Being a GM and IR35

[Boston4315]

Yes, you could do this, although it is more common to see the other way around

However, bear in mind that the absolute best this gets you is the ability to pursue the client after HMRC have already bent you over. In other words, these contractual clauses mean absolutely nothing to HMRC. If you are doing the assessment, then YourCo is liable for any error and any attempt to recover the tax/penalties/interest from the client would be ex post. So YourCo would pay initially. Also, bear in mind that ClientCo may not even be around to pursue. In summary, it mitigates, but does not eliminate risk.

JB, what is the position if ClientCo is doing the assessment? I.e it's not small?

[jamesbrown]

I was keen to understand what other people's views were on the hope that I might get a better understanding of the rules, or confirmation that I'm on the right track. Would prefer to not waste money on a legal review if its a non starter.

What did you mean by this, then?

I've reviewed it and had it legally reviewed and it falls outside IR35.

So you haven't had an IR35 review (contract and working practices) by an IR35 expert?

That is what you should do. There's nothing we can provide you with here that will clarify, improve or replace that expert opinion because the reviewer is an expert and they have all the facts.

[Boston4315]

What did you mean by this, then?



So you haven't had an IR35 review (contract and working practices) by an IR35 expert?

That is what you should do. There's nothing we can provide you with here that will clarify, improve or replace that expert opinion because the reviewer is an expert and they have all the facts.

All of the contract has been reviewed with the exception of the scope of service,which hasn't been finalised yet.

[jamesbrown]

JB, what is the position if ClientCo is doing the assessment? I.e it's not small?

If the client is providing the status determination statement (SDS) post April 2021, then it really doesn't matter what your own review says - whatever the client says is reality for you. Of course, even if you are responsible for the assessment, then the client's opinion still matters because it is hard to justify an outside determination when the client thinks otherwise. If the client is not a small company and is not part of a fully overseas supply chain, then the client is responsible for the SDS from April 6 2021. In that case, it is better to discover their opinion now (in writing); if they think your contract is inside from April 6 2021, then it is almost certainly inside now too.

[jamesbrown]

All of the contract has been reviewed with the exception of the scope of service,which hasn't been finalised yet.

I see. That shouldn't be a problem. It is good to have a statement of work (the presence of this is a good thing), but the details are unlikely to matter much for review purposes. In any case, the reviewer wouldn't have given you an outside determination unless they were confident in that opinion (they might have given you a borderline/conditional one, but it doesn't sound like it). I would simply trust the reviewer, assuming it was an IR35 expert and they considered your proposed working practices too.

[NotAllThere]

The lack of input into employee holidays, performance management etc. is not an indicator against IR35. Plenty of managers at senior level are not involved with "pay and rations".

[Lance]

already answered

I’m not sure it was at this point.
I’m not so sure is it is yet either.
The OP asks what the position would be.

For me this is the most important question as it’s about long term liability and therefore any discussion now could well be moot.

If the client is large then OP should get the SDS now. That’s reasonable given the proximity of the change.

Of the client is small then the OP needs to get the paperwork finalised and a proper review done, and ensure the client is aware that the working practises will meet the contracted terms.

For me though, the biggest alarm bell, is a senior manager position, outside IR35, and the OP not dictating the terms of the engagement. Something on that doesn’t stack up.
In my experience, when a consultant provides intern senior management they dictate the whole thing.

[northernladuk]

This is an interesting position where I am absolutely certain the OP will get an outside determination but I'm pretty sure they'll lose if they get caught. I struggle to see how a position like that can be outside but as long as it gets the relevant clauses in the contract I expect it will pass.

If the OP is doing hisn own CEST I'm sure it will say outside as people are generally not being realistic when ticking the boxes.

IMO this is a nightmare role IR35 wise and I'd be doing everything I could to avoid it.

[Lance]

This is an interesting position where I am absolutely certain the OP will get an outside determination but I'm pretty sure they'll lose if they get caught. I struggle to see how a position like that can be outside but as long as it gets the relevant clauses in the contract I expect it will pass.

If the OP is doing hisn own CEST I'm sure it will say outside as people are generally not being realistic when ticking the boxes.

IMO this is a nightmare role IR35 wise and I'd be doing everything I could to avoid it.

likewise.

But I have met across the years many interim managers and most of them are pretty switched on (as you'd expect). IR35 clearly has this sort of role as its target, but whether it can be made to stick (it hasn't so far) is a different question. Hence why the client size and SDS are key. If the client is small then the changes will be BAU for these people, but most small companies can't afford to pay £1k+ a day.

[Fred Bloggs]

It's really very simple and there can be no doubt that a general manager role is by it's very name part and parcel of the company. I think declaring outside of IR35 for a role like this is very high risk. The chances of being caught? Probably low, but make no mistake, it's likely to be absolutely part and parcel of company management. Is it a risk worth taking?