Determination rules and MVL timeline Determination rules and MVL timeline
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  1. #1

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    Default Determination rules and MVL timeline

    Having spent some time digesting the issues discussed here, including the very excellent stickies, I still have the following questions regarding April 2020 which hopefully someone may be able to answer:

    1. Is the end client always required to make a status determination, even if the contractor has terminated their limited company contract and moved to an umbrella arrangement, or are determinations only required for contractors operating through a limited company?
    2. What is the typical time taken to complete an MVL?


    Background: I've already told the client I won't be staying past the end of Feb and therefore not to do a determination for me. However the contract pays well and the market is absolutely dead out there, so a fallback - albeit potentially riskier - option would be for me to switch to an umbrella at contract renewal time (1 Jan) and then push through an MVL on my Ltd Co ASAP to try and minimise the likelihood of any retrospective HMRC antics.

    Feel free to shoot me down but, if you do, I'd very much appreciate you explaining clearly why this is an impractical or just plain stupid option. I'm not asking anyone to make my decisions for me, just trying to gather as much useful info as possible.

    TIA

  2. #2

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    Quote Originally Posted by Snooky View Post
    Having spent some time digesting the issues discussed here, including the very excellent stickies, I still have the following questions regarding April 2020 which hopefully someone may be able to answer:

    1. Is the end client always required to make a status determination, even if the contractor has terminated their limited company contract and moved to an umbrella arrangement, or are determinations only required for contractors operating through a limited company?
    2. What is the typical time taken to complete an MVL?


    Background: I've already told the client I won't be staying past the end of Feb and therefore not to do a determination for me. However the contract pays well and the market is absolutely dead out there, so a fallback - albeit potentially riskier - option would be for me to switch to an umbrella at contract renewal time (1 Jan) and then push through an MVL on my Ltd Co ASAP to try and minimise the likelihood of any retrospective HMRC antics.

    Feel free to shoot me down but, if you do, I'd very much appreciate you explaining clearly why this is an impractical or just plain stupid option. I'm not asking anyone to make my decisions for me, just trying to gather as much useful info as possible.

    TIA
    Personally I would not feel comfortable switching to a brolly and staying at the same client. It just looks too obvious a move and HMRC will no doubt view the ER claim with suspicion.

    If the client needs you then get them to make your contract and working conditions fall outside of IR35, if possible I mean.

  3. #3

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    Determination is in the role NOT you. If the role will exist after you they still have to make the determination.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  4. #4

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    To answer your second question, our sister company MVL Online tends to suggest 4-6 weeks to get first distribution of ~75% of the company's funds, and 4-6 months to get clearance and pay out the balance. That latter timescale is currently higher than it has been historically, hopefully HMRC will get back on top of things and it will come down again.

    If your fear is that:
    - your client does a determination in (say) Feb 2020,
    - you've already left and are going through an MVL,
    - HMRC somehow find out about the determination and try to scupper your MVL,
    then personally I think you're being paranoid.

    Personally I don't particularly feel that drifting from Ltd Co worker to umbrella worker at the same client is a big risk.

  5. #5

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    Are you inside or outside IR35 right now or just whinging it and saying you are outside ?


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  6. #6

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    Quote Originally Posted by northernladuk View Post
    Determination is in the role NOT you. If the role will exist after you they still have to make the determination.
    I bet you've covered this before, but could you remind me why you think that is?

    This article says that a role based determination would be non-compliant
    This new legislative requirement is intended to help combat misclassification of status due to non-compliant blanket or role-based assessments

    Yes the role will exist after you, however they are supposed to do another determination reflecting any differences in individual working practices.

  7. #7

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    Quote Originally Posted by Maslins View Post

    Personally I don't particularly feel that drifting from Ltd Co worker to umbrella worker at the same client is a big risk.
    How so Maslins - keen to understand as I thought the risk was a real one.

    I'm in a similar predicament to the OP. My gig ends soon and I have an option to go PAYE for a 'short term' - possible 2/3 months I am guessing but feeling quite wary about this - same client, role, etc versus previous outside IR35 status for 2 years here.

    I'm actively looking as a new contract elsewhere would be the perfect out ... but as the market is dead my real options are boiling down to take the PAYE or bench time.

  8. #8

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    It's going to be contract merry go round soon with everyone leaving gigs they can't commute to so although it's dead now I think it's going to get crazy soon. All inside gigs mind but still, plenty to choose from.

    I really don't think getting attached to a client with 2 years outside and then determined inside a good idea and with all the people moving there should be enough roles not to.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  9. #9

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    Quote Originally Posted by Paralytic View Post
    It's going to be contract merry go round soon with everyone leaving gigs they can't commute to so although it's dead now I think it's going to get crazy soon. All inside gigs mind but still, plenty to choose from.
    I can see the London market being hit the hardest here. People who currently commute and expense will simply find the cannot afford to do so. I suspect in other parts of the country where expenses are typically less, people will just take the hit until they see how the market pans out.

    Quote Originally Posted by northernladuk View Post
    I really don't think getting attached to a client with 2 years outside and then determined inside a good idea and with all the people moving there should be enough roles not to.
    The poster you refer to is not going 2 years outside to determined inside. Its 2 years outside to no determination and a policy decision to engage with contracts via Umbrella/PAYE only.

    I'd assume there's a reduced risk of an HMRC investigation here, since there's no determination to share with HMRC.

    However, if HMRC do investigate for some other reason, I suspect the impact could be pretty much same as moving outside to inside.
    Last edited by Paralytic; 16th November 2019 at 10:15.

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    duplicate

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