Retrospectively opting out of IR35

[OwlHoot]

Suppose you opted to start a contract within IR35, and the contract terms were IR35 friendly (e.g. right of substitution etc), but the contract turned out to be genuinely outside IR35, e.g. no direction and control, would it be permissible to declare after say six months that it had not in fact been within IR35?

[jamesbrown]

Absolutely, the facts matter. However, you’d be asking for trouble w/r to investigation. As a minimum, you’d want the client to be onside, in writing. Also, remember that the responsibility/liability is scheduled to change on April 6. Edit: I am talking about moving forwards though, not tax “overpaid”.

[ladymuck]

Make sure you have collected the evidence to prove it if asked. If you can get the client to sign a letter of engagement, all the better.

[northernladuk]

I guess you can but thats just begging for an investigation.

Can't you get a new contract with a different title and all associated diligence and just declare that contract outside. Swapping inside to outside mid gig isn't a great idea by any means.

[Craig@Clarity]

Yes. As people have suggested, ensure you obtain evidence and written confirmation/agreement of your working practices. If the situation was all within the same tax year, HMRC won't be aware of your status unless you're carrying out a deemed salary calculation monthly.

[GhostofTarbera]

Yes, more chance getting hit by lightning than getting investigated


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[elsergiovolador]

Suppose you opted to start a contract within IR35, and the contract terms were IR35 friendly (e.g. right of substitution etc), but the contract turned out to be genuinely outside IR35, e.g. no direction and control, would it be permissible to declare after say six months that it had not in fact been within IR35?

It is extremely rare that contract will have no direction or control. For example if the project you do has to be integrated with client's systems or client has adopted some common principles like 12 factor and you adhere to that, then that is enough in the eyes of taxman to assume you work under direction and control.
If the client also won't agree to a substitute clause then you unlikely have any grounds to appeal. The client also won't have any incentive to change the status determination as it puts them at risk (from next April).

[TheCyclingProgrammer]

You're arguably at a higher risk of investigation by doing this so I'd say yes you can, but you should make extra sure a) it's financially worth the risk and b) you are very happy that you could defend yourself (with professional help) if you are investigated.

Personally I'd be looking to get some kind of written confirmation of arrangements from the client before I risked doing this.

[northernladuk]

Might be worth considering the future state as well. If there is any chance the client will deem you inside come April you are opening up a massive can of worms popping in and out in such a short period. We are guessing anyone staying at a gig that was outside then inside after April will be the lowest hanging fruits for HMRC and then having this history exposed. Not a great position at all.

[zonkkk]

Sounds like the client declared it inside to cover themselves against the now delayed IR35 changes, and they now say they "don't care".

What is their stance come April 2021?
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Later edit: posted before I saw nluk's post which basically says the same thing.