• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

Who to ask about IR35 status

Collapse
This topic is closed.
X
X
Collapse
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    Who to ask about IR35 status

    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.

    #2
    Have you read these?

    April 2020 changes to off-payroll working for clients - GOV.UK

    and

    Fee-payer responsibilities under the off-payroll working rules - GOV.UK
    Last edited by Paralytic; 21 October 2019, 09:23.

    Comment


      #3
      "Early next year" is too imprecise. You need to ensure the final payment is made before the end of March to escape the new rules. However it appears on the face of it that your client is the consultancy, not the end client. Read the quoted guidance very carefully...

      An ongoing support contract, properly drafted, should be a mile away from IR35 anyway. I assume that will be between you and the consultancy, so they need to accept a proper B2B contract for the service, else you're back to square one.
      Blog? What blog...?

      Comment


        #4
        Originally posted by malvolio View Post
        "Early next year" is too imprecise. You need to ensure the final payment is made before the end of March to escape the new rules. However it appears on the face of it that your client is the consultancy, not the end client. Read the quoted guidance very carefully...

        An ongoing support contract, properly drafted, should be a mile away from IR35 anyway. I assume that will be between you and the consultancy, so they need to accept a proper B2B contract for the service, else you're back to square one.
        So if a chain ia layed out like so Contractor -> Agency -> Consultancy (Small company under 50 people, essentially a software shop) -> End client, then I don't need to worry about IR35 as my client is exempt due to the size?

        Comment


          #5
          Originally posted by cannon999 View Post
          So if a chain ia layed out like so Contractor -> Agency -> Consultancy (Small company under 50 people, essentially a software shop) -> End client, then I don't need to worry about IR35 as my client is exempt due to the size?
          I'd be *very* wary assuming that. You'd be daft to think that HMRC won't have considered that people would try band together to set up a "small consultancy" to try to avoid the need for a determination.

          See this (old but still relevant): IR35 reforms: Where consultancies are caught

          Effectively, if the work the contractor is doing for a client would otherwise be classed as employee work, it falls under IR35, nomatter the chain of command from that client to the contractor's PSC. A question that can help here is: Is the consultancy providing a resource or a service?


          (I'm mostly ignoring the "don't need to worry about IR35" comment above, but want to add that you always need to worry about it - remember the only change in April 2020 is who makes the determination)
          Last edited by Paralytic; 21 October 2019, 10:00.

          Comment


            #6
            Originally posted by Paralytic View Post
            stion that can help here is: Is the consultancy providing a resource or a service?


            (I'm mostly ignoring the "don't need to worry about IR35" comment above, but want to add that you always need to worry about it - remember the only change in April 2020 is who makes the determination)
            Nobody said that. Understanding IR35 and behaving as a service providing professional is a key part of your job as a contractor, something some of us have been saying for at least 15 years. If more people took notice of that kind of thinking, we'd all be a lot better off (in several senses!)
            Blog? What blog...?

            Comment


              #7
              Originally posted by malvolio View Post
              Nobody said that.
              ???

              cannon999 specifically said that if engaging via a consultancy of less than 50 people

              then I don't need to worry about IR35 as my client is exempt due to the size?

              Comment


                #8
                Originally posted by Paralytic View Post
                I'd be *very* wary assuming that. You'd be daft to think that HMRC won't have considered that people would try band together to set up a "small consultancy" to try to avoid the need for a determination.

                See this (old but still relevant): IR35 reforms: Where consultancies are caught

                Effectively, if the work the contractor is doing for a client would otherwise be classed as employee work, it falls under IR35, nomatter the chain of command from that client to the contractor's PSC. A question that can help here is: Is the consultancy providing a resource or a service?


                (I'm mostly ignoring the "don't need to worry about IR35" comment above, but want to add that you always need to worry about it - remember the only change in April 2020 is who makes the determination)
                I should probably rephrase. I am 100% sure that my working practices put me well outside the IR35 as I am providing a service. I choose my hours, where I work and choose which work I accept and which I do not accept. Sometimes I will work 20 hours sometimes I will work 30, and other times 50. I am deffinitely in control of the service I am providing and I actually run a company on the side which isn't related to my contracting one.

                However as I understand from April it's the client who makes the determination. So I need to understand who to kick about my determination status (bare in mind, the end client isn't located in UK!)

                Comment


                  #9
                  Originally posted by cannon999 View Post
                  However as I understand from April it's the client who makes the determination. So I need to understand who to kick about my determination status (bare in mind, the end client isn't located in UK!)
                  So the actual question is: who determines who is responsible for making the determination? The end client not being in the UK does add another layer of complexity.

                  I'd be asking the people you have your contract with - the agency.
                  Last edited by Paralytic; 21 October 2019, 10:28.

                  Comment


                    #10
                    To the OP - it's not your place to make the "in/out" determination. That falls on the end client and you have no (legal) say in that.

                    The present supplied of people (consultancy) becoming a supplier of services (consultancy) will be looked at very carefully by HMRC and the consultancy is likely to be on the wrong end of tax liability, penalties etc if they are not really supplying services.
                    Best Forum Adviser & Forum Personality of the Year 2018.

                    (No, me neither).

                    Comment

                    Working...
                    X