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Failed IR35 Review - QDOS

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    Failed IR35 Review - QDOS

    Hi All

    So QDOS have said my contract review has failed due to insufficient Subs clause - it has a 35 days notice period to submit a sub

    Otherwise it's all good, in my head. The contract is paid in EUROS and has payment terms of EOM +60 days - Surely a financial risk to work for 3 months without payment? I ran it through CEST and it was outside. Why do QDOS take such a 1 dimensional view and how do I prove that is an outside assignment?

    Many thanks.

    #2
    They don't take a one-dimensional view. Why don't you speak to them about the combination of factors that led them towards a failing opinion? It is only an opinion, afterall. It needs to aggregate several things. I've had contracts pass with QDOS largely on (lack of) D&C, for example, so a valid RoS is definitely not a silver bullet or required if other elements are strong. It's possible that your RoS clause is worse than silence or no RoS or that other elements are borderline. Not sure if they still do the quick/cheap review for £50 or so (contract only), but I wouldn't recommend that one. You ideally need the full review, including working practices. Other companies and reviewers are available. Personally, I would recommend Markel Tax.

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      #3
      Originally posted by jamesbrown View Post
      They don't take a one-dimensional view. Why don't you speak to them about the combination of factors that led them towards a failing opinion? It is only an opinion, afterall. It needs to aggregate several things. I've had contracts pass with QDOS largely on (lack of) D&C, for example, so a valid RoS is definitely not a silver bullet or required if other elements are strong. It's possible that your RoS clause is worse than silence or no RoS or that other elements are borderline. Not sure if they still do the quick/cheap review for £50 or so (contract only), but I wouldn't recommend that one. You ideally need the full review, including working practices. Other companies and reviewers are available. Personally, I would recommend Markel Tax.
      Thanks, I kept in the SUBS clause as advice from this forum was it is likely better than not having one - Markel are the ones you get through IPSE is that right?

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        #4
        Originally posted by Henrik67 View Post
        Thanks, I kept in the SUBS clause as advice from this forum was it is likely better than not having one - Markel are the ones you get through IPSE is that right?
        I'm just speculating, but my overall point is that absence of an adequate RoS ("not unreasonably fettered") should not preclude a pass, but it does put pressure on the other elements. Adding stuff in that doesn't reflect the reality of the working practices definitely won't help. Absence of a strong RoS means you need to be strong on lack of D&C, for example, because it is ultimately a judgement about risk, in the round. Yes, Markel offers a discount with IPSE membership, but you can use them without IPSE membership.

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          #5
          Also, I'm not suggesting you seek other opinions until you understand the one you've got. That is hard with the contract-only review, but you should have adequate feedback with their more expensive review of the contract plus working practices.

          Comment


            #6
            Originally posted by Henrik67 View Post
            Thanks, I kept in the SUBS clause as advice from this forum was it is likely better than not having one - Markel are the ones you get through IPSE is that right?
            Erm.. Well.. Kind of yes but no. Not having one is generally going to be a pretty clear cut fail but so is having an incorrect one that's fettered or worse. It's not a scaling thing where a bad one is better than non. Thr courts won't grant you credit or give you leeway for having one that won't stand up. It's still going to be a fail so no point arguing the toss about it. It has to be right for a pass. Anything else is a fail.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Originally posted by northernladuk View Post
              Erm.. Well.. Kind of yes but no. Not having one is generally going to be a pretty clear cut fail but so is having an incorrect one that's fettered or worse. It's not a scaling thing where a bad one is better than non. Thr courts won't grant you credit or give you leeway for having one that won't stand up. It's still going to be a fail so no point arguing the toss about it. It has to be right for a pass. Anything else is a fail.
              Thanks I am going to leave it in as it least it shows the discussion was had and I made a business decision to go with the time delay rather than the financial penalty - also what can I do as a 3rd party if I am told there is a 35 day process for security checking, system access etc - I can only work with what their processes are - IR35 is literally the worst thing man I hate it...

              Comment


                #8
                Originally posted by Henrik67 View Post
                Thanks I am going to leave it in as it least it shows the discussion was had and I made a business decision to go with the time delay rather than the financial penalty - also what can I do as a 3rd party if I am told there is a 35 day process for security checking, system access etc - I can only work with what their processes are - IR35 is literally the worst thing man I hate it...
                Well, if you feel that leaving it into "shows the discussion was had" and that you " made a business decision to go with the time delay rather than the financial penalty" will help you as a defence to being later found inside, then go for it by all means. As others have said, the "better a bad RoS than none" can be a false economy.

                Unfettered is always the best form of RoS but I guess in reality a fettered RoS doesn't always mean that you are inside - for example, Ltd company X provides service to defence Company Y. Substitute to be provided, lacks required SC. Given Ltd company X isn't List X and thus can't sponsor the SC only Company Y can, then I'd imagine a strong defence to RoS being fettered could be mustered.

                As always, RoS is only one of many factors to consider.

                Comment


                  #9
                  Originally posted by perplexed View Post
                  Unfettered is always the best form of RoS but I guess in reality a fettered RoS doesn't always mean that you are inside - for example, Ltd company X provides service to defence Company Y. Substitute to be provided, lacks required SC. Given Ltd company X isn't List X and thus can't sponsor the SC only Company Y can, then I'd imagine a strong defence to RoS being fettered could be mustered.
                  Taxman can argue that in such case substitution is hugely impractical and because of that it renders the given service as personal. Another caveat is that when the pool of people that could be used as substitute generally work with that particular client then that also doesn't count as genuine.

                  You can check the guidance https://s3-eu-west-2.amazonaws.com/t...0-Apr-2021.pdf

                  Comment


                    #10
                    Originally posted by elsergiovolador View Post
                    Taxman can argue that in such case substitution is hugely impractical and because of that it renders the given service as personal. Another caveat is that when the pool of people that could be used as substitute generally work with that particular client then that also doesn't count as genuine.

                    You can check the guidance https://s3-eu-west-2.amazonaws.com/t...0-Apr-2021.pdf
                    Interesting doc that. I haven't seen it before so will have to have a good read but some things really jump out in there. The Case 9 example appears to completely destroy the possibility of any coders working in an agile environment being outside, and I guess they'd try and extent that to anyone working agile. Very scary one that one.

                    But back on topic. I don't think either of your examples are as black and white as you put them and I'd disagree on both of them.

                    Re Subbing in to SC. I think it's totally possible, even with the big suppliers that are proper businesses, that providing an SC cleared sub in time isn't practical so the client would accept a sub in theory but the practicalities mean it won't happen. I don't believe this scenario necessarily makes it one of personal service and can be argued in court. I applied for a gig at the Bank of England quite awhile ago and queried an inside determination and they said it was because they can't accept SC subs. I applied for another gig last year which was outside, I queried the same point and they said because subbing was largely impossible due to the security aspect it didn't need to be considered for IR35 in that case. A pretty common sense argument.
                    I am sure TCS and other outsources out there have people on SC gigs that can't provide a seemless sub as that guidance advises but there is no way their engagement is personal service.
                    When it comes to SC I think there is a pretty good case for overlooking subs, particularly if the client says we would but the security process imposed means we can't.

                    I don't think your second statement is anywhere near right either. I think the fact you keep getting called back because you hold expertise in that area and happen to hold SC doesn't mean you are a pool. I'd say that's more a niche business offering. A pool would be people and not businesses meaning the engagement type wouldn't be that of a pool, it would be a contract to deliver a service. That's very different to having a number of temps you can call back in whenever you need. If you do look at it in more detail the fact they send the same person back is in the best interests of the client and the business providing it so is good business, not pooling. I think your definition is a bit askew here and again easily defendable in court.

                    I am sure in situations like this HMRC are not going to try nail someone an a disguised employee just because the nature of the engagement, i.e. high security, create a need for a slightly different engagement to standard... well I think they'd try but they can't win a normal investigation let alone an SC one.

                    All that said I am sure there are SC roles that are truely inside and all the above isn't the get out of jail free card for every SC gig. I just think failing them all on this topic isn't right.

                    IMO the only way of proving any of the above is by someone taking it all the way. We've nothing concrete to go on.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

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