What do you honestly think will happen in 2020?

[WordIsBond]

One "victory" (on a casting vote and which will be appealed) is not a catalyst for a sudden increase in activity.

If that were the case, then one defeat would have the capacity to bring the whole thing down.

No. This is a long campaign to drive contractors in deemed employment to the "correct" place.

It will accelerate, but not because of one case.

Mostly true, especially this part of it.

Only those with some seriously debatable roles in the past need to be concerned. HMRC has not the resource or the need to chase historic enquiries.

I think ANYONE with a role which carries over into April and is declared inside by the client is potentially at significant risk, even if it really isn't 'seriously debatable'. An inside determination, even a badly flawed one, will make any role 'seriously debatable', and there's potentially a lot of revenue for HMRC to go after.

And if they ask LargeCo to provide a list of all contractors before April, and of all contractors with inside determinations post-April, LargeCo will provide it, and they'll write their letters.

[ComplianceLady]

Mostly true, especially this part of it.

I think ANYONE with a role which carries over into April and is declared inside by the client is potentially at significant risk, even if it really isn't 'seriously debatable'. An inside determination, even a badly flawed one, will make any role 'seriously debatable', and there's potentially a lot of revenue for HMRC to go after.

And if they ask LargeCo to provide a list of all contractors before April, and of all contractors with inside determinations post-April, LargeCo will provide it, and they'll write their letters.

They've already done that. Letters went to all large companies asking for details of prep, person responsible, number of contractors and categories. Once they've collated the responses and the lack thereof they'll be back asking for names.

HMRC won't automatically look at people classed inside because they're starting it now, automatically looking at everyone outside.

[WordIsBond]

They've already done that. Letters went to all large companies asking for details of prep, person responsible, number of contractors and categories. Once they've collated the responses and the lack thereof they'll be back asking for names.

HMRC won't automatically look at people classed inside because they're starting it now, automatically looking at everyone outside.

Evidence? If I knew this would true I'd be done with UK clients until someone reigns these people in. More trips overseas for me, I guess.

[JohntheBike]

They've already done that. Letters went to all large companies asking for details of prep, person responsible, number of contractors and categories. Once they've collated the responses and the lack thereof they'll be back asking for names.

HMRC won't automatically look at people classed inside because they're starting it now, automatically looking at everyone outside.

HMRC won't automatically look at people classed inside because they're starting it now, automatically looking at everyone outside

and when they've finished with those outside, then they will turn their attention to those classed as inside, and compare those against those who didn't class themselves as inside prior to April 2020 and chase them.

Just being my normal cynical self!

[JohntheBike]

Mostly true, especially this part of it.

I think ANYONE with a role which carries over into April and is declared inside by the client is potentially at significant risk, even if it really isn't 'seriously debatable'. An inside determination, even a badly flawed one, will make any role 'seriously debatable', and there's potentially a lot of revenue for HMRC to go after.

And if they ask LargeCo to provide a list of all contractors before April, and of all contractors with inside determinations post-April, LargeCo will provide it, and they'll write their letters.

I think ANYONE with a role which carries over into April and is declared inside by the client is potentially at significant risk

and I think that anyone who is classed as inside by the client after April 2020, but who has had a professional outside assessment and is then challenged by HMRC, should short circuit the issues by going to the ET, if only to protect their position prior to April 2020.

Would you trust the FTT to accept a professional outside determination prior to April 2020? Neither would I. So clearly if there were to be such a challenge, the odds would be stacked against a contractor in the FTT, but not in the ET. If the ET agreed with HMRC, then that person is a bona fide worker at least, if not a full employee. If they found against the contractor, then HMRC would have no chance of persuading the FTT otherwise.

If I were challenged under these circumstances, and there was a huge amount of back tax at stake, as undoubtedly there would be, the ET costs would pale into insignificance. I seem to have made that assessment previously, funnily.

The ET route is a win win situation.

[northernladuk]

And here we are again......

[webberg]

To contradict this point may I refer you to the Glaxo letters. I suspect HMRC may willingly open up a lot of such campaigns, knowing that a lot of people will just en up paying due to lack of knowledge regarding options.

The GSK letters are simply shaking the money tree to see how much can be collected for no real effort.

No enquiry is made; no status challenged via statute; no need to even engage HMRC if you choose not to.

[webberg]

and I think that anyone who is classed as inside by the client after April 2020, but who has had a professional outside assessment and is then challenged by HMRC, should short circuit the issues by going to the ET, if only to protect their position prior to April 2020.

Would you trust the FTT to accept a professional outside determination prior to April 2020? Neither would I. So clearly if there were to be such a challenge, the odds would be stacked against a contractor in the FTT, but not in the ET. If the ET agreed with HMRC, then that person is a bona fide worker at least, if not a full employee. If they found against the contractor, then HMRC would have no chance of persuading the FTT otherwise.

If I were challenged under these circumstances, and there was a huge amount of back tax at stake, as undoubtedly there would be, the ET costs would pale into insignificance. I seem to have made that assessment previously, funnily.

The ET route is a win win situation.

My last post on yet another thread all because of facts being ignored or made up or bent to fit a particular bias rather than giving credibility to those who have a degree of professional objectivity.

Let's look at the first statement. Contract runs April to October 2020. An IR35 expert says - in March 2020 - "outside". The end client and agency accept this. In May 2021 HMRC gets data from end client/intermediary. They may enquiries and in October 2021 they say "inside" and claim the money from the fee payer. (I've granted HMRC infinite resources here and expert targeting).

Fee payer pays and perhaps seeks a claim against end client and/or individual. HMRC does not care.

Where then is the challenge for the FTT?

It's not with the contractor because he has no tax dispute.

The fee payer is perhaps going to take a case. Let's say that they are fast and apply for a hearing in October 2021. They might get a hearing in Q4 2022. That is nothing to do with HMRC just a function of a busy Tribunal system.

Even if the fee payer wins (eventually) what possible role could the ET play?

By the time they win it might be 2024 and beyond - too late for ET anyway.

The ET in this scenario is not a win/win. It's irrelevant.

The problem for the contractor is that the end client/agency/fee payer cave in without a fight BECAUSE they have an indemnity from the contractor to pay the tax that HMRC has collected. If that exists and if that happens, ONLY if the fee payer is also the end client might there be the smallest chance of the contractor claiming that they were really in employment. One of the consequence sof that is tax at source. The benefits are small.

The ET in this scenario is not a win/win. It's irrelevant.

[jamesbrown]

And here we are again......

How about this for a new rule? If JtB and ET appear within one A4 page of each other, then JtB is locked in his own forum until every member of CUK signs an affidavit agreeing to his release.

[webberg]

Call it Friday blues or the fact that we seem to have been working at 100% all year or that I've not had a holiday this year but my tolerance level is low.

I have previously acknowledged that Mr JtB took a case to ET and in the very peculiar circumstances that existed, it was a brave call that may or may not have helped.

That was a long time ago. Times have changed. The law then and the law now are different. Post April 2020 any alleged ties between tax and employment will be weaker. Unless and until the Good Work report is enshrined in legislation, that is how it will remain.

The answer to the present and near future changes in the contractor market are NOT to be found in dragging an end client to ET because of the above and because of a lack of legal pathway.

The answers will be much, much more complex and individual.

I therefore find the constant harping back to the above case and the promotion of "go to the ET who will solve all the problems" otiose, boring, illogical and frustrating. Filling the threads with the same message over and over is sad. Worse, it does not move the debate forward. Look at the responses the same old, same old message draws. Aside from those who seem to inhabit a world in which out of court settlements create precedent, where contractors are willing en masse to bite the hand that feeds them, where individuals wield a power in negotiation nobody has seen or witnessed in the last 20 years, the rest of us are entirely unconvinced that the route to Nirvana via ET exists.

Despite proving that this path to an imagined Eden not only does not exist and nobody is willing to use it , we still get the "go to ET" message.

The final straw here for me is the implication that by analysing the situation and acknowledging that HMRC has played and is playing a very good game because 4 or 5 years ago they planned it, I am somehow advancing the HMRC agenda.

For what it's worth, I'm not.

I am presenting the facts and the tax law as I understand it and seeking to show that countering action is possible but that it has to based on a proper understanding of the situation, an appreciation of the complexity and a willingness to take some control and try something different for a while.

If that makes me a secret agent for HMRC - guilty.

As I said at the top. Perhaps I'm temporarily intolerant of seeing the same asinine message and making the same responses week after week.

I have some holiday coming up and it is therefore a good time to leave this entire section "Reform of IR35" alone for a few weeks and regain some perspective.

You may regard this sign off as the flouncing of a diva or the reaction of a frustrated adviser or something in between.

For a while however I'll stick the HMRC section of the website.