Advice on this scenario please

[hollyblue]

My current contract started 2 weeks ago, the engager agreed terms with me around my working practice which would place me outside but are saying they've made a blanket decision (my words not theirs!) on all contractors of inside.

My former engager, which I left 4 months ago, has offered me a return to them with an outside determination. An agency (not the one putting me forward for the role) has told me that no other PSBs in this field (not IT) have deemed staff outside.

I'm going to be honest, not all of my former contracts (including when I last worked for this former engager) have truly been outside so I know I am likely to be in the doo-doo's if I were to be investigated.

I don't want to seem ungrateful! but ... I am worried whether I am at more risk of being investigated if I go back to my former client on an outside determination as they seem to be a lone voice singing in the dark! They have completed the ESS tool and sent me a copy of the results which state the Legislation does not apply. I am content with the answers they have given and obviously so are they. I understand how I need to approach the contract in order to be outside going forward in terms of working practice.

My understanding of the Agency Reporting Regs, which is very limited, is that the information that is reported to HMRC about me is merely my NI number? and not who my engager is or my line of work. Would that be correct.

What I am concerned about is a retrospective investigation and I don't want to encourage it. If it happens, it happens, but I dont want to be waving the flag which says come and get me!

Thanks for any advice from people more in the know than me.

[Finance]

Best to stay outside if you can.
If your former client is willing to rule you out without obviously answering any of the questions fraudulently then you will probably be safe.

[NomDePlum]

The liability for the new contract sits with the PSB so that is something. Can you ensure your working practices match the determination they have sent you? If so then would HMRC not investigate the current contract first before looking at retrospective? If they investigate the current one and find it outside how likely are they to look at others?

However you also seem to indicated that others in your line of work are all being classified inside. If those are fair assessments then it starts to look pretty risky. Hard to say without knowing more but if that is the case then could you ever have been outside for any of the previous contracts? You also admit yourself that some of the previous contracts are inside.

Not trying to paint a gloomy picture just trying to give you a response that might help you think this through.

[TheFaQQer]

They have completed the ESS tool and sent me a copy of the results which state the Legislation does not apply. I am content with the answers they have given and obviously so are they. I understand how I need to approach the contract in order to be outside going forward in terms of working practice.

You have an outside declaration from the client, completed accurately, using the tool that HMRC have developed and said publicly and a number of times that they will stand by the results as long as they have been completed accurately.

If the tool was not completed accurately, then the liability for that lies with the fee payer - in your case, the agency.

Get a copy of the assessment in writing / print to PDF, keep it safe for in case HMRC come calling, then go back to the client.

[hollyblue]

The liability for the new contract sits with the PSB so that is something. Can you ensure your working practices match the determination they have sent you? If so then would HMRC not investigate the current contract first before looking at retrospective? If they investigate the current one and find it outside how likely are they to look at others?

However you also seem to indicated that others in your line of work are all being classified inside. If those are fair assessments then it starts to look pretty risky. Hard to say without knowing more but if that is the case then could you ever have been outside for any of the previous contracts? You also admit yourself that some of the previous contracts are inside.

Not trying to paint a gloomy picture just trying to give you a response that might help you think this through.

Any advice is appreciated, however, gloomy!

My thinking is that each contractor's status must be determined on their own working practice. In the past, in my line of work, it is usual for an engager to take on a contractor expecting them to fill a current vacancy that they cannot fill or while they are advertising for perm staff or due to an influx of work, which may not last, cover that extra work.

I have explained to my engager that I cannot undertake a 'role' as this is disguised employment. I can provide them with a service which allows them to meet their obligations to their end client whilst they search for a perm or until the influx settles down but I am under no circumstances filling a vacant post. Consequently I am not under their D&C, I chose my own hours, work place etc, and I do not undertake certain functions their perm staff do. If some of their other 'contractors' allow themselves to be used in that fashion well that makes them inside but surely as long as my working practices are different to a member of perm staff i should be ok, shouldn't I?

The trouble is some places Ive worked at are made up of at least 75% contractors, therefore if we all refused to do certain tasks as they are for perms only they would not be able to function so I think that's why a lot of PSBs (I'm talking Local Authorities) are taking the blanket approach. Plus Local Authorities are notorious for being dinosaurs and not being able to think outside the box and move with the times!

Do you think I'm stretching things a little too far to be determined outside if I am working in the way described? This LA has deemed all its contractors OUTSIDE so I won't be working alongside other INSIDE contractors in this PSB.

As I say all other LA's in the country, apparently, have deemed contractors in my line of work inside but I think that's because of the above reasons i.e. they are using them to fill current vacancies. The line of work I am in is a constantly growing field and LA's dont seem to be able to employ enough perm staff to keep up with the constant growth. Partly because they pay rubbish in comparison to private firms for the same work!

[hollyblue]

You have an outside declaration from the client, completed accurately, using the tool that HMRC have developed and said publicly and a number of times that they will stand by the results as long as they have been completed accurately.

If the tool was not completed accurately, then the liability for that lies with the fee payer - in your case, the agency.

Get a copy of the assessment in writing / print to PDF, keep it safe for in case HMRC come calling, then go back to the client.

I'm probably being over cautious (and paranoid here) but the ESS outcome completed by the engager was completed as the 'worker'. I'm wondering why they didn't complete it as the end client? It wouldn't negate their liability would it if HMRC deemed the decision to be wrong and the engager use it as way of saying that the 'worker' completed it incorrectly therefore they are not liable?

I suppose if they accept that determination regardless of who undertook the tool process they would not be taking reasonable care by saying well the worker completed the tool incorrectly therefore not our fault.

[TheFaQQer]

I'm probably being over cautious (and paranoid here) but the ESS outcome completed by the engager was completed as the 'worker'. I'm wondering why they didn't complete it as the end client? It wouldn't negate their liability would it if HMRC deemed the decision to be wrong and the engager use it as way of saying that the 'worker' completed it incorrectly therefore they are not liable?

I suppose if they accept that determination regardless of who undertook the tool process they would not be taking reasonable care by saying well the worker completed the tool incorrectly therefore not our fault.

There are two things to consider here.

Firstly, if an accurate assessment using ESS has been made, HMRC have said that they will stand by that assessment. So, they should accept it regardless of who performed the assessment as long as the answers given were accurate. That should give you an easy way to shut down the investigation.

Secondly, the client is obliged to make an assessment using whatever method they choose. Once they have made the assessment, the liability for the correct taxes being deducted on the basis of that declaration (either no taxes or full employment taxes) lies with the fee payer. That should remove any liability that your company might face - it sits with the fee payer.

For completeness, I would ask them to correct the first option and then repeat the test giving the same answers. There is also a box for them to complete their name and role. If HMRC start an investigation, being able to prove that the client did the assessment and it is accurate should help ensure that HMRC close the investigation quickly and painlessly.

[jamesbrown]

For completeness, I would ask them to correct the first option and then repeat the test giving the same answers.

Agreed. There's no sense in retaining evidence of incompetence. Perhaps more importantly - and I don't recall from my testing - the questions/guidance may depend on point of entry(?).

[hollyblue]

Agreed. There's no sense in retaining evidence of incompetence. Perhaps more importantly - and I don't recall from my testing - the questions/guidance may depend on point of entry(?).

I ran the test tonight as if I were the End Client, after saying you are the end client all the Qs and answers are the same, not that I necessarily thought they'd be different, and it gave an outside determination. So it looks like they're answering it pretending to be me and I'm answering it pretending to be them. We'll just do swapsies then!

[jamesbrown]

I ran the test tonight as if I were the End Client, after saying you are the end client all the Qs and answers are the same, not that I necessarily thought they'd be different, and it gave an outside determination. So it looks like they're answering it pretending to be me and I'm answering it pretending to be them. We'll just do swapsies then!

Good to confirm