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Public body didn't know about IR35 - can they put it all on the contractor now?

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    Public body didn't know about IR35 - can they put it all on the contractor now?

    A PB didn't know they were under IR35 from 2017. Close to the end of the contract, the PB came to the contractor and said they'd just realised about IR35. Can they charge the contractor PAYE and NI now?
    Last edited by Datman; 18 February 2020, 22:49.

    #2
    What is the situation here?
    Poor. Very very poor.
    Last edited by northernladuk; 18 February 2020, 20:00.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      Originally posted by Datman View Post
      Hi all - a bit of a strange situation. Wondering if you have any thoughts please?

      A public body ("PB") didn't know they were under IR35 from 2017 (neither did the contractor 'as it was their first role, set up an Ltd, went through an agency, etc). Close to the end of the contract, the PB came to the contractor and said they'd just realised about IR35. Can they retrospectively charge the contractor PAYE and NI now? The contractor was never given an SDS (still hasn't as of yet). The contractor would never have taken the contract at that fee level had this been told to them. What is the situation here?
      The first question is is the Public Body subject to the Freedom of information Act

      Contractors' Questions: Who's caught by April's IR35 changes?

      And then we come to the second bit
      Finance Bill 2017: Contractors' IR35 status to rest with public sector clients

      where the issue is the end clients to sort out and pay. It would be better all round to just reach an outside determination and leave things at that...
      merely at clientco for the entertainment

      Comment


        #4
        How long was 'he' there and is he still there?

        Now they know the need to provide a determination what have they decided?
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Originally posted by Datman View Post
          Hi all - a bit of a strange situation. Wondering if you have any thoughts please?

          A public body ("PB") didn't know they were under IR35 from 2017 (neither did the contractor 'as it was their first role, set up an Ltd, went through an agency, etc). Close to the end of the contract, the PB came to the contractor and said they'd just realised about IR35. Can they retrospectively charge the contractor PAYE and NI now? The contractor was never given an SDS (still hasn't as of yet). The contractor would never have taken the contract at that fee level had this been told to them. What is the situation here?
          If they are genuinely PB (check FOI status as suggested), the tell them to go **** themselves. Prepare for immediate bench time.
          See You Next Tuesday

          Comment


            #6
            An SDS is applicable only from this April, even in public sector.
            Prior to this the PB would only need to make a determination via some means.

            Where is the agency in all of this? What have they said?

            Comment


              #7
              Originally posted by eek View Post
              The first question is is the Public Body subject to the Freedom of information Act

              Contractors' Questions: Who's caught by April's IR35 changes?

              And then we come to the second bit
              Finance Bill 2017: Contractors' IR35 status to rest with public sector clients

              where the issue is the end clients to sort out and pay. It would be better all round to just reach an outside determination and leave things at that...
              Really interesting articles - sending them on right now. I don't know the full circumstances around the situation, but was very interested to know myself. Thanks for posting them

              Comment


                #8
                Originally posted by Datman View Post
                Really interesting articles - sending them on right now. I don't know the full circumstances around the situation, but was very interested to know myself. Thanks for posting them
                It's a bit surprising he and his client doesn't know this but why don't you? Public sector changes have been around 2 years and its about to hit private sector in 6 weeks.
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #9
                  He didn’t say he didn’t know about the PS changes, he’s saying he’s not sure how to help his colleague in this situation.
                  "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
                  - Voltaire/Benjamin Franklin/Anne Frank...

                  Comment


                    #10
                    Originally posted by eek View Post
                    It would be better all round to just reach an outside determination and leave things at that...
                    This.

                    The contractor has already paid corporation tax and dividend tax and is unable to reclaim them, at least in full. So there's no scenario in which it would be just or appropriate for him to pay the full PAYE taxes. They've blown it and the responsibility is on them.

                    But, they need to be asked why they think anything is do. Hopefully the contractor has a contract review or a CEST result or something showing he's outside. At this point, it's in everyone's interest to find him outside, then there's nothing due.

                    If his contract says there is a right of substitution, he can take them to CEST and say, 'All you have to do is confirm in CEST that you would have agreed to abide by the contract and accept a substitute. If we do that, this is outside and there is no problem here.'

                    Comment

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