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Contract review on existing contract for April 2020 changes

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    Contract review on existing contract for April 2020 changes

    I had my contract reviewed by QDOS before the commencement of my current gig and the client accepted all changes QDOS recommended.

    I am direct with the client, no agency or intermediary in-between.

    Client has offered renewal next month but I'm wondering if I should re-review the contract with QDOS in light of the April 2020 changes?

    Is there anything specific in the April 2020 changes that should be addressed in a contract review now that may not have been relevant before?

    My contract is coming up to 4 years now which was before even the public sector changes, hence my query.

    Look forward to the comments.

    thanks

    #2
    When does the renewal take you up to? Does it cross into April 2020 (or would any payments do so)? Have you discussed their plans for the IR35 determination for your role post April 2020?

    Comment


      #3
      Originally posted by Paralytic View Post
      When does the renewal take you up to? Does it cross into April 2020 (or would any payments do so)? Have you discussed their plans for the IR35 determination for your role post April 2020?
      The extension would take it beyond April 2020 (it could be a 12-month extension, 6 months minimum)
      Only spoke to HR who confirmed renewal has been agreed in principal but that the contract has to be IR35 friendly for the April 2020 changes.

      I really need to speak to the contracts person here and he's back next week, hence my prep.

      Comment


        #4
        Originally posted by ContractorBanking View Post
        The extension would take it beyond April 2020 (it could be a 12-month extension, 6 months minimum)
        Only spoke to HR who confirmed renewal has been agreed in principal but that the contract has to be IR35 friendly for the April 2020 changes.

        I really need to speak to the contracts person here and he's back next week, hence my prep.
        Its not about the contract "being IR35 friendly"; its about what determination they plan to deliver to you and HMRC for April 2020. They (and you) do know they have to do that, yes?

        Comment


          #5
          Originally posted by Paralytic View Post
          Its not about the contract "being IR35 friendly"; its about what determination they plan to deliver to you and HMRC for April 2020. They (and you) do know they have to do that, yes?
          This. It's whether or not the ROLE is IR35 friendly. Nothing to do with you or your contract. With 4 years under your belt both I think you are doing the right thing to prepare. I know time isn't an issue but you could be forgiven for asking why they haven't got a permie in for that period of time. A 6 or 12 month extension on top further adds to that.

          So speak to them as soon as you can before a determination is made and prepare to exit very quickly if they are leaning to inside. If, and that's a big if, HMRC do start with retrospective investigation then you've a hell of a lot of risk there.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            Why the guys above said plus, do what you can to force your actual working practises out of IR35, like:-

            1. Get a substitute in for a short time.
            2. Arrange your working schedule so that it is under your control.
            3. Work from your own business premises (or home office) when you want to and simply inform the client rather than ask them.

            There are obviously numerous more steps to ensure you are out of IR35 but these ones are key.

            I know some of these might sound difficult but you've been at the client for a long time now so hopefully you have a good relationship on which to base these points. It's all the more important given that you have been there 4 years. You've been there under the same contractual conditions, so - for example - getting a substitute in now should count as having always been able to do so, thereby protecting your outside-IR35 position for all those years.

            What happens after April 2020 is another matter.

            Comment


              #7
              See if QDOS will stand by their original determination for the renewal and back it up with insurance provision if you don't already have that. Presumably the original working practices haven't altered otherwise a new contract review will be required.

              See if client is willing to stand by QDOS determination before accepting the renewal. Make it so terms of the renewal include no further IR35 assessment until the next renewal, so no mid-contract change of determination is possible. Client's aren't obliged to make the determination before next April and only then at renewal or for new contracts, as far as I know.

              In the last 4 years the CEST has changed so it is a risk having the client make a determination before next April. See what process the client is planning on using to make the determinations so you can assess how it differs to what you did, in preparation for the next renewal if indeed this one goes ahead.
              Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

              Comment


                #8
                Originally posted by Hobosapien View Post
                See if QDOS will stand by their original determination for the renewal and back it up with insurance provision if you don't already have that. Presumably the original working practices haven't altered otherwise a new contract review will be required.

                See if client is willing to stand by QDOS determination before accepting the renewal. Make it so terms of the renewal include no further IR35 assessment until the next renewal, so no mid-contract change of determination is possible. Client's aren't obliged to make the determination before next April and only then at renewal or for new contracts, as far as I know.

                In the last 4 years the CEST has changed so it is a risk having the client make a determination before next April. See what process the client is planning on using to make the determinations so you can assess how it differs to what you did, in preparation for the next renewal if indeed this one goes ahead.
                Re. the bit I've emboldened above, where did you get that from?

                So if someone gets a 12 month extension from the start of March 2020, their client would not have to give a determination until the end Feb 2021? That doesn't seem right to me and contradicts the notion that any contract where a payment lands beyond April 2020 falls within the new rules.

                I simply can't see that being the case.
                Last edited by Paralytic; 7 October 2019, 13:37.

                Comment


                  #9
                  Originally posted by Paralytic View Post
                  Its not about the contract "being IR35 friendly"; its about what determination they plan to deliver to you and HMRC for April 2020. They (and you) do know they have to do that, yes?
                  That's correct, client needs to make the determination ahead of April 2020.

                  Again, will know more next week but I took the HR response as meaning the contract needs to reflect the working practices to ensure it fits in with the proposed determination.

                  It's a big assumption at this stage but client will state I am outside IR35.

                  Assuming that is correct and client informs HMRC and myself that I am considered to be outside IR35, where does that leave me in terms of future risk?
                  Also, what form is the determination and how is it reported to both myself and HMRC?

                  Comment


                    #10
                    Originally posted by Paralytic View Post
                    Re. the bit I've emboldened above, where did you get that from?

                    So if someone gets a 12 month extension from the start of March 2020, their client would not have to give a determination until the end Feb 2021? That doesn't seem right to me and contradicts the notion that any contract where a payment lands beyond April 2020 falls within the new rules.

                    I simply can't see that being the case.
                    You may be right but my understanding is based on the interpretation of the following document. HMRC may well have provided other information that clarifies the situation further for 'in-flight' contracts that cross into next April.

                    April 2020 changes to off-payroll working for clients - GOV.UK

                    You must pass on your determination on the date, or before the date, the contract is entered into. If the work starts later, give your determination before that later date.
                    A status determination statement issued before 6 April 2020 is valid under the new rules. If the working practices of the engagement change or you negotiate a new contract with the worker, you need to make sure that you re-check the rules to see if they still apply.
                    So going off the above a determination statement from the client received this year for a contract that goes beyond next April is valid, so no need to re-determine status mid-contract next April.

                    For the situation of payments received after 5th April 2020, I think that applies to cases where the client has made a determination ahead of April that the contract will become inside IR35 at renewal and the payment prior to the renewal (originally outside IR35) falls into being inside from April as the client has made the determination. If the client determines that the contract is still outside IR35 then the new rules apply but the tax position doesn't change, it's only when a client determines a contract is inside IR35 that the tax position changes.

                    Just my thoughts on this, I may well be wrong!
                    Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

                    Comment

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