Client deems inside IR35...rate Client deems inside IR35...rate
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  1. #1

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    Default Client deems inside IR35...rate

    If the end client deems an existing contract to be inside of IR35 then what are people thinking of doing in terms of rate?
    Are you expecting to just take the tax hit or to increase rates to compensate?
    Your friendly neighbourhood VirtualMonkey - Not giving financial advice since...well...ever.

  2. #2

    More time posting than coding


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    Quote Originally Posted by VirtualMonkey View Post
    If the end client deems an existing contract to be inside of IR35 then what are people thinking of doing in terms of rate?
    Are you expecting to just take the tax hit or to increase rates to compensate?
    You're asking that as if its the contractors decision...

    I think only a very few, who are in a strong bargaining position in relation to their skills availability in the market, will have such a choice. Most will be told to accept or go.

    But before that, you really should ask yourself whether you'd want to stay at a client that has determined your current role inside IR35, taking into account the potential liability you have if/when HMRC come calling for backdated tax for the entirety of the contract.
    Last edited by Paralytic; 21st October 2019 at 08:42.

  3. #3

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    Quote Originally Posted by Paralytic View Post
    You're asking that as it its the contractors decision...

    I think only a very few, who are in a strong bargaining position in relation to their skills availability in the market, will have such a choice. Most will be told to accept or go.

    But before that, you really should ask yourself whether you'd want to stay at a client that has determined your current role inside IR35, taking into account the potential liability you have if/when HMRC come calling for backdated tax for the entirety of the contract.
    You're right..i should have said 'try' to increase rates
    Your friendly neighbourhood VirtualMonkey - Not giving financial advice since...well...ever.

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    Quote Originally Posted by zerosum View Post
    Given a contract chain that looks like this:
    My company->Agency->Consulting firm->End-client

    End-client is a sizeable international charity, turnover definitely >£10m. Apart from core security IT functions they outsource everything. (Which doesn't mean that getting C-level sign-off on IR35 status is going to be easy). I'm working on a project; when the project is delivered early next year, the role ends, and we've already been discussing a possible support contract for the future based on number of incidents per billable time period.

    Either the consulting firm or I can exercise a right of substitution. The end-client already asked if I could send in a replacement when I mentioned to them I would be unavailable for a period, although the timeframe didn't work for getting someone up to speed.

    Do I need to try and get sign-off about IR35 determinations from the end-client, the consulting firm, or both? It's definitely the farthest outside IR35 I think I've ever been, but actually proving that per these new HMRC stipulations is the challenge. It would be quite absurd (and I think very open to challenge) if the end-client judged me inside IR35 to save on hassle.
    Creating a new thread instead of hijacking another one would be a good start

  5. #5

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    Quote Originally Posted by VirtualMonkey View Post
    If the end client deems an existing contract to be inside of IR35 then what are people thinking of doing in terms of rate?
    Are you expecting to just take the tax hit or to increase rates to compensate?
    Client I worked at put contractors inside IR35 which I thoroughly disputed.

    Asked them if the rate would be increased - they said no.

    Expect this will be the case at the majority of places.

  6. #6

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    Default Rate Reduction?

    Employers NI will come out of contractors rate, as well as accruals for holiday pay.

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