IR35 when it is public sector

[JohntheBike]

So, do you work exclusively from home or do you attend the client site occasionally?



You are required to fix something. Your responsibility is to fix it when you are required to do so.
How do you become aware that it needs fixing? Does someone direct you to the problem, which you then react to?



But in 14 years, you’ve never used that.



But not IR35 insurance even though you have been effectively permanently employed by the same company doing the same job for 14 years.

So, do you work exclusively from home or do you attend the client site occasionally?

I work exclusively from home. I attended once on site in 2017, not at all in 2018 and twice this year.

How do you become aware that it needs fixing? Does someone direct you to the problem, which you then react to?

I guess you've heard of Remedy? All failures are automatically identified and an incident is raised and assigned to the appropriate SME. Any other contact with the client, who has no supervisory control over me, is directly with me and not through any representative of the software house that MyCo is contracted to.

But in 14 years, you’ve never used that.

I am entitled to rely on case law which indicates that if I have a contractual right of substitution, then I cannot be an employee, disguised or otherwise, of the client.

[BR14]

ah, John's Tedious Bollocks again.

what a surprise.

[JohntheBike]

ah, John's Tedious Bollocks again.

what a surprise.

well, if NLUK kept quiet, I would also!

[webberg]

I am entitled to rely on case law which indicates that if I have a contractual right of substitution, then I cannot be an employee, disguised or otherwise, of the client.

I'll give you good odds that:

The case law you seek to rely upon is rather less strong than you think, instead being powerful only in the context of the circumstances heard:

That the priority of form over substance which this case used in examining the substitution clause is entirely at odds with the interpretation of tax law generally and contrary to judicial principles:

That the subsequent cases will reverse the rather bizarre notion that a clause inserted into a contract ONLY to produce a tax outcome and which as no practical commercial effect and no real possibility of being executed, can be placed in the "irrelevant" pile.

If you have persuaded a tax firm to "insure" on the basis of that clause and the other elements you mention, you have done very well.

Certainly we would not.

[JohntheBike]

I'll give you good odds that:

The case law you seek to rely upon is rather less strong than you think, instead being powerful only in the context of the circumstances heard:

That the priority of form over substance which this case used in examining the substitution clause is entirely at odds with the interpretation of tax law generally and contrary to judicial principles:

That the subsequent cases will reverse the rather bizarre notion that a clause inserted into a contract ONLY to produce a tax outcome and which as no practical commercial effect and no real possibility of being executed, can be placed in the "irrelevant" pile.

If you have persuaded a tax firm to "insure" on the basis of that clause and the other elements you mention, you have done very well.

Certainly we would not.

That the subsequent cases will reverse the rather bizarre notion that a clause inserted into a contract ONLY to produce a tax outcome and which as no practical commercial effect and no real possibility of being executed, can be placed in the "irrelevant" pile.

I was referring to a case where the client stated that they would not accept a substitute, but because the contract included a right of substitution, the claim for employee benefits was dismissed and the judge made specific reference to the substitution clause in his summing up.

[JohntheBike]

Using the technicalities of the rules you'd be right. In reality length of time brings with it apathy and part and parcel comes in to play. You've got to have dotted every single i and t for that entire period. Slight lapses will occur and also the clients view on you will change which you can do nothing about.
IMO the fact you've been doing a BAU role longer than most permies should be a factor and I believe a bit of common sense would back that up. 14 years is extraordinary and could easily test any existing thoughts on time as a factor.
Remember, one of the only cases HMRC have won (or split as it was) had time as a major factor. JLJ lost his case on the fact he'd been there a long time and slipped in to bad ways. If he hadn't been there as long he wouldn't have lost. That, to me, says that time IS a factor.

Just quoting the rules say time doesn't have a bearing, particularly with that length, is a very naive view.

Remember, QDOS have a clause that says they won't cover a role they can't win (or something along those lines. Will QDOS really want to be taking on a case with that length of time that has never been tested bearing in mind the costs they'll rack up if you lose?
Out of interest, what level is your insurance at? If you lose what will they cover? I really don't think the basic 50k is going to cover your situation so I wouldn't be sitting quite so comfortably as you appear to be doing so.

It might be but it's pretty irrelevant as evidence goes.



Yes, because you butted into a question about public sector with


Which is totally irrelevant as you aren't in the PS.

so I wouldn't be sitting quite so comfortably as you appear to be doing so.

Is it not the case that until now, it has always been the responsibility of the contractor's company to determine the contractor's employment status with reference to IR35. If this is the case, as I understand it is, then it would be the contractor's company which would be liable for any tax penalty. Liability would only pass to the individual if it could be proven that the conduct of the directors was illegal, incompetent or unprofessional.

I have taken as many steps as I can, and more than most, to establish my status with regards to IR35. So I guess the directors of MyCo could not be accused of illegal, incompetent or unprofessional conduct. The conclusion then should be that liability for unpaid taxes should not transfer to me personally, should HMRC prove that MyCo did not correctly assess my employment status with regards to IR35

[northernladuk]

I was referring to a case where the client stated that they would not accept a substitute, but because the contract included a right of substitution, the claim for employee benefits was dismissed and the judge made specific reference to the substitution clause in his summing up.

Better hope your client agrees. You having a specialist skill set which is why you've been doing it for so long might lead them to not want one I which case the clause is a sham.

There has also been a case where judge was quoted that the untested RoS was virtually a sham. Kate Cottrell has also stated RoS has less significance.

All that and untested in 14 years. Not quite the pillar I think you are hoping it is.

And BTW lance started you on this journey not me.

[JohntheBike]

I'll give you good odds that:

The case law you seek to rely upon is rather less strong than you think, instead being powerful only in the context of the circumstances heard:

That the priority of form over substance which this case used in examining the substitution clause is entirely at odds with the interpretation of tax law generally and contrary to judicial principles:

That the subsequent cases will reverse the rather bizarre notion that a clause inserted into a contract ONLY to produce a tax outcome and which as no practical commercial effect and no real possibility of being executed, can be placed in the "irrelevant" pile.

If you have persuaded a tax firm to "insure" on the basis of that clause and the other elements you mention, you have done very well.

Certainly we would not.

The case law you seek to rely upon is rather less strong than you think, instead being powerful only in the context of the circumstances heard:

possibly, but then it is for me personally and as I've said elsewhere, I've done as much as I can, and more than most, to protect myself from a successful challenge from HMRC. Remember, they backed off originally from investigating me. I might seem like low hanging fruit, but I'm particularly poisonous, as a previous Parliamentary Solicitor knows.

[WordIsBond]

but I'm particularly poisonous

You might be onto something here. Hector would probably die of boredom before completing his investigation. The inspector in charge would be writing his superior saying, 'Whatever we think he owes, it isn't worth it. He thinks Extra Terrestrials or something are going to come and carry him away out of our grasp. Let's wait until he kicks off and see what we can get from his estate.'

[WordIsBond]

Sigh.

Best comment on the thread.