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teapot418
27th August 2015, 20:56
Going back to Kate Cotterell's advice when the discussion document was first published, she suggests (amongst other things)

2. Bring the document to the attention of your agencies and especially your clients who may be asked to “take on more of a role in ensuring that the right amount of employment taxes are paid” (as the discussion document states on page 8)

Revenue opens consultation to reform IR35 :: Contractor UK (http://www.contractoruk.com/news/0012145hmrc_unveils_ir35_discussion_document.html)

Has anyone raised this with their client? How did you pitch it?

It might be good to get some responses to the discussion from clients. Will have a think over the weekend, but if anyone has done this, or has any ideas, let's share them.

teapot418
28th August 2015, 09:46
Starter for 10. Feedback/suggestions gratefully received

Dear ClientBod

I don't know if you're aware of the intention to reform IR35 that was announced in the Summer budget? The government have produced a discussion document, and are inviting views from stakeholders. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/446242/Intermediaries_legislation_IR35-discussion_document.pdf

One of the main ideas for reform, is to pass the responsibility for determining whether IR35 should apply, and collecting taxes due, to the engager. (see p8 and 9). The IR35 legislation is very complex, and at present it is nigh on impossible to be 100% certain of one's status unless challenged and taken to tribunal. It seems to me that 'getting it wrong' is not a risk that many clients would be prepared to take, unless there were very clear guidelines on what constituted "in" or "out". If those guidelines existed, then it seems to me that there would be no need for the client to take that role at all.

I know you use the services of a lot of contractors, so I thought it may be something that ClientCo is interested in responding to. Responses have to be submitted by 30 September.

Please ask if you have any questions.

Regards
teapot.

eek
28th August 2015, 10:17
You also need a piece about expenses...

I'll try and get something on a webpage with timescales over the weekend (alongside a website)..

mudskipper
11th September 2015, 11:31
I've sent this, plus mention of T&S to client - feedback was encouraging (they thanked me and said they will look into it)

TheFaQQer
11th September 2015, 12:15
I added a couple of extras into mine:


Dear Mr Lumburgh,

I'm hoping that I've picked the right person to send this to - I'm fairly certain that it might be of interest to you.

I don't know if you're aware of the intention to reform IR35 that was announced in the Summer budget? The government have produced a discussion document, and are inviting views from stakeholders. See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/446242/Intermediaries_legislation_IR35-discussion_document.pdf

One of the main ideas for reform is to pass the responsibility for determining whether IR35 should apply and collecting taxes due to the engager. (pp8-9). The IR35 legislation is very ambiguous, and at present it is nigh on impossible to be 100% certain of one's status unless challenged and taken to tribunal. I guess that 'getting it wrong' is not a risk that many clients would be prepared to take, unless there were very clear guidelines on what constituted "in" or "out". If those guidelines existed, then it seems to me that there would be no need for the client to take that role at all.

The added burden of assessing the IR35 status of each contractor, and also to get involved in the process of ensuring the correct tax is paid strikes me as something that clients will not want to do, will not be geared up to do, and certainly shouldn't be involved with. Clients engage a flexible resource for good reasons, and need to be able to do so as quickly and easily as possible, and this added red tape would be another regulatory overhead which is neither wanted nor needed by businesses.

There is an additional consultation running in parallel which is looking to remove the ability for contractors to charge valid travel and subsistence expenses, which will also have an impact on the contractor market in the UK. If implemented in the next Finance Bill as planned, it would mean that contractors would not be able to claim their costs against their business for travelling and staying near client sites where necessary. If this goes ahead, then I would expect the pool of available candidates to shrink dramatically, and also a dramatic increase in rates so that those that need to travel can pay for that out of their post tax income rather than as a valid business expense.

I know you use the services of a lot of contractors, so I thought it may be something that Initech is interested in responding to. Responses have to be submitted by 30 September.



They weren't aware of the consultation but will look at the papers and consider a response, he says - so if we can get more multi-nationals to speak up as well then that would be great.

Pondlife
11th September 2015, 12:27
I added a couple of extras into mine:



They weren't aware of the consultation but will look at the papers and consider a response, he says - so if we can get more multi-nationals to speak up as well then that would be great.

Did you add the new coversheet?

TheFaQQer
11th September 2015, 12:33
Did you add the new coversheet?

No, is there a memo that I should have received about it?

stek
11th September 2015, 12:49
Did you add the new coversheet?

On the TPS reports? Didn't you get the email?

I'll just go right ahead and forward that email just so you know...

IR35 Avoider
11th September 2015, 14:05
I think you have to have be very self-absorbed to think that clients will care enough to read and understand even a one-sentence explanation of what IR35 is.

If any legislation is passed that would potentially cause them to have to assess status they will simply introduce a rule that will rule out any relationships where they might have to do that. For example they could specify that they will only take "temps" who are paid PAYE by the agency or an umbrella. (Yes I know you are the next Accenture, and it's a complete co-incidence that you started thinking of yourself as self-employed/a business at the time IR35 was introduced, but to the client you were, are, and always will be just a "temp.")

mudskipper
11th September 2015, 14:22
I think you have to have be very self-absorbed to think that clients will care enough to read and understand even a one-sentence explanation of what IR35 is.

If any legislation is passed that would potentially cause them to have to assess status they will simply introduce a rule that will rule out any relationships where they might have to do that. For example they could specify that they will only take "temps" who are paid PAYE by the agency or an umbrella. (Yes I know you are the next Accenture, and it's a complete co-incidence that you started thinking of yourself as self-employed/a business at the time IR35 was introduced, but to the client you were, are, and always will be just a "temp.")
My client relies heavily on contractors to deliver professional services to their clients (a different area to the one I'm in). They want to know about stuff that could affect the way they do this. Contractors are dealt with through their PS dept, not human remains, so there's at least a better than nil chance that they'll respond if they know about it.

TheFaQQer
11th September 2015, 14:30
I think you have to have be very self-absorbed to think that clients will care enough to read and understand even a one-sentence explanation of what IR35 is.

If any legislation is passed that would potentially cause them to have to assess status they will simply introduce a rule that will rule out any relationships where they might have to do that. For example they could specify that they will only take "temps" who are paid PAYE by the agency or an umbrella. (Yes I know you are the next Accenture, and it's a complete co-incidence that you started thinking of yourself as self-employed/a business at the time IR35 was introduced, but to the client you were, are, and always will be just a "temp.")

If they don't know, then they almost certainly will have to understand IR35 in the future - which is part of the argument. HMRC wants to either force the burden of assessment and tax collection onto the client (which they won't want) or to force them to change how they operate completely (which they may or may not care about).

My client engages hundreds of contractors, so if they need to start assessing them all then that impacts their operating model significantly - particularly since the vast majority of them are engaged directly as suppliers rather than via an agency. They find the resources for the roles, they fill the roles - so why should the government be able to dictate how they operate?

I'm sure many clients won't care about IR35 (until they have to care, of course) - but for those that do care (or should care) then waiting until the stable door is firmly shut and then saying "I wish more big businesses had said this is bad for them" or them saying "why didn't anyone warn us that we're going to need to change the way we work?" doesn't seem the right approach to be taking.

TheFaQQer
11th September 2015, 14:32
My client relies heavily on contractors to deliver professional services to their clients (a different area to the one I'm in). They want to know about stuff that could affect the way they do this. Contractors are dealt with through their PS dept, not human remains, so there's at least a better than nil chance that they'll respond if they know about it.

I deal with their dedicated "flexible resource centre", and then through accounts payable to get my invoices paid. It affects the whole way that that part of the business works, so even if they don't respond at least I've given them a heads up of what is coming.

javadude
16th September 2015, 08:40
My (direct) client is a Greek company. I doubt they care what HMRC are up to or want of them. I wonder how HMRC are going to force them to decide my SDC status for expenses and IR35?