outside IR35 before..inside after?

[northernladuk]

I guess being a contractor, I wouldn't have been exposed to any of the conversations on it.

Jesus ******* wept...

[BR14]

Jesus ******* wept...

aye

[ContractingBrit]

So here's the scenario, if the current client still determines the contract as outside IR35 from April onwards and gives written confirmation. I take it on as such.

Now lets imagine the worst comes true and HMRC come after me and determine it inside (wrongly or rightly). What would my liability be from April onwards? Will the client be liable for all the taxes/NI that I would have been subject to had I gone as a PAYE? What would my liability be?

[eek]

So here's the scenario, if the current client still determines the contract as outside IR35 from April onwards and gives written confirmation. I take it on as such.

Now lets imagine the worst comes true and HMRC come after me and determine it inside (wrongly or rightly). What would my liability be from April onwards? Will the client be liable for all the taxes/NI that I would have been subject to had I gone as a PAYE? What would my liability be?

There is hundreds of posts and probably stickies about it.

As of April the determination is by the end client and the end client will be the one HMRC will chase for payment... It's the same with the public sector as of 2018, if your end client is in the public sector and they say you are outside then yes you are outside.

[ContractingBrit]

payment terms March/April

Hi all, I have seen so many posts here saying if work is done before the new tax year (in March for example) and payment is made after 6 April, even March will be considered as part of the legislative change.

So I raised this with a client for who, if I do work till 31st of March, I will get the invoice paid in 30 days, as per the terms. This is what they have come back with:

"The advice we got is that it is not money going into your bank but the accounts up to 6th April so the payment terms would not cause a problem"

I do not really understand this, am I missing something? any input welcome so i can go back to them with the right understanding.

cheers

[jamesbrown]

Hi all, I have seen so many posts here saying if work is done before the new tax year (in March for example) and payment is made after 6 April, even March will be considered as part of the legislative change.

So I raised this with a client for who, if I do work till 31st of March, I will get the invoice paid in 30 days, as per the terms. This is what they have come back with:

"The advice we got is that it is not money going into your bank but the accounts up to 6th April so the payment terms would not cause a problem"

I do not really understand this, am I missing something? any input welcome so i can go back to them with the right understanding.

cheers

Look at clause 18 of the draft legislation:

https://assets.publishing.service.go...egislation.pdf

The amendments made by Part 2 of this Schedule have effect in relation to
deemed direct payments treated as made on or after 6 April 2020, and does
so even if relating to services provided before that date.

For further interpretation, look at the public sector rollout:

ESM9025 - Employment Status Manual - HMRC internal manual - GOV.UK

Notably:

The fee-payer is treated as making a payment to the worker, and the worker is treated as receiving, a payment which is to be treated as earnings from an employment (“the deemed direct payment”). That deemed direct payment is then treated as made at the same time as the chain payment made by the fee-payer.

[ContractingBrit]

Look at clause 18 of the draft legislation:

https://assets.publishing.service.go...egislation.pdf



For further interpretation, look at the public sector rollout:

ESM9025 - Employment Status Manual - HMRC internal manual - GOV.UK

Notably:

Thanks for this, so looks like their advice is incorrect?

[jamesbrown]

Thanks for this, so looks like their advice is incorrect?

Yes, sounds wrong to me. If a fee payer makes a payment on or after 6 April and fails to account for the new rules, they're in trouble w/r to any responsibilities and liabilities (not you). All subject to the final legislation, of course.

[WordIsBond]

Oh, this is such beautiful legislation.

Who is responsible for making a determination? The end client. Who is responsible for implementing the determination. The fee payer.

What is the cutoff point? The time of the payment.

What if the end client makes the final payment on 5 April and the agent makes the payment after that? Is the end client liable for not making a determination even though they have paid for the services? Is the fee payer liable for not implementing the determination, even though it hasn't been made, because they've made a payment after 5 April?

[beatfreak]

Outside inside

Hi

I am currently contracting on a large government contract for a large IT services company. QDOS have been engaged to consult on the status determination for all contractors. All contractors have been deemed inside IR35, however, QDOS themselves have reviewed a number of contracts for the period between April 2014 and March 31st 2020 and deemed them to be outside IR35.

The agency involved has now contacted all contractors and made them aware that going forward all contractors will be inside IR35 and subject to PAYE working via an umbrella company on their PSL. Clearly any contracts post March 31st (when our current contracts end) will be new contracts rather than extensions and are going to be worded differently to make sure we are absolutely water tight cast iron inside IR35.

It makes you wonder why QDOS are advising companies whose contractors, by their own status determination based on current contracts, are outside IR35 should then be deemed inside in the new financial year. Clearly QDOS are advising companies not on whether their contractors are inside or outside IR35, but how they can make sure the are inside.

It seems to me this is morally corrupt and they are just playing both sides off against each other. Advise all companies their contractors are inside IR35 and take a cut, scare the sh1t out of all contractor and rake in the insurance premiums! Lets not forget IR35 rules are not changing, only the party that makes the status determination.

Surely all this will do is reduce the tax take from accountants, stamp duty, vat, mortgage providers, specialty contractor service providers et al let alone the 20% vat paid every time you make a purchase!

Rant over....