What are your clients doing with IR35 reform?

[jamesbrown]

Re fully overseas clients, I always thought they were as good as safe from IR35 anyway. Reason being it's very hard to control someone who works remotely hundreds/thousands of miles away. Perhaps not a complete silver bullet, but would seem a high bar for HMRC to overcome.

Of course I'm not suggesting that this could cover convoluted scenarios like contractor working in the building of UK HSBC but get agreement to invoice US/France/whatever HSBC and be safe.

Right, I think that’s largely true. However, before April 2020, the onus is on the UK PSC to prove its status determination. From April 2020 going forward, there is no pressure point in a fully overseas supply chain, so the entire chain, including the PSC, can effectively forget about IR35. That is the surprise to me. Why wouldn’t they retain the existing regime in that case?

[SouthernHarrier]

Yup I had the same email. Will be interesting to see what the questionnaire looks like.

Got this email from ClientCo today.

What we are doing?

We are working hard to ensure we have the necessary processes and support in place to implement these changes as soon as possible. We need to ensure all our contractors operate under the correct IR35 status, minimising the risks to them and to ourselves.

As well as creating an environment that helps our contractors comply with legislation, we have also engaged with IR35 compliance experts, Orange Genie Compliance, who will help us deliver training and workshops to ensure all stakeholders have the information they need about the changes.

Hiring managers and contractors will be invited to these workshops which are taking place at the end of August. We are also asking contractors to complete an online survey to help us gather a picture of the IR35 status ahead of the changes next year.


Obviously it remains to be seen how this will resolve but at least they are aware of and have started the process.

[WordIsBond]

From April 2020 going forward, there is no pressure point in a fully overseas supply chain, so the entire chain, including the PSC, can effectively forget about IR35. That is the surprise to me. Why wouldn’t they retain the existing regime in that case?

Perhaps for the exact reason Maslins has given. They can't compel the client to talk to them, so they can't really investigate working practices. All they have is the contract and what the contractor says. The contractor would have to be pretty stupid to lose this one.

1. 'Yes, my contract states I have the right of substitution. In fact, if the work is done, they won't even know if it was me or someone else doing it, will they? I send it to them but they don't know who did it.'
2. 'No, I'm not controlled. I decide when, where, and how to work. We're not even in the same time zone.'

Now, actually, I do have a small contract with a foreign client where I'm controlled, and the reality is they wouldn't accept a substitute. So the reality is it probably is inside IR35 and I treat it as such because I think it should be. But there's no way HMRC could actually prove it is inside and I could find a way to describe it as outside, if it weren't for my conscience.

But I don't see any way they can really win an IR35 case with a foreign client unless the contractor falls on his sword.

[jamesbrown]

Perhaps for the exact reason Maslins has given. They can't compel the client to talk to them, so they can't really investigate working practices. All they have is the contract and what the contractor says. The contractor would have to be pretty stupid to lose this one.

1. 'Yes, my contract states I have the right of substitution. In fact, if the work is done, they won't even know if it was me or someone else doing it, will they? I send it to them but they don't know who did it.'
2. 'No, I'm not controlled. I decide when, where, and how to work. We're not even in the same time zone.'

Now, actually, I do have a small contract with a foreign client where I'm controlled, and the reality is they wouldn't accept a substitute. So the reality is it probably is inside IR35 and I treat it as such because I think it should be. But there's no way HMRC could actually prove it is inside and I could find a way to describe it as outside, if it weren't for my conscience.

But I don't see any way they can really win an IR35 case with a foreign client unless the contractor falls on his sword.

Agreed on the difficulties for HMRC, which have always existed, but there was at least a responsibility on the PSC to justify the status assessment for a given engagement and to appear at tribunal and to outline the working practices, truthfully, which would lead to the identification of a hypothetical contract. So there was a hook for HMRC before April 2020; a legal requirement on the PSC to justify the reality.

Now there isn't a hook. I guess it's possible that they thought "we can't win those cases, so let's just gloss over that part of the legislation, even though it's a mess, because that is preferable to introducing a specific exclusion". Still, it remains a mess, so they are left in a position where enforcement is ultimately required, but completely impractical. Either way, I don't really care - like I said, if the draft legislation remains roughly in that shape, then IR35 becomes a complete non-issue for a PSC with an overseas client and fee payer post April-2020; it will be outside by default.

Just one more reason for UK-based contractors to bid on overseas work

[takethebus]

Agency contacted me regarding current client plans for IR35 reform informing me that I have been selected for initial batch of IR35 status determinations prior to the client undertaking a wider assessment of all contractors.

I’ve been asked to undertake an online assessment from QDOS about my engagement in respect of how my company operate as a business in its own right. I have been asked to answer the questions around my working practices as I see them and a copy will be sent to the client for review and feedback.

I suppose being able to provide my own feedback as as well as the client assessment idicates it’s an individual assessment rather than blanketing but always sceptical when it comes to these sort of things.










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[northernladuk]

I don't think providing your own assessment helps and I don't think that would be why they are asking. Asking a contractor to do it themselves when they are on the hook is asking for trouble. Do they not realise that the one set of people that know less about Ir35 than themselves is most contractors?

I'd imagine they are getting your feedback on your position in general to feed in to something else rather than assessing yourself surely?

[takethebus]

Reading a bit more into it they will be performing status determinations to a subset of contractors in August so assume it means I will be informed of their determination this month.

Agree it sounds more plausible that it’s a feedback/information gathering survey for their own pilot, business planning.


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[PerfectStorm]

Got this email from ClientCo today.

What we are doing?

We are working hard to ensure we have the necessary processes and support in place to implement these changes as soon as possible. We need to ensure all our contractors operate under the correct IR35 status, minimising the risks to them and to ourselves.

As well as creating an environment that helps our contractors comply with legislation, we have also engaged with IR35 compliance experts, Orange Genie Compliance, who will help us deliver training and workshops to ensure all stakeholders have the information they need about the changes.

Hiring managers and contractors will be invited to these workshops which are taking place at the end of August. We are also asking contractors to complete an online survey to help us gather a picture of the IR35 status ahead of the changes next year.


Obviously it remains to be seen how this will resolve but at least they are aware of and have started the process.

Would that be the same Orange Genie who run an umbrella? No prizes for guessing what direction their 'advice' will take...

[jamesbrown]

I don't think providing your own assessment helps and I don't think that would be why they are asking. Asking a contractor to do it themselves when they are on the hook is asking for trouble. Do they not realise that the one set of people that know less about Ir35 than themselves is most contractors?

I'd imagine they are getting your feedback on your position in general to feed in to something else rather than assessing yourself surely?

The stuff that probably matters most to them is the second-order, in-business, stuff, which they won't know about from the contractual relationship (except insofar as it restricts that). If Qdos, or anyone else, wants to build a picture of the hypothetical contract, then it makes sense to ask both parties and then to filter out the crud. Sounds to me like a client that is engaging with this properly.

[GhostofTarbera]

My client says it’s replacing all contractors


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