

They won't. They will put you inside. It's easier.

[Bluebird]

They won't. They will put you inside. It's easier.

How will they know to put me inside?

At the moment I'm just paid on an invoice basis the same as any other supplier...

[DeludedKitten]

Ok, so as the client does need to determine my IR35 status - as the yare not one of the big players - how will they know they need to do this?

Will HMRC approach them, or should they as a business know this anyway?

Or will the agency tell them or is it up to me to make sure that there is determination one way or the other?

The agency should tell them that they need to make the determination so that the agency (as the fee payer) can deduct any tax that's due if you are inside IR35.

Since they don't know that they need to do this, then this is your opportunity to get your side of things in first. Work with the client so that they understand what they need to do and what the risks are. Highlight how they can make the role continue to be outside IR35 so that they can feed that back to the agency that they have made a fair assessment that you are outside and the agency does not need to make any deductions.

Don't leave it to them to panic at the last minute and make the wrong move - get them to understand that you are an independent contractor, not a deemed employee, and get them on your side now rather than later.

[Transonic]

So, it’s (nearly!) October 2019 and if you haven’t already, now is the time to start planning for the IR35 changes in April 2020.


Just to be clear – IR35 itself isn’t changing; the change is who decides whether your role is inside or outside of IR35. It is the client who decides that, not you (or your contract reviewer).

First, here are the new rules from the Horse’s Mouth. Read them:
Understanding off-payroll working (IR35) - GOV.UK
April 2020 changes to off-payroll working for clients - GOV.UK


Awareness, not guidance

In this thread I am NOT going to tell you what to do. Your decision comes down to your attitude to risk. If you think it’s unlikely that HMRC are going to start looking closely at your tax position in the future, then you don’t really need to do anything.

But if you feel uneasy about this, maybe it’s time to take stock and decide what you are going to do.


What is the problem?

There is no problem if your outside IR35 contract ends before April 2020. It was reviewed and your working practices show that the outside review was a valid one.


The problem as I see it is if you are currently in an outside IR35 contract but your client decides that your role will be inside IR35 at your next extension or after 6th April 2020. HMRC may look at the months before the switch: “if you are inside IR35 now, you should have been inside IR35 then”.

There is evidence that this happened in the public sector when things changed for them
IR35 inspectors to probe public PSCs retrospectively


What can I do?

Basically, if you think that your client is going to decide that you are inside IR35, you need to consider whether to leave that client:

• BEFORE 31st December 2019 (or you client's assessment date)
• or 24th February 2020 (monthly payment), if your client hasn't said anything to you about assessments
• or 24th March (weekly payment), if your client hasn't said anything to you about assessments
• or not bothering at all and sailing through 6th April 2020.

It’s all about your appetite for risk.


If you do decide to leave, there must be enough time for your last invoice payment date to fall before 6th April 2020.

Because as HMRC says:


(The 'simplified test' defines the size of the companies affected by the changes - annual turnover of more than £10.2 million, see the website for details).


But there’s more to consider…

December 31st comes from some people thinking that you will have been assessed between Jan and March, but my date would have been around the middle/end of Feb (or middle of March if weekly), depending on timesheet submission.



We need to remember that none of this is definite, but I’ve been around long enough to have a fair idea where this is all going, hence this thread.

I don't know that this is actually going to happen, or when it might happen. I make my own determination of the situation based on previous observation of HMRC's ethics, methods and tactics, and the risk that they will be applied in the future with regard to the new world of IR35.

If people ARE in business on their own account, they should be familiar with calculating risk versus reward and determine their own manner of mitigation in light of being informed of the possibilities.

Basically - contractors are big and ugly enough to decide for themselves once they have the information.

It's called making an informed decision.

First time poster long time reader. Contracting in clinical research for not far off 10 years. My current contract runs until 22Apr2020. Should I be pushing my agent to get my end client to assess much sooner rather than 6Apr3020? From reading previous posts I'd say this is most likely a yes.

There hasn't been a discussion between myself and the client regarding these changes, but my agent is proactive and keeping me on side and perhaps looking to glean more information than I have!

Current gut feeling is if assessed as inside I'll leave and ride out the initial storm, assess options. However like many, hoping end client will see the impact on delivery and assess as outside. Perhaps naive but one can hope for the best and prepare for the worst!

I'm still not convinced it will legally materialise... Roll on 2020!

[DeludedKitten]

First time poster long time reader. Contracting in clinical research for not far off 10 years. My current contract runs until 22Apr2020. Should I be pushing my agent to get my end client to assess much sooner rather than 6Apr3020? From reading previous posts I'd say this is most likely a yes.

Yes. Any payments made after April 6th will need to be on the basis of an assessment made by the client.

I'm still not convinced it will legally materialise... Roll on 2020!

The draft legislation is written. There must be a Finance Act in order to collect taxes, so some version of the FA will be in place before the new tax year whatever happens with the election or anything else. It could be removed, but I would do my planning based on it being in the new Finance Act, whenever it passes.

[Maven]

IR35 April 2020 - options?

I've read a few posts but I'm new to this forum. I've been working through my limited company on and off for about 8 years in the pharmaceutical industry working for different companies.

I'm coming up to 2 yrs freelancing for one company only, which to be fair makes it look like I'm a full time employee, although I do not see it that way! HR do not reply to my request: will I be inside or outside IR35? I assume they will assign me inside IR35. Meanwhile, I have a few options: continue at risk (my contract is direct with the company but may need to get the contract amended), start contracting with more than one company (if that helps to avoid being inside IR35) or take a permanent job where I am currently working.

Given the current situation I think it may be better to go for the permanent job, even if it is only for short time, just to see what happens and then I can always return to contracting later? Is that a sensible option given the uncertainty about IR35?

[Fred Bloggs]

I've read a few posts but I'm new to this forum. I've been working through my limited company on and off for about 8 years in the pharmaceutical industry working for different companies.

I'm coming up to 2 yrs freelancing for one company only, which to be fair makes it look like I'm a full time employee, although I do not see it that way! HR do not reply to my request: will I be inside or outside IR35? I assume they will assign me inside IR35. Meanwhile, I have a few options: continue at risk (my contract is direct with the company but may need to get the contract amended), start contracting with more than one company (if that helps to avoid being inside IR35) or take a permanent job where I am currently working.

Given the current situation I think it may be better to go for the permanent job, even if it is only for short time, just to see what happens and then I can always return to contracting later? Is that a sensible option given the uncertainty about IR35?

If you were to be investigated for IR35 compliance and you had say three concurrent contracts all of which you were working on, then each would be separately looked at for IR35 compliance. Multiple concurrent contracts on it's own isn't a silver bullet I'm afraid.

[Blert596]

I've read a few posts but I'm new to this forum. I've been working through my limited company on and off for about 8 years in the pharmaceutical industry working for different companies.

I'm coming up to 2 yrs freelancing for one company only, which to be fair makes it look like I'm a full time employee, although I do not see it that way! HR do not reply to my request: will I be inside or outside IR35? I assume they will assign me inside IR35. Meanwhile, I have a few options: continue at risk (my contract is direct with the company but may need to get the contract amended), start contracting with more than one company (if that helps to avoid being inside IR35) or take a permanent job where I am currently working.

Given the current situation I think it may be better to go for the permanent job, even if it is only for short time, just to see what happens and then I can always return to contracting later? Is that a sensible option given the uncertainty about IR35?

The risk with going permie with the current client is that HMRC could see you as going from outside to inside at the same client/in the same role. I think the majority view is that this may well raise a flag to HMRC increasing the likelihood of being investigated. I suppose how much of an increase in risk you deem it is up to you.