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    Hi all,

    I wonder if someone can help a newbie here. I have done tons of reading but not quite landing to the right decision.

    Currently providing service to an end client through an agency, i.e. I have contract with agency, I invoice agency, they invoice client, and then agency pays me, weekly. My old contract was professionally reviewed by Larsen Howie and deemed outside IR35 (issued by Agency to the Ltd company).

    Current contract started 16/9/2020 and ends on 16th March and have been offered an extension to lead another project within HR domain, previous contract was in different discipline. However, with no surprise, they have now deemed the role to be inside IR35.

    Questions -

    • On my extension, essentially, everything remains the same, i.e. day rate, place of work with no need to commute to office etc, having luxury of choosing my hours etc etc. - are there any tell tell signs I should look out for in new contract?

    • Should I be worried about backdated enquiries if this contract extension is done with similar day rates and level etc?

    • I a currently with Gorilla Accounting who offer Umbrella Services, however, are not FCSA registered/recognised. They have been amazingly good with accountancy side of the things since I have moved and their calculation under UC is fairly similar to that of other FCSA accredited agencies I have spoken to. Is this a red flag given no FCSA accreditation?


    Thank you and any help/steer would be most appreciated.

    Rp

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    Current contract started 16/9/2020 and ends on 16th March and have been offered an extension to lead another project within HR domain, previous contract was in different discipline. However, with no surprise, they have now deemed the role to be inside IR35.
    So you are still a project manager, just different project? So your role is exactly the same. Which project you work on shouldn't make a difference. Its what PMs do and so do perms.

    Questions -

    * On my extension, essentially, everything remains the same, i.e. day rate, place of work with no need to commute to office etc, having luxury of choosing my hours etc etc. - are there any tell tell signs I should look out for in new contract?
    Nothing in there is relevant at all. It doesn't stay the same as the contract is now with the agent and umbrella. You are now contracted as an employee to the brolly.

    What is keybis that you are doing the same role the client deems as inside but you claimed as outside. Thst makes you low hanging fruit for HMRC. The client has effectively told them you weren't outside before really.
    * Should I be worried about backdated enquiries if this contract extension is done with similar day rates and level etc?
    We don't know if they will retrospectively chase outside to inside gigs but it certainly puts you in the highest risk category and the easiest to win if you they do decide to investigate. Again day rates etc are irrelevant. You are carrying out the same role.

    There is a sticky about whether you should stay or go which explains the risks. Personally I'd say you should be leaving although it's already a bit late if the client have admitted your role is inside but at least if you go before you start it you won't be in HMRCs cross hairs so the risk is lessened a little.
    * I a currently with Gorilla Accounting who offer Umbrella Services, however, are not FCSA registered/recognised. They have been amazingly good with accountancy side of the things since I have moved and their calculation under UC is fairly similar to that of other FCSA accredited agencies I have spoken to. Is this a red flag given no FCSA accreditation?
    The accreditation proves the brolly is legitimate but it's very difficult to get and appears to be a bit of a cartel. You've got to have a few thousand contractors to get it but they can't get the contractors if they don't have it so sounds almost impossible to get. There are setups out there that are probably perfectly good and in many cases better. There have been a lot of complaints about giant, paystream etc. They are compliant, just not so great at what they do. Gorilla isn't Fcsa registered but are a reputable firm doing it by the book. Lucy at Clarity isn't accredited either because of the silly hoops but I don't think there are many brollies out there where you'll get treated better.

    The problem you have is the agency might not let you use your choice of firm. In many cases they will fall back to FCSA accesiation because they don't have the time or inclination to do full diligence.

    Check with the agent who you can use as the choice might be out of your hand.
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    Thank you for taking time explaining, it is much appreciated.

    Quote Originally Posted by northernladuk View Post
    So you are still a project manager, just different project? So your role is exactly the same. Which project you work on shouldn't make a difference. Its what PMs do and so do perms.
    I somewhat disagree in that my role is not a mere oversight role. In my initial contract, I oversaw the transformation of Reward where as next one (the proposed extension) is to transform Performance Management. Two different skill set and two different sets of responsibilities. I will speak to the agency and see if the role can be worded and title is reflective of [essentially a different] role. Again, I am not sure if that helps tiniest bit!

    Quote Originally Posted by northernladuk View Post
    Nothing in there is relevant at all. It doesn't stay the same as the contract is now with the agent and umbrella. You are now contracted as an employee to the brolly.
    This is what baffles me the most and yes, guilty as charged for not knowing much as I should. Logically speaking, my contract was initially with Agency who provided a contract which was deemed outside, reviewed as outside and last bit, insured as outside IR35. If Service receiver now deems the role to be inside, should that be the issue between service receiver and the agency?

    Quote Originally Posted by northernladuk View Post
    What is key is that you are doing the same role the client deems as inside but you claimed as outside. That makes you low hanging fruit for HMRC. The client has effectively told them you weren't outside before really.

    We don't know if they will retrospectively chase outside to inside gigs but it certainly puts you in the highest risk category and the easiest to win if you they do decide to investigate. Again day rates etc are irrelevant. You are carrying out the same role.
    A really daft one but does HMRC typically chase Tax or NI or both?? I have insurance with Qdos on the basis that LH confirming the contract to be outside by country mile, so hopefully it shall do it. Just wondering a contract that I did prior to this, different receiver of the service and different agency as well, was also out of IR35 but I dont have cover

    Quote Originally Posted by northernladuk View Post
    There is a sticky about whether you should stay or go which explains the risks. Personally I'd say you should be leaving although it's already a bit late if the client have admitted your role is inside but at least if you go before you start it you won't be in HMRCs cross hairs so the risk is lessened a little.

    The accreditation proves the brolly is legitimate but it's very difficult to get and appears to be a bit of a cartel. You've got to have a few thousand contractors to get it but they can't get the contractors if they don't have it so sounds almost impossible to get. There are setups out there that are probably perfectly good and in many cases better. There have been a lot of complaints about giant, paystream etc. They are compliant, just not so great at what they do. Gorilla isn't Fcsa registered but are a reputable firm doing it by the book. Lucy at Clarity isn't accredited either because of the silly hoops but I don't think there are many brollies out there where you'll get treated better.


    The problem you have is the agency might not let you use your choice of firm. In many cases they will fall back to FCSA accesiation because they don't have the time or inclination to do full diligence.

    Check with the agent who you can use as the choice might be out of your hand.

    I would be interested to hear about anyone who might have used Gorilla for brolly... I have asked the agency who are okay for me to choose choice of brolly.

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    And now the cracks are starting to show. Need to re-think some of the stuff in here very quickly.

    I somewhat disagree in that my role is not a mere oversight role. In my initial contract, I oversaw the transformation of Reward where as next one (the proposed extension) is to transform Performance Management. Two different skill set and two different sets of responsibilities.
    That's fine and only you know but the fact you are doing to transformation starts to look a bit similar, but I'm only guessing so your call. What I will add though is that the working practices may be similar. No substitution, D&C and MoO (or lack of) are generic and not aligned to a skill so worth bearing this in mind.
    I will speak to the agency and see if the role can be worded and title is reflective of [essentially a different] role. Again, I am not sure if that helps tiniest bit!
    It won't make any difference to your chances of getting investigated. HMRC will see you outside and then in and come sniffing. They will see the different roles when they get there which will help but will ask about your working practices. They could treat you like a perm in both roles regardless of what is delivered.
    Certainly worth the effort to demonstrate the two roles are as different as possible on paper though. Again, though, if a PM is delivering a product and they move to a completely different product they are still a PM.

    This is what baffles me the most and yes, guilty as charged for not knowing much as I should. Logically speaking, my contract was initially with Agency who provided a contract which was deemed outside, reviewed as outside and last bit, insured as outside IR35. If Service receiver now deems the role to be inside, should that be the issue between service receiver and the agency?
    Hell no. It's your tax they are coming after.

    A really daft one but does HMRC typically chase Tax or NI or both??
    They will come after everything that you didn't pay which you should have if you were inside. It will also include penalties and interest.
    I have insurance with Qdos on the basis that LH confirming the contract to be outside by country mile, so hopefully it shall do it.
    Erm, if the client has determine the role you are doing is inside so admitting the old one was as well QDOS aren't likely to defend it as there is no chance of winning so guess they won't cover the tax either. Don't quote me on that though. I can't see them paying out tax on a situation they won't defend though.
    Just wondering a contract that I did prior to this, different receiver of the service and different agency as well, was also out of IR35 but I dont have cover
    IR35 investigations are on a contract by contract basis. They also don't have an inside determination to nail you with on that one so would have to investigate it the old way. They've plenty of free money coming in from the outside inside brigade to bother with for now.

    Couple of points you really need to brush up and understand better there bearing on mind the amounts of tax potentially owed, the size and scope of the changes and this is your living if you don't mine me saying. It's only 6 weeks away.

    I would be interested to hear about anyone who might have used Gorilla for brolly... I have asked the agency who are okay for me to choose choice of brolly.
    I am with Gorilla and did an inside gig a few years ago. The thing I wanted most was someone with a pension offering I could put anything I want it to mitigate the tax which Gorilla didn't offer. Dunno if they now or not.

    Give Lucy at Clarity Umbrella a call, they have a pension offering where you can put as much as you want in up to the limit (more if you don't mind the loss of tax benefit on the extra money) so reduced my tax paid. Ask her if the iPad offer is still on as well.
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    Quote Originally Posted by northernladuk View Post
    And now the cracks are starting to show. Need to re-think some of the stuff in here very quickly.


    That's fine and only you know but the fact you are doing to transformation starts to look a bit similar, but I'm only guessing so your call. What I will add though is that the working practices may be similar. No substitution, D&C and MoO (or lack of) are generic and not aligned to a skill so worth bearing this in mind.


    It won't make any difference to your chances of getting investigated. HMRC will see you outside and then in and come sniffing. They will see the different roles when they get there which will help but will ask about your working practices. They could treat you like a perm in both roles regardless of what is delivered.
    Certainly worth the effort to demonstrate the two roles are as different as possible on paper though. Again, though, if a PM is delivering a product and they move to a completely different product they are still a PM.


    Hell no. It's your tax they are coming after.


    They will come after everything that you didn't pay which you should have if you were inside. It will also include penalties and interest.

    Erm, if the client has determine the role you are doing is inside so admitting the old one was as well QDOS aren't likely to defend it as there is no chance of winning so guess they won't cover the tax either. Don't quote me on that though. I can't see them paying out tax on a situation they won't defend though.

    IR35 investigations are on a contract by contract basis. They also don't have an inside determination to nail you with on that one so would have to investigate it the old way. They've plenty of free money coming in from the outside inside brigade to bother with for now.

    Couple of points you really need to brush up and understand better there bearing on mind the amounts of tax potentially owed, the size and scope of the changes and this is your living if you don't mine me saying. It's only 6 weeks away.



    I am with Gorilla and did an inside gig a few years ago. The thing I wanted most was someone with a pension offering I could put anything I want it to mitigate the tax which Gorilla didn't offer. Dunno if they now or not.

    Give Lucy at Clarity Umbrella a call, they have a pension offering where you can put as much as you want in up to the limit (more if you don't mind the loss of tax benefit on the extra money) so reduced my tax paid. Ask her if the iPad offer is still on as well.
    Note - it's not an iPad offer for joining - it's an iPad offer for referrals that NLUK hasn't qualified for but I have.. If you do call up Lucy just say that Eek NLUK referred you.

    As for the rest NLUK is right - the role would be (to a none expert) identical to the previous role so HMRC would think it's inside.

    It's up to you to determine if the risk is significant to be worth the risk of NI and income tax on 6 months of income.
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    Quote Originally Posted by northernladuk View Post
    That's fine and only you know but the fact you are doing to transformation starts to look a bit similar, but I'm only guessing so your call. What I will add though is that the working practices may be similar. No substitution, D&C and MoO (or lack of) are generic and not aligned to a skill so worth bearing this in mind.
    My previous contract passed on Substitution (as contract included possibility of substitution) D&C and MoO (clauses together demonstrate that there is no intended mutuality of obligations between the parties (no expectation of an offer of work to be made
    or accepted by either party). This is a positive IR35 indicator). But your insights are appreciated.

    Quote Originally Posted by northernladuk View Post
    It won't make any difference to your chances of getting investigated. HMRC will see you outside and then in and come sniffing. They will see the different roles when they get there which will help but will ask about your working practices. They could treat you like a perm in both roles regardless of what is delivered.
    Certainly worth the effort to demonstrate the two roles are as different as possible on paper though. Again, though, if a PM is delivering a product and they move to a completely different product they are still a PM.
    I totally see where you are coming from, and logically, you are right every bit. Only way I see digging myself out of this is, as you said, have as different role as possible on paper to provide myself a fighting chance. I am hopeful, this would be fine.[/QUOTE]

    Quote Originally Posted by northernladuk View Post
    Hell no. It's your tax they are coming after. They will come after everything that you didn't pay which you should have if you were inside. It will also include penalties and interest.
    This is almost impossible to untangle. may be this is cart before the horses, but how am I or anyone suppose to work out what can that be with so many variables, including, expenses, dividends, self employment tax paid etc etc?

    Quote Originally Posted by northernladuk View Post
    Erm, if the client has determine the role you are doing is inside so admitting the old one was as well QDOS aren't likely to defend it as there is no chance of winning so guess they won't cover the tax either. Don't quote me on that though. I can't see them paying out tax on a situation they won't defend though.
    I get it but guess this is unethical at best given they have sold me a product claiming to provide a cover for such instances providing independent assessment of a contract confirming to be outside!

    IR35 investigations are on a contract by contract basis. They also don't have an inside determination to nail you with on that one so would have to investigate it the old way. They've plenty of free money coming in from the outside inside brigade to bother with for now.

    Quote Originally Posted by northernladuk View Post
    Couple of points you really need to brush up and understand better there bearing on mind the amounts of tax potentially owed, the size and scope of the changes and this is your living if you don't mine me saying. It's only 6 weeks away.
    I truly appreciate candid advice, and I am the first one to admit my lack of knowledge, especially that I work in HR domain. Again, it is almost impossible to make a decision on that appetite to risk not knowing what it can be wrt tax owed etc, again, I make reference to Dividends takeh, SE tax paid etc etc..

    Before the extension, I was planning to even close the Ltd and move to States for future work, I wonder how that goes down if I strike off the company.


    Quote Originally Posted by northernladuk View Post
    I am with Gorilla and did an inside gig a few years ago. The thing I wanted most was someone with a pension offering I could put anything I want it to mitigate the tax which Gorilla didn't offer. Dunno if they now or not.

    Give Lucy at Clarity Umbrella a call, they have a pension offering where you can put as much as you want in up to the limit (more if you don't mind the loss of tax benefit on the extra money) so reduced my tax paid. Ask her if the iPad offer is still on as well.
    Awesome, I do like the sound of it (both Gorilla and Lucy @ Clarity).

    Rp x

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    This is almost impossible to untangle. may be this is cart before the horses, but how am I or anyone suppose to work out what can that be with so many variables, including, expenses, dividends, self employment tax paid etc etc?
    Its not really. None of those matter. They will take your total income, apply PAYE level tax to see what you should have paid, take off what you did pay and you owe them the rest with interest.

    I get it but guess this is unethical at best given they have sold me a product claiming to provide a cover for such instances providing independent assessment of a contract confirming to be outside!
    Not really again. I am not aware they have ever refused and its not thing they will do lightly as it would be commercial suicide but its there to protect themselves against factors they can't control. If they do a contract check and you don't take care on site and put yourself inside by acting like a permie they shouldn't be held liable. Contract says subs and no D&C, come an investigation they find out the client has refused a sub and you have been quite happily directed by the client whsly should they defend a lost cause that's not their problem. Not really unethical, just the nature of this type of insurance. Bit like house insurance won't pay out if you leave your doors and windows open and alarm off at night etc.
    Last edited by northernladuk; 16th February 2020 at 21:58.
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    Quote Originally Posted by northernladuk View Post
    Its not really. None of those matter. They will take your total income, apply PAYE level tax to see what you should have paid, take off what you did pay and you owe them the rest with interest.



    Not really again. I am not aware they have ever refused and its not thing they will do lightly as it would be commercial suicide but its there to protect themselves against factors they can't control. If they do a contract check and you don't take care on site and put yourself inside by acting like a permie they shouldn't be held liable. Contract says subs and no D&C, come an investigation they find out the client has refused a sub and you have been quite happily directed by the client whsly should they defend a lost cause that's not their problem. Not really unethical, just the nature of this type of insurance. Bit like house insurance won't pay out if you leave your doors and windows open and alarm off at night etc.
    So, in effect, loose loose, or is it just me? If I am [now] deemed as an employee, what about the corporation tax I paid? If my total income, in essence, all the invoices I raised, if HMRC wants PAYE tax on it, what about CT I'd have paid?

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    Quote Originally Posted by rp83 View Post
    So, in effect, loose loose, or is it just me? If I am [now] deemed as an employee, what about the corporation tax I paid? If my total income, in essence, all the invoices I raised, if HMRC wants PAYE tax on it, what about CT I'd have paid?
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    Thank you, I appreciate it.

    Just been talking to the agent this am, and have been told that they can work on ending the contract on 22/3, I had pre planned holidays anyways from 24/3 - 3/4 so this works perfectly.

    On 6th April or beyond, new contract starts which reflects the change in the role, new title etc etc. They have also offered a FTC directly with the company - I am now considering taking break and then start new contract (as oppose to extending current) in April. I wonder, that along with a direct FTC may be a better option/alternative to that of extension?

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