Hi,
I would like your opinion on the following scenarios I have seen companies/agencies/contractors taking to avoid falling inside IR35:
1. Make sure the written contract says enough of the right "stuff". Basically, get it reviewed and the amendments made.
The contract says the client will accept a substitute but thats not actually practical - where would the contractor find someone else at short notice and secondly, the client is unprepared for someone new to just turn up one day and continue as if nothing happened. The end dates for these contracts are May, so perhaps they are hoping that they won't continue and HMRC won't notice for such a small time period.
2. UK client, UK agency, UK PSC, worker is EU national, living in EU.
The agency really pushed for this (last revenue stream as all the other contractors chose to go 12 month PAYE) and said they would take the hit if HMRC investigates and issues a fine. I don't think the client is off the hook though, and would take a reputational damage if an investigation finds the worker is inside ir35. I think they are arguing that the contractor is a non-UK national not living in the UK so outside IR35 (not super sure about this as I haven't seen the contract but I have spoken to the contractor).
I should make clear that the actual working practices are no different to a perm, even if the contract says otherwise. The remote aspect of the position though is highlighted as being something potentially outside IR35.
What do you think?
I would like your opinion on the following scenarios I have seen companies/agencies/contractors taking to avoid falling inside IR35:
1. Make sure the written contract says enough of the right "stuff". Basically, get it reviewed and the amendments made.
The contract says the client will accept a substitute but thats not actually practical - where would the contractor find someone else at short notice and secondly, the client is unprepared for someone new to just turn up one day and continue as if nothing happened. The end dates for these contracts are May, so perhaps they are hoping that they won't continue and HMRC won't notice for such a small time period.
2. UK client, UK agency, UK PSC, worker is EU national, living in EU.
The agency really pushed for this (last revenue stream as all the other contractors chose to go 12 month PAYE) and said they would take the hit if HMRC investigates and issues a fine. I don't think the client is off the hook though, and would take a reputational damage if an investigation finds the worker is inside ir35. I think they are arguing that the contractor is a non-UK national not living in the UK so outside IR35 (not super sure about this as I haven't seen the contract but I have spoken to the contractor).
I should make clear that the actual working practices are no different to a perm, even if the contract says otherwise. The remote aspect of the position though is highlighted as being something potentially outside IR35.
What do you think?
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