Public sector retrospectively reviewing Public sector retrospectively reviewing
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    Default Public sector retrospectively reviewing

    I'm aware that the public sector have confirmed they have started to re-review the contracts assessed since 2017 with the understanding that those judged outside will be inside. This is following them working closely with HMRC to determine whether they were making assessments 'correctly'. The indication is that they won't retrospectively change the decision but will switch outside contracts to inside by the end of the year.

    It is clear that there is an expectation for most contract roles to be inside IR35 and reference is made to this being true for the private sector also.

    I am seeing this as another confirmatory element that HMRC are working with org's to ensure contractors are predominantly inside. I'm trying to influence clients to take a pragmatic approach and genuinely engage in assessments but it does feel like HMRC are tipping the scale somewhat.

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    The lawyers are running parliament and the civil service is running the country.

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    Quote Originally Posted by ComplianceLady View Post
    I'm aware that the public sector have confirmed they have started to re-review the contracts assessed since 2017 with the understanding that those judged outside will be inside. This is following them working closely with HMRC to determine whether they were making assessments 'correctly'. The indication is that they won't retrospectively change the decision but will switch outside contracts to inside by the end of the year.

    It is clear that there is an expectation for most contract roles to be inside IR35 and reference is made to this being true for the private sector also.

    I am seeing this as another confirmatory element that HMRC are working with org's to ensure contractors are predominantly inside. I'm trying to influence clients to take a pragmatic approach and genuinely engage in assessments but it does feel like HMRC are tipping the scale somewhat.

    I have heard that the when this is done the tax needs to be paid for the current financial year not from when the determination changes. In some instances the contractor is being asked to pay back the tax to the Agency/Public Sector. Have you seen that occur?

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    Quote Originally Posted by BlueSharp View Post
    I have heard that the when this is done the tax needs to be paid for the current financial year not from when the determination changes. In some instances the contractor is being asked to pay back the tax to the Agency/Public Sector. Have you seen that occur?
    Not at this stage no. I'm told that because it's being done in conjunction with 'new guidance' from HMRC they are able to simply issue a new contract on an inside basis and leave the old one outside.

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    Quote Originally Posted by ComplianceLady View Post
    I'm aware that the public sector have confirmed they have started to re-review the contracts assessed since 2017 with the understanding that those judged outside will be inside. This is following them working closely with HMRC to determine whether they were making assessments 'correctly'. The indication is that they won't retrospectively change the decision but will switch outside contracts to inside by the end of the year.

    It is clear that there is an expectation for most contract roles to be inside IR35 and reference is made to this being true for the private sector also.

    I am seeing this as another confirmatory element that HMRC are working with org's to ensure contractors are predominantly inside. I'm trying to influence clients to take a pragmatic approach and genuinely engage in assessments but it does feel like HMRC are tipping the scale somewhat.
    What's irksome about this is that anyone who had IR35 tax investigation for a previous period and who did not have it now, then they couldn't claim. It almost means that you'd have to maintain such insurance for the maximum period that HMRC could investigate retrospectively for.

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    Quote Originally Posted by JohntheBike View Post
    What's irksome about this is that anyone who had IR35 tax investigation for a previous period and who did not have it now, then they couldn't claim. It almost means that you'd have to maintain such insurance for the maximum period that HMRC could investigate retrospectively for.
    Why do you think that I’ve stuck with IPSE for the last 4 years and will do so for the next 2?

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    This gives the impression that there will be no retrospective consequences if you are forcibly flipped outside -> inside. Did I understand that correctly?

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    Quote Originally Posted by TwoWolves View Post
    This gives the impression that there will be no retrospective consequences if you are forcibly flipped outside -> inside. Did I understand that correctly?
    Kind of yes. The intent at this point is to just switch contracts and HMRC have given an informal nod to the fact they won't pursue the public sector body (as the idea is HMRC didn't have enough time/resource to fully support each body with guidance) but there's no mention of contracts ongoing now that flip from outside to inside that were in place pre-2017 (when the contractor was liable).

    I'm not sure how many there'd be and how palateable pursual would be for HMRC either commercially or legally.

    I didn't and don't see the risk as being retrospective pursuit of tax, the main take I got from it was that it seems all those public sector clients that did case by case assessments and have contractors working outside are being 'corrected' and told that they're aligned with all other public sector clients plus private sector (thus allaying fears of contractors moving en masse). Seems like a strategic move in my view.

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    But that's going to be based on HMRC's biased view of IR35 - the case laws hasn't changed. Surely somebody at some point is going to challenge this inside review in the courts.
    Rule Number 1 - Assuming that you have a valid contract in place always try to get your poo onto your timesheet, provided that the timesheet is valid for your current contract and covers the period of time that you are billing for.

    I preferred version 1!

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    Quote Originally Posted by BoredBloke View Post
    But that's going to be based on HMRC's biased view of IR35 - the case laws hasn't changed. Surely somebody at some point is going to challenge this inside review in the courts.
    There isn't a mechanism to do so as far as I'm aware. You can challenge HMRC giving a retrospective decision by refusing to pay and going to court but if they deduct tax at source for a new contract I'm not sure how it can be challenged?

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