April 5th 2020 and Contract Extension/Renewal

[cojak]

4. Leave the client at the end of the contract (or maybe even before).

[Blert596]

4. Leave the client at the end of the contract (or maybe even before).

I'd be quite happy to leave if I thought leaving on 31 March would be good.

Leaving now. whilst there is work on offer, and long term work, even at reduced pay is better than none. Unfortunately, there's no real other employer in my field here. Or at least none that are taking on at the moment/foreseeable future. Any income would be better than none.

I have a small warchest put aside, but I'd much rather use that for when there's no option to work, as opposed to paying it to HMRC in back taxes.



My friend, I mean my friend in the above obviously

[iguy2008]

Yes you are. There isn't a determination on the table yet. Leaving now means his role had nothing to be compared against leaving in March he'd be leaving a gig the client has already admitted is inside.

Hi I am the original poster of the question.

So the client has now suggested an extension until end of Feb 2020. I asked the in house billing/agency team (they are not really an intermediate and my contract is with the end client) as to what the clients plans for IR35 and they said no decision as yet.

Would it be acceptable to take the renewal until end of feb if I got the end client to add wording to the contract such as "The end client considers this role as outside of IR35". I will definitely be finished at end of Feb 2020 but even then, if an extension came along, the "baseline" would be based on the fact that my previous contract was outside IR35.

Thanks.

[jamesbrown]

Hi I am the original poster of the question.

So the client has now suggested an extension until end of Feb 2020. I asked the in house billing/agency team (they are not really an intermediate and my contract is with the end client) as to what the clients plans for IR35 and they said no decision as yet.

Would it be acceptable to take the renewal until end of feb if I got the end client to add wording to the contract such as "The end client considers this role as outside of IR35". I will definitely be finished at end of Feb 2020 but even then, if an extension came along, the "baseline" would be based on the fact that my previous contract was outside IR35.

Thanks.

Whether or not you take the renewal, that would be a stupid addition and probable non-sequitur to add to a contract because it’s a matter of fact in relation to the other contract clauses and whether they reflect reality, not assertion. If I read a contract with such a declaration, alarms would go off immediately, and the client would be very stupid to agree this too. If you want something more than the contract, get a confirmation of arrangements as a side letter.

[northernladuk]

+1 to the above. We've also said many times working practices trump the contract, as will the determination so pointless.

[WordIsBond]

Hi I am the original poster of the question.

So the client has now suggested an extension until end of Feb 2020. I asked the in house billing/agency team (they are not really an intermediate and my contract is with the end client) as to what the clients plans for IR35 and they said no decision as yet.

Would it be acceptable to take the renewal until end of feb if I got the end client to add wording to the contract such as "The end client considers this role as outside of IR35". I will definitely be finished at end of Feb 2020 but even then, if an extension came along, the "baseline" would be based on the fact that my previous contract was outside IR35.

Thanks.

Bad idea. Ask for this instead, X being the client and Y being YourCo:
"X will make no determination on IR35 status and all payments due under this contract will be paid by X to Y before 31 March 2020."

In other words, the contract is being worded to be done in time to be out of scope for any new legislation, so they don't have to make the determination. You're doing them a favour, nice guy that you are, and should sell it to them on that basis.

And of course, you won't accept any renewal that doesn't come with an 'outside' determination. But what you are getting into the contract is that they won't make an early determination (that zaps you) and hand it to HMRC.

I am not a lawyer.

[iguy2008]

Bad idea. Ask for this instead, X being the client and Y being YourCo:
"X will make no determination on IR35 status and all payments due under this contract will be paid by X to Y before 31 March 2020."

In other words, the contract is being worded to be done in time to be out of scope for any new legislation, so they don't have to make the determination. You're doing them a favour, nice guy that you are, and should sell it to them on that basis.

And of course, you won't accept any renewal that doesn't come with an 'outside' determination. But what you are getting into the contract is that they won't make an early determination (that zaps you) and hand it to HMRC.

I am not a lawyer.

Hi Thank you for all the replies.

I'm getting the feeling that for anyone who as been at an end client for a while and there is a suspicion that the end client will consider all contractors as under IR35, will be jumping ship (and ensuring all payments are completed) well before April 6th 2020.

Thanks - iguy

[northernladuk]

Hi Thank you for all the replies.

I'm getting the feeling that for anyone who as been at an end client for a while and there is a suspicion that the end client will consider all contractors as under IR35, will be jumping ship (and ensuring all payments are completed) well before April 6th 2020.

Thanks - iguy

No such thing as 'under IR35'

[iguy2008]

Sorry inside ir35.

No such thing as 'under IR35'

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[BABABlackSheep]

I agree with this. I've just had an extension through to the 31st March but will finish a week early for the payment to make this financial year.

If I can't get an outside determination in the next one then I suppose going brolly from 6th April is a good time to do it.

Which would open the door wide open for an investigation in to your old contract if the new one is inside.

What about, if the client decides not to make a decision if contractors are inside or outside IR35, but instead either doesn't renew contractors or forces contractors to go inside a brolly?

My thinking is I can go brolly(I'm on the list to keep), MVL my limited company, and if the tax man queries it, I have a legitimate reason for doing so. The ER on liquidizing my company means I'll offset some of the loss of income for 2 years before I'm able to start another limited company in the same business.

OR, if I want to start another limited company(on my own or with others) within the 2 year rule for MVL, then again I have an excuse as it couldn't be determined that I closed my business to get a tax advantage. I did so because I had work with a client who insisted on umbrella.

Thoughts please.