New contract IR35 pre-cautions New contract IR35 pre-cautions
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  1. #1

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    Default New contract IR35 pre-cautions

    Hi,

    I'm currently in a position where I have been with the same client for the past last 3 years working on a project. Contract has been reviewed by a tax specialist and deemed outside, client has agreed to RoS in writing(although never needed to exercise this).

    Client has advised all contractors they are reviewing individual roles and will be making determinations based on these with a view to April's off-payroll legislation. These will be communicated well in advance of the new year's date - I believe these will be completed before December.

    I'm in the last knockings of my contract and have another role lined up. However, I'm concerned that if the client determines this role as inside and advises me of this before i leave this would potentially cause back dated tax issues (although I am acting on the basis that I am outside). Does it matter if I am there or not before determinations are made, or is the risk more an issue if I am still there and the decision is made or does it lessen the risk if I have left before they have communicated it?

    In addition to the above and to ensure that the new contract is bullet proof, I'll again get contract reviewed by a 3rd party tax specialist and request that the client confirms post April the role remains outside of IR35. I'll be unable to get working practices reviewed as I've not yet started the role.

    Is there anything else I can do to ensure the new role is water tight?

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    At the top of this very part of the forum is a sticky thread explaining exactly what your options are and answers your questions about being there or not when the determination hit.

    Have a look at that and then if you have any more specific questions feel free to ask.

    https://www.contractoruk.com/forums/...ould-i-go.html

    Read the other thread first but a few very brief answers to your questions are..


    Does it matter if I am there or not before determinations are made, or is the risk more an issue if I am still there and the decision is made or does it lessen the risk if I have left before they have communicated it?
    We don't really know but common sense dictates if you are a list saying outside and then appear on the same list as inside then it's pretty black and white. If you aren't there to be determined then who knows. Not being there does lessen the risk considerably but what that risk is we don't really know.
    In addition to the above and to ensure that the new contract is bullet proof, I'll again get contract reviewed by a 3rd party tax specialist and request that the client confirms post April the role remains outside of IR35. I'll be unable to get working practices reviewed as I've not yet started the role.
    Erm... why? The client determines the role. If they say outside and they've applied enough diligence to it to not be negligent there is nothing else for you to do surely?
    Is there anything else I can do to ensure the new role is water tight?
    Understand the new rules and who makes the determinations?
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    When is the new role due to start? and is it in the private or public sector?

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    Quote Originally Posted by CheeseSlice View Post
    When is the new role due to start? and is it in the private or public sector?
    Private sector and new role is due to start circa December.

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    Quote Originally Posted by northernladuk View Post
    At the top of this very part of the forum is a sticky thread explaining exactly what your options are and answers your questions about being there or not when the determination hit.

    Have a look at that and then if you have any more specific questions feel free to ask.

    https://www.contractoruk.com/forums/...ould-i-go.html

    Read the other thread first but a few very brief answers to your questions are..




    We don't really know but common sense dictates if you are a list saying outside and then appear on the same list as inside then it's pretty black and white. If you aren't there to be determined then who knows. Not being there does lessen the risk considerably but what that risk is we don't really know.

    Erm... why? The client determines the role. If they say outside and they've applied enough diligence to it to not be negligent there is nothing else for you to do surely?

    Understand the new rules and who makes the determinations?

    We don't really know but common sense dictates if you are a list saying outside and then appear on the same list as inside then it's pretty black and white. If you aren't there to be determined then who knows. Not being there does lessen the risk considerably but what that risk is we don't really know

    The issue that is concerning me somewhat is that I am already on the list of people they have wrote to announcing that the they will be making these determinations on. However, if I let them know that I am leaving then they may not need to do the determination but as this is based on the role I'm guessing they will still proceed with it.

    Erm... why? The client determines the role. If they say outside and they've applied enough diligence to it to not be negligent there is nothing else for you to do surely

    Would you still keep IR35 insurance in this case then? Also, is them confirming in writing they judge you outside enough of a shield in the event of an investigation?

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    Quote Originally Posted by hammertime1985 View Post
    Private sector and new role is due to start circa December.
    As the new role starts before April 2020, I believe you are doing the right thing as you're still responsible for status determination. However I would keep pushing for the clients strategy and timeline on status determination before the contract begins.

    Until the private sector gets itself in order with status determination there will be some risk and uncertainty when about to start a new contract this side of April 2020.

    I'm not aware of anything else you can do at this stage.

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    Quote Originally Posted by hammertime1985 View Post
    The issue that is concerning me somewhat is that I am already on the list of people they have wrote to announcing that the they will be making these determinations on. However, if I let them know that I am leaving then they may not need to do the determination but as this is based on the role I'm guessing they will still proceed with it.
    The list I'm talking about is HMRC really but guess it starts with the clients lists. Yes it's on the role and if they continue with the role after the person after you will get a determination yes but when it's reported to HMRC you won't be on the list of inside people. You'll have disappeared in to the ether. They have no proof you were outside and are now inside so you could have dodged a bullet. They can still investigate the old gig under the old rules just as they could do right now. I'd guess if they have a list of people outside then inside they'll be a little too busy to try come after people that have dropped off.

    I say guess as no one knows but you see the logic. If you were a pessimist then yes, they might try tie the role to you after you've left but with so much easy meat on the table that seems a lot of effort to prove it when they'll already have their hands full.

    Would you still keep IR35 insurance in this case then? Also, is them confirming in writing they judge you outside enough of a shield in the event of an investigation?
    Well surely you need to keep your insurance going for the new outside role so don't need to ask?

    Will you need insurance once your client determines you outside? Good question. Either way, my personal rule of thumb will be to keep any insurances going for one full clear tax year just to protect from retrospective claims whatever the new world looks like after April. With so many unknowns a few hundred quid to help me sleep is peanuts.
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    Quote Originally Posted by hammertime1985 View Post
    Private sector and new role is due to start circa December.
    If this is the case then you need a determination before you start. It's just too late to start and then find out in Jan it's inside.

    If they can't give you a determination for a gig starting that late I'd be a little worried about their whole approach to it.
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    Quote Originally Posted by northernladuk View Post
    If this is the case then you need a determination before you start. It's just too late to start and then find out in Jan it's inside.

    If they can't give you a determination for a gig starting that late I'd be a little worried about their whole approach to it.
    Well that was the main crux to my post. Offer on the table but have been advised that the contract is outside pre and post April. However, I have agreed provisionally based on the following:

    - contract is confirmed as outside by a IR35 tax specialist (will pay for the expensive quick turn around service - I think QDOS can do this in 24 hours??)

    - client confirms in writing that post April I am outside (waiting for their determination on this).

    I think if the above are satisfied then I am good to go.

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    Quote Originally Posted by hammertime1985 View Post
    Well that was the main crux to my post. Offer on the table but have been advised that the contract is outside pre and post April. However, I have agreed provisionally based on the following:

    - contract is confirmed as outside by a IR35 tax specialist (will pay for the expensive quick turn around service - I think QDOS can do this in 24 hours??)

    - client confirms in writing that post April I am outside (waiting for their determination on this).

    I think if the above are satisfied then I am good to go.
    Seems perfectly reasonable. If they aren't willing to give you a determination before you start I'd be worried. There is still time so go with that.

    I wouldn't stop looking for gigs though. They turn round and say it's blanket inside at the last minute then you've got nothing and are having to start again at the worst possible time ever in contracting.
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