Clarification re IR35 Status. It's not good

[simes]

So all hmrc have done is make a mess of the contractor market.

For the moment, yes.

But in 1999 when IR35 was introduced, HMRC very helpfully offered contractors free assessments of their contracts to see if they were In or Outside. Surprisingly, all who took advantage of this offer were found Inside.

Fast forward a few years and all the contractors have a better view of just what HMRC know of their own law, and just how often they win when they take someone to court.

We will just have to wait a while until the clients stop talking to PWC, EY and HMRC, and start talking to QDOS, to contractors and reading case law before they too will know the reality.

But yes, in the short term, HMRC have totally screwed up professional flexible working. I'm sure they think it's been good day's work.

[JoJoGabor]

QDOS are doing an excellent job of talking to clients who actually engage them. I met with a friend today who's client are working with QDOS to assess each role and where found inside IR35, to see how they can engage with contractors to ensure the role is outside IR35.

[PTP]

The risk STAYS WITH THE END CLIENT....

What you on about?

It’s well documented/been said tonnes of times that it’s the FEE PAYER that bears the risk. The client only makes the assessment.

[Manic]

Explained here...

[jamesbrown]

What you on about?

It’s well documented/been said tonnes of times that it’s the FEE PAYER that bears the risk. The client only makes the assessment.

Except when the client fails in their responsibilities (e.g., to prepare the SDS) or fraud is involved. So, the fee payer is liable, by default.

[krytonsheep]

What you on about?

It’s well documented/been said tonnes of times that it’s the FEE PAYER that bears the risk. The client only makes the assessment.

It is the end client who is liable if they get it wrong. Hence why NHS digital ended up owing HMRC £4.3 million and not any agencies.

IR35 liability from April 2020: Who’s liable, for what and when?

[LetterBox]

What you on about?

It’s well documented/been said tonnes of times that it’s the FEE PAYER that bears the risk. The client only makes the assessment.

That's true enough, I just took it to it's natural end.

Client says you're outside I see no reason why the agent would not go along with it, if it's wrong then the client is liable. Client says you're inside and the agent goes along with it, if the contractor at some point in the future makes a successful argument, then the client is liable.

The agency could make themselves liable by going against the clients determination, but i see no reason for the agent to determine you inside if the client declares you outside.

But I have actually experienced the thought process of a small agency who I worked through who really only had a few niche projects for a single PS company. In March 2017 I asked what they were planning to do, both them and the PS client. The director of the agency told me directly in a meeting that if the PS client determined inside, they would offer me (and all other contractors) an outside contract. The logic being that we were all prepared to walk to private sector AND from the agency, if they were chased, this was their only client, if that cash cow disappears then so does the agency.

Crash and burn scenario, all on black.

[krytonsheep]

The agency could make themselves liable by going against the clients determination

In March 2017 I asked what they were planning to do, both them and the PS client. The director of the agency told me directly in a meeting that if the PS client determined inside, they would offer me (and all other contractors) an outside contract.

What you have described is tax evasion and comes under the Corporate Criminal Offence legislation which took effect on 30 September 2017.

Client says you're inside and the agent goes along with it, if the contractor at some point in the future makes a successful argument, then the client is liable.

The client determines if a contract is inside or outside. If a contractor wants to accept a contract that is inside, then challenge the determination with the client, they can, but the client isn't liable to compensate the contractor for reduced earnings during that initial inside IR35 period if they agree the contract is outside ( if that's what you mean).

[LetterBox]

What you have described is tax evasion and comes under the Corporate Criminal Offence legislation which took effect on 30 September 2017.


The client determines if a contract is inside or outside. If a contractor wants to accept a contract that is inside, then challenge the determination with the client, they can, but the client isn't liable to compensate the contractor for reduced earnings during that initial inside IR35 period if they agree the contract is outside ( if that's what you mean).

Just repeating what happened, not saying I agree with it. No idea if they went ahead with it as I secured a private sector contract the following week so left anyway. He may have been blowing off steam, miffed that he was about to lose his contractors.

Interesting on your 2nd point, it really does make any kind of future appeals process pointless. Off-Payroll April 2020 really is becoming a noose.

[craigy1874]

Really hate when people say 'PS' as if it couldn't mean public sector or private sector