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

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    Originally posted by sim2kuk View Post
    So an update on this...

    I received my contract this morning from the agency, asking me to sign it. I sent back the following email with the Resourcer and new Manager copied (I have changed company and people names in here):


    With time getting towards the IR35 deadline on April 5th 2020, there are a few things that both myself and the Client need to do to protect ourselves from any HMRC issues before I can sign this contract.

    Firstly, I have sent the contract through to my IR35 insurance supplier (QDOS), to confirm that the contract is, in their eyes, IR35 compliant, and doesn’t invalidate the insurance I have with them. This should have a fairly quick turnaround and I hope to hear back by the end of the week.

    Secondly, I need a determination from the Client to confirm that this role (Role name here), will never be, at any point, judged as Inside IR35, whether I am in the role or not. The reason for this is that I could be heavily penalised – even if I am no longer at the company when the determination happens. Derek – I don’t know how we get this determination done, or guaranteed, but if there is any chance that a payment for this role (with myself in it or not) goes beyond the 5th April, then there will be liability potentially from both sides (Income Tax from myself, Employers NI from the Client) if at any point the role is judged as Inside IR35.

    Thirdly, this contract needs to be done as a purely new contract and not an extension, locked to the specific role (Role Name Here). An extension would mean that any determination on IR35 to inside could also be traced back through to my previous contracts at the Client, which would mean a huge amount of liability from my side.


    I received the following reply from the Agency:

    Thank you for emailing.

    I do appreciate your concerns around IR35, and at this stage the Agency are working with the Client to consider their approach ahead of April next year. We anticipate communication will go out later this year to contractors.

    Your extension would run up until January 2020, with the legislation taking effect in April 2020, therefore we would progress as normal at this point.


    To which I replied:

    This issue is around if that role, not the contract, will exist into 2020. If the role is still there then the determination needs to be made. Contracts are irrelevant to the way the determination works.

    For example, if the role runs from now until June and is deemed in late March to be inside IR35, even if I left in January the whole role, since inception, would be implicated as Inside IR35, and HMRC can request details of all contractors that have served under that role and move them all within IR35, hence leaving me with a large tax bill, and the Client with an Employers NI bill.




    I have since spoken to Derek, the internal resourcer, and explained what I need, which I think I can sum up as the below:



    I need one of the following:

    Role is determined as Inside or Outside IR35 before contract is signed

    Or;

    Role must be excluded from an IR35 Determination

    And;

    Last payment for role to the Agency must not pass 5th April 2020

    And;

    If similar role is still needed, a new role with a different title and deliverables needs to be produced so that it is not the same as the role that has lapsed.




    Of course, I'm sure I'm going to be told I'm understanding this wrong, but does this make sense?
    I've just been offered a 6 month (potential to go to 12 month) for an interim project, with a 2 week notice period. Had the contract passed as outside by QDOS. However, client is unwilling at this moment in time to sign off as outside post April as they haven't got round to this process yet. They don't have many contractors and are a small house.

    Stressed as to know what to do as they are unhelpfully not willing to commit to it in writing as you have mentioned your client is doing. So start but then be worried about what happens post April.

    Poxy IR35!

    Comment


      If they are less than 50 people and other metrics they don't need to. Have they checked they even need to make a determination?
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        Originally posted by northernladuk View Post
        If they are less than 50 people and other metrics they don't need to. Have they checked they even need to make a determination?
        Perhaps I was exaggerating somewhat but the London operation only has 150 in the office and I'll be the 3rd contractor that they have.

        Comment


          Becoming permanent employee of the "agency" company

          hi

          Does the risk be equal or less (or bad) if the person changes from contractor to Perm employee of the "agency" company from April 2020?
          My perspective : the risk is same as becoming "inside IR35" and working as contractor.

          Any other perspective/risk based analysis would be highly appreciated

          Comment


            IR35: Planning for April 2020 – should I stay or should I go?

            We can’t help you with risk-based analysis because we don’t know all of your variables. That’s for you to know.

            But provided it’s a different agency and client you’ll likely be ok, if they are the same then you are likely more at risk.
            "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
            - Voltaire/Benjamin Franklin/Anne Frank...

            Comment


              Outside to PAYE/Retire?

              I have been contracting for 26 months Outside IR35 at a major bank. There have been 3 separate spells of not working and each has been a fresh contract.

              My current contract finishes early December as they have a furlough and there may be the option to go PAYE in the same role as a major project needs completion however understand the risk of retrospectively being assessed as the contract being inside IR35

              Fortunately i turned 55 recently and have a reasonable bank pension so can retire in December and was wondering whether retiring and closing down my company leaves me open to any retrospective IR35 assessment.

              Thoughts please.

              Thanks

              Comment


                Originally posted by Scanti View Post
                I have been contracting for 26 months Outside IR35 at a major bank. There have been 3 separate spells of not working and each has been a fresh contract.

                My current contract finishes early December as they have a furlough and there may be the option to go PAYE in the same role as a major project needs completion however understand the risk of retrospectively being assessed as the contract being inside IR35

                Fortunately i turned 55 recently and have a reasonable bank pension so can retire in December and was wondering whether retiring and closing down my company leaves me open to any retrospective IR35 assessment.

                Thoughts please.

                Thanks
                This shows that you haven't researched closing down a company. It's a business decision, everything stays the same until next April. Don't jump at ghosts and shadows.
                "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
                - Voltaire/Benjamin Franklin/Anne Frank...

                Comment


                  Originally posted by Paralytic View Post
                  You're right i am a pedant, but there was a serious point behind this. The risk between staying with a client till, say, Feb 2020 where the client have said they will not make a determination, and one who has made an inside determination or may make an inside determination before that date, is quite distinct.
                  I must admit, having read much on this subject, I am not understanding why there is a fear of staying at a contract up to or just past April 2020. What exactly is to be gained by jumping out of a frying pan and into a potential fire?

                  It is not like the world in a new contract would be any rosier.

                  Am I right in assuming that people wishing to bring about a full stop to a contract pre April is in case, post April, they are deemed Inside? And that, once judged, one 'believes' there will then follow a retrospective snap judgment into statuses during the entire period of same contract?

                  I only ask because such client judgments are so far to be believed to be knee jerk reactions based on nothing but fear of the HMRC's wrath. And IF the HMRC wanted to investigate such a scenario, wouldn't we all just invoke IPSE's help in the same way as one would have done to date?

                  Sorry if I am missing a Big Fat Point.

                  Comment


                    Originally posted by simes View Post
                    I must admit, having read much on this subject, I am not understanding why there is a fear of staying at a contract up to or just past April 2020. What exactly is to be gained by jumping out of a frying pan and into a potential fire?

                    It is not like the world in a new contract would be any rosier.

                    Am I right in assuming that people wishing to bring about a full stop to a contract pre April is in case, post April, they are deemed Inside? And that, once judged, one 'believes' there will then follow a retrospective snap judgment into statuses during the entire period of same contract?

                    I only ask because such client judgments are so far to be believed to be knee jerk reactions based on nothing but fear of the HMRC's wrath. And IF the HMRC wanted to investigate such a scenario, wouldn't we all just invoke IPSE's help in the same way as one would have done to date?

                    Sorry if I am missing a Big Fat Point.
                    All your contracts to date have been assessed as outside IR35? Or have you not bothered ?


                    Sent from my iPhone using Contractor UK Forum

                    Comment


                      You've missed, or ignored, my point.

                      Irrespective of whether I have had my contracts deemed outside (different point), and irrespective of whether Qdos has deemed them outside, it will be the client who decides post April. Making all of that irrelevant, I believe.

                      So, again, for the benefit of GoT, once the client has deemed a decision, based entirely on their business needs / worries, what Actual difference does that make to us if HMRC come a-knocking?

                      I am stating, we just invoke IPSE's help and away we go?

                      Thoughts? (On just this point please)

                      Comment

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