IR35: Backdated complications if new offer is inside IR35 IR35: Backdated complications if new offer is inside IR35 - Page 2
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  1. #11

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    Quote Originally Posted by Liberator View Post
    Time with client on it's own is not a determining factor wrt IR35 though, it's about the contract and the working practices of the contractor surely and we don't know that. IF working practices change and IF the contract is changed significantly e.g. removal of sub clause, addition of scope of work then I admit there could still be a red flag there but there could be an element of justification for the change in IR35 status?
    Correct but it determines the amount of backdated PAYE tax you will be liable for. Good luck arguing arguing your outside when HMRC have an inside determination.

  2. #12

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    Quote Originally Posted by sojan View Post
    have been working 5 years within same client/company via an agency. So the explicit assumption is all contractors will be inside IR35 from next year as per the client. The agency is planning to replicate the same as they are not bothered to take any risk. We are happy with client & agency and is offered an extra £25 per day rate to help us. So most of us are preparing ourselves to move inside IR35 from next year.

    But the key query is,
    1. If there is a change in IR35 determination from next year, will HMRC have an assertion to tag us as inside IR35 for previous 5 years? i.e. will this have backdated implications?
    2. Would HMRC have enough data to pick and isolate "directors" who have shifted from limited company to umbrella company?
    3. Is there any purpose of retaining existing limited company or can we close down after moving to umbrella company?
    It sounds like you are exactly the type of permie-tractor HMRC are targeting with this change in determination. The question is what is your appetite to risk?

  3. #13

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    Quote Originally Posted by northernladuk View Post
    That theory might be true but there is a lot going against it.

    For a start, one of HMRCs only wins against an IT contractor was the JLJ case which fell apart due to time on site eroding his situation. I've done 4 years on site and it got to the point I had to leave for the same reasons. I struggle to think of any situation I've seen where people are on site 3 years and are not sitting ducks. Part and parcel, IMO, is enivitable however hard you try.

    <snip>
    This is a good point and it's likely that many contractors and clients will get too comfortable the longer a contract runs.

    I've been wary of this, having been contracted to one client for a quite a few years now. As the years wore on, I've made myself more and more of a pain in the arse to the client, to the point that the I.T. director once blocked my exit from the office trying to insist I work "on-site" that Friday. Obviously I declined, referring him to the contract which states that the Consultancy can work when and where it chooses to

    The contract started as 5 days on site and now, years later, I am never on site, and only occasionally in touch with the client during the day. I've tried to do what I can to remain outside of IR35, including getting a Sub in for a short time, a few months ago. As I see it, I am clearly outside IR35, but the several-year stint concerns me still. And furthermore, I have no idea what the client thinks of my 'status' - and that is the real issue.

  4. #14

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    Can't see myself in this situation, but if I were, and I wanted to stay, I'd ask them to just not make a determination on my contract and go brolly now instead. If you are brolly they don't have to make a determination.

    Get the company closed before April. My guess is HMRC will be chasing the people who haven't even taken those precautions, and by the time they get around to you, if they do, the company will be closed, and they'll shrug and move on to the next easy target.

  5. #15

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    Quote Originally Posted by ChimpMaster View Post
    This is a good point and it's likely that many contractors and clients will get too comfortable the longer a contract runs.

    I've been wary of this, having been contracted to one client for a quite a few years now. As the years wore on, I've made myself more and more of a pain in the arse to the client, to the point that the I.T. director once blocked my exit from the office trying to insist I work "on-site" that Friday. Obviously I declined, referring him to the contract which states that the Consultancy can work when and where it chooses to

    The contract started as 5 days on site and now, years later, I am never on site, and only occasionally in touch with the client during the day. I've tried to do what I can to remain outside of IR35, including getting a Sub in for a short time, a few months ago. As I see it, I am clearly outside IR35, but the several-year stint concerns me still. And furthermore, I have no idea what the client thinks of my 'status' - and that is the real issue.
    I hope you documented that exchange with the IT director. That should be golden in an IR35 case, as well as the sub.

  6. #16

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    Quote Originally Posted by WordIsBond View Post
    Can't see myself in this situation, but if I were, and I wanted to stay, I'd ask them to just not make a determination on my contract and go brolly now instead. If you are brolly they don't have to make a determination.

    Get the company closed before April. My guess is HMRC will be chasing the people who haven't even taken those precautions, and by the time they get around to you, if they do, the company will be closed, and they'll shrug and move on to the next easy target.
    That's not a bad idea re going brolly now. But what if you're waiting for your client to review working practices and contracts for it's contractors. It could be that it decides that after beefing up contract and working practices that it is going to agree that you're outside going forward?

  7. #17

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    Quote Originally Posted by Liberator View Post
    That's not a bad idea re going brolly now. But what if you're waiting for your client to review working practices and contracts for it's contractors. It could be that it decides that after beefing up contract and working practices that it is going to agree that you're outside going forward?
    Could do....but what if they don't?
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  8. #18

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    Back to the OP... I'd be looking to leave. Obviously an easy thing to say and have no idea of circumstance, but I think I'd risk a month or two or three of no income rather than 5 years of backdated tax.

  9. #19

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    Quote Originally Posted by Liberator View Post
    That's not a bad idea re going brolly now. But what if you're waiting for your client to review working practices and contracts for it's contractors. It could be that it decides that after beefing up contract and working practices that it is going to agree that you're outside going forward?
    I was addressing OP's situation where it appears that A) the decision has already pretty much been made and B) he seems to want to stay. So, if that's the way the land lies, his best chance is to go brolly before the determination is made.

    If you think there's a chance of getting an outside determination, sure, you might want to stick around. But in that case I think it would be wise to be prepared to walk as soon as you are told it is going the wrong way.

  10. #20

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    Quote Originally Posted by WordIsBond View Post
    Can't see myself in this situation, but if I were, and I wanted to stay, I'd ask them to just not make a determination on my contract and go brolly now instead. If you are brolly they don't have to make a determination.
    ... but how does the client know you are working through a brolly?

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