outside IR35 before..inside after? outside IR35 before..inside after?
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  1. #1

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    Default outside IR35 before..inside after?

    Hi have people discussed, what happens if you were initially deemed outside IR35 and been working as such. However, now with the rule changes in the new tax year, you are deemed inside IR35. Is that going to be an issue? My client hasn't made the decision yet but looking at what could happen if it does flip.
    can some one please link me to the conversation.
    thanks

  2. #2

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    Quote Originally Posted by ContractingBrit View Post
    Hi have people discussed, what happens if you were initially deemed outside IR35 and been working as such. However, now with the rule changes in the new tax year, you are deemed inside IR35. Is that going to be an issue? My client hasn't made the decision yet but looking at what could happen if it does flip.
    can some one please link me to the conversation.
    thanks
    Nobody knows.

    Some say as you will be inside IR35 going forward, HMRC will see that as a "win" and not bother looking any closer.

    Some say the fact that you are going to be inside IR35 doing essentially the same role as you are currently doing outside IR35, HMRC will argue that you should always have been inside and will come calling.

    But absolutely nobody outside of the decision-makers at HMRC knows.

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    aah fair enough. so annoying HMRC! its so close to change still no one really can say 100% what is going to happen

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    Quote Originally Posted by Amanensia View Post
    But absolutely nobody outside of the decision-makers at HMRC knows
    I doubt even they know.

    I consider it a massive risk, myself. HMRC have said they won't use it as a basis to open investigations, but I don't trust them not to change their minds.

    The way I see it, if you accept an "inside" assessment when you've been working "outside", it could be perceived as a tacit admission that you should've been "inside" all along. Most others I've spoken to feel the same way.

    I may accept an "inside" contract in the future (even though I don't think I should have to), but not with my current client, and probably not with a client I have worked with recently. The risk is just too great.

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    I will not be renewing my contract with my client in March for this very reason.

    If you are currently operating outside IR35 and renew your contract where the only change would to be having you operate inside IR35, then HMRC are well within their rights to question whether you were ever outside IR35 in the first place. If you have signed a legally binding document, such as a contract, where you are accepting your clients determination of their assessment of the IR35 classification, then you pretty much have no defence.

    Why did you rule yourself outside IR35 and then agree that the same; contract, scope of work, for the same client, was actually inside IR35?

    Expect to pay some back tax if you do that. If they decide that you deliberately falsified your own assessment of IR35, then expect to pay double.

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    I suppose it all depends on your 'appetite for risk', as my agent put it.

    For me, where there is risk, there is no risk, ie. I wont be risking it, will wait to till post-April 2019 and survey the landscape then.

    There are far too many uncertainties in the contracting market right now for my liking.

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    I haven't accepted the new contract yet. They haven't given me it as they are still deciding what happens come March. Hence why I want to know what other's risk appetite.

    However, I can see sense in the fact that how can suddenly you be inside IR35 providing the same service. Could act as red flag.

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    Quote Originally Posted by Si666 View Post
    I will not be renewing my contract with my client in March for this very reason.

    If you are currently operating outside IR35 and renew your contract where the only change would to be having you operate inside IR35, then HMRC are well within their rights to question whether you were ever outside IR35 in the first place. If you have signed a legally binding document, such as a contract, where you are accepting your clients determination of their assessment of the IR35 classification, then you pretty much have no defence.

    Why did you rule yourself outside IR35 and then agree that the same; contract, scope of work, for the same client, was actually inside IR35?

    Expect to pay some back tax if you do that. If they decide that you deliberately falsified your own assessment of IR35, then expect to pay double.
    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.
    Blog? What blog...?

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    Quote Originally Posted by ContractingBrit View Post
    I haven't accepted the new contract yet. They haven't given me it as they are still deciding what happens come March. Hence why I want to know what other's risk appetite.

    However, I can see sense in the fact that how can suddenly you be inside IR35 providing the same service. Could act as red flag.
    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).

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