outside IR35 before..inside after?

[Superfly]

I am pretty much in the same situation. QDOS review, working practices and my own impression tells me i am outside as of now, but if the client disagrees in the new year, not much that can be done. As a last resort i am planning to close down MyCo, get the contract changed in terms of role description, title, working practices and take a month long break between starting again (INSIDE IR35 via a brolly).

But if you have your determination carried out by your client and you're found to be inside then you are already at risk of an investigation regardless of whether you stay with the client or not. The determination made by the client that you have been with for the past x number of months/years has found you to be inside.

Best not to stick around to have a determination done.

[Si666]

Hang on a minute.

This all depends on who made the original outside IR35 determination, how good it is (e.g. if a professional reviewer is happy then everyone should be) and if the now inside determination has been challenged and verified.

We still have a part to play in these scenarios: just because companies can't be arsed to read the legislation properly doesn't mean we have to accept what we're being told. You can always fight back - in fact the more that do, the better. Section 10 states quite clearly that you must have a specific determination.

It will be the contractor who initially determined it to be outside of IR35 (albeit maybe with the advice of someone else, it is the contractor who owns the risk).

If the contractor then signs an identical contract for the same client that is inside IR35, they are admitting a fault in their initial assessment of the contract (Outside) and endorsing the clients assessment (Inside). HMRC are then entitled to back tax it appropriately.

By not signing the new contract you are standing by your initial assessment. That is your defence.

[ComplianceLady]

It will be the contractor who initially determined it to be outside of IR35 (albeit maybe with the advice of someone else, it is the contractor who owns the risk).

If the contractor then signs an identical contract for the same client that is inside IR35, they are admitting a fault in their initial assessment of the contract (Outside) and endorsing the clients assessment (Inside). HMRC are then entitled to back tax it appropriately.

By not signing the new contract you are standing by your initial assessment. That is your defence.

I do think there's a inaccurate perception though - I've yet to speak to a client who will allow 'inside IR35' working. Clients are informally assessing roles, then those that are not outside are offered on a PAYE/Umbrella basis - IR35 is not considered and so there is no determination nor 'inside IR35' contract.

Clients are mindful of the fact umbrella is not as financially attractive so if they can ease the retrospective risk for contractors then they seem willing.

[malvolio]

Both wrong, sadly.

[northernladuk]

I do think there's a inaccurate perception though - I've yet to speak to a client who will allow 'inside IR35' working. Clients are informally assessing roles, then those that are not outside are offered on a PAYE/Umbrella basis - IR35 is not considered and so there is no determination nor 'inside IR35' contract.

I'd be a little surprised if that is the standard way forward. Yes some of the big boys have done it but can't see that being universal. All the public sectors went inside with no hint of avoiding a determination so don't see it being the answer.

Clients are mindful of the fact umbrella is not as financially attractive so if they can ease the retrospective risk for contractors then they seem willing.

I find this very difficult to believe indeed. I can't imagine this was a consideration for any of the banks and the like we've heard off so far and can't believe they'll deviate from advice from tax specialists just to help contractors.

[Si666]

I do think there's a inaccurate perception though - I've yet to speak to a client who will allow 'inside IR35' working. Clients are informally assessing roles, then those that are not outside are offered on a PAYE/Umbrella basis - IR35 is not considered and so there is no determination nor 'inside IR35' contract.

Clients are mindful of the fact umbrella is not as financially attractive so if they can ease the retrospective risk for contractors then they seem willing.

Guess it depends on the client. I've heard of several who have already declared that they will push contractors inside IR35 next year. I'm just going to take a short term gig with a new client in the new year, then re-evaluate the situation after April. Might go over seas again if the landscape isn't good.

[ContractingBrit]

When I had a chat with my client, what they said is they are going to extend contract till end of Feb. Between now and then, they want to clarify this position. I did make it clear that if it is suddenly deemed inside, when I have been operating as outside, exposes me to risk for retrospective taxation/NI.

To be honest they are taking advise, but they are saying its still up in the air. So changing clients and finding a new gig may be a sensible option atleast for damage limitation if nothing else.

[malvolio]

When I had a chat with my client, what they said is they are going to extend contract till end of Feb. Between now and then, they want to clarify this position. I did make it clear that if it is suddenly deemed inside, when I have been operating as outside, exposes me to risk for retrospective taxation/NI.

To be honest they are taking advise, but they are saying its still up in the air. So changing clients and finding a new gig may be a sensible option atleast for damage limitation if nothing else.

Quite possibly, although arguing about the impact to you in terms of taxation won't win any friends: better to focus on the loss of operating expenses and pensions savings you will incur...

Just be aware that the effective deadline is getting paid before April 5th 2020.

[ContractingBrit]

yh good point!

[Snooky]

Both wrong, sadly.

Who, or what, are both wrong? And why?