• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

ir35 meeting with client - appreciate a little guidance.

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    ir35 meeting with client - appreciate a little guidance.

    I have a meeting with a client and I would be grateful if anyone can clarify a couple of issues I'm still confused about. I know we're awaiting final Nov confirmation on some of this but answers as of now / what everyone thinks will happen are good enough to start discussions with.


    WHO IS RESPONSIBLE FOR THE DETERMINATION?

    If I provide services { me > my Ltd Co > Agency > Private Sector Client > Public Sector client } - who is responsible for the IR35 determination?
    • Pre April 2020.
    • Post April 2020.


    I think post April 2020 it will be the private sector client.
    I think pre. April 2020, I contract to the private sector so the determination is still with me.

    Is this correct?


    WILL ALL CONTRACTS HAVE A PRE DETERMINATION?

    In terms of taking new contracts in the above scenario, am I correct in thinking that any contract I negotiate that goes over April (1st)? will need to have a pre-determination. As in, if I had a contract from Nov > May I need to have that (post April determination clarified).

    How can a pre-determination even work, given that it's based on both contract & working practices. The private sector client in the above essentially pimps me out to a public sector client, the contract bit is easy enough to sort to my mind, the working practices bit is basically something that I determine. I work in a certain way, so I turn up on site, the public sector shows me the system & what they need then needs to leave me to it. But, if it's a new gig you don't know exactly what you're walking into it. Sure I can say, I do these hours and I won't be managed and I won't be available on these days but in reality we all have to bend a little.


    HOW WILL THE APPEALS PROCESS WORK?

    Post April 2020, let's say I was determined inside. Let's say I disagree. Let's say I appeal. Let's say this takes 4 months with a client that is new to all of this and finding their way themselves. How do I work and how am I paying taxes during that appeals process? Who is responsible for the final-final post appeal determination? What then happens if the appeal finds I'm STILL inside. Do I go back those 4 months and pay back any expenses / incorrectly paid taxes?


    Thank you.
    Lisa: "Gary, you can't blame yourself for what gorillas did."

    #2
    Originally posted by babybel View Post

    WILL ALL CONTRACTS HAVE A PRE DETERMINATION?

    In terms of taking new contracts in the above scenario, am I correct in thinking that any contract I negotiate that goes over April (1st)? will need to have a pre-determination. As in, if I had a contract from Nov > May I need to have that (post April determination clarified).
    Yes and as early as possible as, depending on your payment schedule, you should be leaving as early as Jan/Feb to make sure no payments happen after April the 1st. With notices involved you need to know what's going on end Nov/Dec latest.
    How can a pre-determination even work, given that it's based on both contract & working practices. The private sector client in the above essentially pimps me out to a public sector client, the contract bit is easy enough to sort to my mind, the working practices bit is basically something that I determine. I work in a certain way, so I turn up on site, the public sector shows me the system & what they need then needs to leave me to it. But, if it's a new gig you don't know exactly what you're walking into it. Sure I can say, I do these hours and I won't be managed and I won't be available on these days but in reality we all have to bend a little.
    This has been raised as a question by HMRC (Question 5 in the link below)
    https://assets.publishing.service.go..._responses.pdf

    A couple of the consultations I read have pointed out a long chain won't work and there is talk of a master vendor that will handle it up the chain. That would indicate there is some room for the determination to sit with your client but heavily based on discussions with their client. I imagine they'll discuss the situation with their client and if it is a bum on seat role your client will have to make the determination.

    There is a thread running at the moment about clients of clients and the problems with offshore and the like.

    If you are a bum on seat at your PS you should already be part of the Off payroll farce and your client might be a little negligent if they aren't already to be honest. I don't think we really know the answer to this yet though.
    HOW WILL THE APPEALS PROCESS WORK?

    Post April 2020, let's say I was determined inside. Let's say I disagree. Let's say I appeal. Let's say this takes 4 months with a client that is new to all of this and finding their way themselves. How do I work and how am I paying taxes during that appeals process? Who is responsible for the final-final post appeal determination? What then happens if the appeal finds I'm STILL inside. Do I go back those 4 months and pay back any expenses / incorrectly paid taxes?
    I don't think we know this detail yet as this only came out fairly recently. Bearing in mind it's a client led appeal I'd imagine you carry on paying as normal until your client and you have worked out the situation. If they cave and say outside I'd imagine you'll then have to put a claim to HMRC for incorrectly paid NI and the like (Is that section 8 claim or something?)

    Realistically it's not going to work very well. The client make the determination and it's the client that will then decide if they've made a mistake so you can see where that will go. Also, I'd imagine if you push it you are going to get yourself walked so not much room for fighting clients about their own determinations, particularly if they've carried out due diligence and had a 3rd party come in and help with assessments. Most cases will be a contractor moaning they've been hard done to and it goes no further.
    Last edited by northernladuk; 14 August 2019, 09:51.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      What exactly is this meeting for though? If it's you helping them with the whole off payroll thing then I'd walk away from that. Giving them the wrong and advice when you don't really know is going to cause more problems than it solves. If they are looking to answers to these questions then point them to QDOS and get them to pay for some consultancy from them like most clients are doing.

      Don't attempt to sort this for them as it surely can't end well in a complex situation like this.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        Originally posted by babybel View Post

        WHO IS RESPONSIBLE FOR THE DETERMINATION?

        If I provide services { me > my Ltd Co > Agency > Private Sector Client > Public Sector client } - who is responsible for the IR35 determination?
        • Pre April 2020.
        • Post April 2020.



        WILL ALL CONTRACTS HAVE A PRE DETERMINATION?


        HOW WILL THE APPEALS PROCESS WORK?

        Thank you.
        My thoughts.

        1. Pre April 2020 it's YOUR determination of IR35 status that is required.

        Post April 2020 - and don't forget this is for PAYMENTS made after that date, so possibly the work may be done before then - if the various intermediaries are simply arranging for YOU to perform services PERSONALLY for the public sector client, then it's the public sector client.

        If the private sector entity is providing the public sector entity with a service, then the public sector entity is a client of the private sector entity. In that case, it would be the private sector entity making the determination.

        2. No. The trigger is PAYMENTS made, not contracts live and active. The private and/or public sector entity only has to decide the right course of action after April 2020. You are not obliged to take part in any discussions or fact finding or determination exercise before the,

        If it is the case that the work being done in April 2020 is unclear, unknown or yet to be decided, I suggest that there is little value to be had from an academic discussion now.

        I would further suggest that if the purpose of the pre determination meeting is to find a means of keeping you outside IR35, given the number of parties in the loop and the opaqueness of their motives, I would be very wary about participating and would certainly not agree to anything without taking advice that is for YOU to rely on. In other words, not advice from any of the parties in the chain but your own adviser, assuming they are sufficiently up to pace.

        3. Once past April next, the relevant party (see above) will issue an SDS. Probably be prepared ahead of the start date and be available very soon after the trigger day. You can appeal and the end client has 45 days to respond. Until that response is made, the end client is liable for tax/NIC deductions.

        Once the response is made, if the decision is "inside" then the agency closest to your limited company becomes liable to make deductions.

        If you don't like the original decision or the decision following the appeal - tough. There is nowhere else to go at the moment.
        Best Forum Adviser & Forum Personality of the Year 2018.

        (No, me neither).

        Comment


          #5
          I would imagine that in real life your appeal will only take you as far as the client's termination of your contract.

          There'll be others out there happy to pick up where you left off, just inside IR35.
          "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


            #6
            thanks for the replies.

            Cheers for the replies. It's very complicated and indistinct still. I'm sure we will get a bit more clarity but jesus ...

            You raised some good points I didn't know about and hadn't considered. Thank you.

            The purpose of the meeting is just to raise it with the client, see what they are doing about it, gauge what their understanding is. I'm not advising but I do need to understand it all much better than I do atm to make my own plans. I'm also not going to throw away a relationship with what has been a good and repeat client without some engagement. If we can work together in a mututally beneficial way post April - inside v outside / with or without a rate adjustment - great, if not that's fine too.

            Having now had the meeting, it is apparent that this (private sector) client who is a very big player and engages an awful lot of contractors, is completely ill prepared for this change. They have a blatantly incorrect understanding of how it should work and the changes it will bring. They say it's not their responsibility to determine so they don't have a department somewhere working on it and they have not engaged any external advisors. They also form in leaving things until the last minute.

            WRT taking my own advice, I'm not sure I see the point. As in, the determination will be out of my hands post April 2020. If it's wrong it won't have any impact on me will it? I guess the only thing I need to do for anything paid post April 2020 is understand the financial impact of any contract and it's determination and decide if to take it or not.

            WRT others poised to take up the work for less or inside. This is very unlikely to happen in my particular position. But there will be a period of adjustment during which I want to be ready to either walk / sit it out / or be in a strong enough position to negoitate for a uplift with the current client to counter an inside determination if it comes to it.

            Just trying to get my head around this and get my ducks in order.
            Lisa: "Gary, you can't blame yourself for what gorillas did."

            Comment


              #7
              Originally posted by babybel View Post
              WRT taking my own advice, I'm not sure I see the point. As in, the determination will be out of my hands post April 2020. If it's wrong it won't have any impact on me will it? I guess the only thing I need to do for anything paid post April 2020 is understand the financial impact of any contract and it's determination and decide if to take it or not.
              .
              It should be out of your hands sometime between October and late Jan. April is too late. Work your payment terms backwards and you'll have an idea when you've got to stop working if they are going to put you inside i.e. your last payment MUST be before April 6th. Monthly 30 days in arrears and your last day should be end of Jan and then any notice period you've got if you need to leave so if 30 days then notice should be going in before you close for xmas break. Determination should be anytime mid Dec at the latest.

              Might want to point this out to them if they are even remotely thinking of going inside. It's not a case of it happening the day before.
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                Originally posted by northernladuk View Post
                It should be out of your hands sometime between October and late Jan. April is too late. Work your payment terms backwards and you'll have an idea when you've got to stop working if they are going to put you inside i.e. your last payment MUST be before April 6th. Monthly 30 days in arrears and your last day should be end of Jan and then any notice period you've got if you need to leave so if 30 days then notice should be going in before you close for xmas break. Determination should be anytime mid Dec at the latest.

                Might want to point this out to them if they are even remotely thinking of going inside. It's not a case of it happening the day before.
                Agreed, payment terms need to be taken into account. I guess we have all come to the conclusion that running an Ltd. whilst inside IR35 is nonviable. However, how are inside contracts likely to be couched after April 2020? Clients will still want to protect themselves by having contracts with Ltd. companies and presumably pay monies into an Ltd. company bank account. However, from a contractor's point of view, they would want the monies to be paid into a private account, so as to be able to close their Ltd. I understand that some will be able to engage through an umbrella, but I guess some clients might not want this structure. What are your thoughts?

                Comment


                  #9
                  Mr Babybel, if you want to PM me, I'll share some thoughts on the issues.

                  It sounds to me though that it will be the public sector end client making the decision, that is very likely to be "inside" and that in turn may well obviate the need for all the other entities and instead you go and find yourself a proper umbrella.

                  The saving from removing the intermediaries will be useful for the umbrella fees.
                  Best Forum Adviser & Forum Personality of the Year 2018.

                  (No, me neither).

                  Comment


                    #10
                    Originally posted by JohntheBike View Post
                    However, from a contractor's point of view, they would want the monies to be paid into a private account, so as to be able to close their Ltd. I understand that some will be able to engage through an umbrella, but I guess some clients might not want this structure. What are your thoughts?
                    Wouldn't that be bordering on tax evasion?

                    Why would a client care how they contractor is remunerated?
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

                    Comment

                    Working...
                    X