Possible defense against retrospective investigation.

[DaveB]

Just a thought experiment, not claiming this will work or not. opinions welcome.

Scenario :

Working with a client in an outside role that has been documented with agreed working practices and covered by insurance.

Client decides the role is now inside from April 2020. Nothing else changes.

I stay on having negotiated a rate to compensate for the loss of income and state that I believe the status decision is incorrect.

HMRC come calling with a retrospective investigation.

I provide evidence of previous outside status and point to the client decision as being incorrect.

Insurance covers the investigation.

If I lose to HMRC insurance pays out (in theory)

If I win Client co. becomes liable for unfairly deducted tax and NI.

[pscont]

Just a thought experiment, not claiming this will work or not. opinions welcome.

Scenario :

Working with a client in an outside role that has been documented with agreed working practices and covered by insurance.

Client decides the role is now inside from April 2020. Nothing else changes.

I stay on having negotiated a rate to compensate for the loss of income and state that I believe the status decision is incorrect.

HMRC come calling with a retrospective investigation.

I provide evidence of previous outside status and point to the client decision as being incorrect.

Insurance covers the investigation.

If I lose to HMRC insurance pays out (

in theory

)

If I win Client co. becomes liable for unfairly deducted tax and NI.

Isnt this the whole problem?

[pscont]

Seriously, I think it will be very hard to show that pre-April contact was out of IR35, once client says it is inside (albeit for period after April).

[JohntheBike]

Seriously, I think it will be very hard to show that pre-April contact was out of IR35, once client says it is inside (albeit for period after April).

There appear to be some clients, mine included. who have engaged professional organisations like QDOS to assess the contracts. They can only do this on current contracts. So it would be perfectly possible for the client to decide that the role is inside from April and not compromise a pre April outside assessment.

[jamesbrown]

For insurance purposes, there must be a reasonable prospect of success. In the circumstances you describe, there probably isn’t. You would be in a weak position, unless the client had not taken reasonable care with the SDS.

[jamesbrown]

So it would be perfectly possible for the client to decide that the role is inside from April and not compromise a pre April outside assessment.

Extremely unlikely without a dramatic change in working practices or negligence with the SDS (and there wouldn’t be if QDOS were involved).

[JohntheBike]

Extremely unlikely without a dramatic change in working practices or negligence with the SDS (and there wouldn’t be if QDOS were involved).

agreed, but if there were major changes in the working practises, then this would be the case.

[JohntheBike]

For insurance purposes, there must be a reasonable prospect of success. In the circumstances you describe, there probably isn’t. You would be in a weak position, unless the client had not taken reasonable care with the SDS.

I've already ironed this out with QDOS for my own personal position. They are prepared to cover me because they have assessed my current contract as outside.

[jamesbrown]

agreed, but if there were major changes in the working practises, then this would be the case.

Yes, but it would have to occur in reality. If you’re doing the same thing in the same way, the risk is there, regardless of what the earlier contract said.

[jamesbrown]

I've already ironed this out with QDOS for my own personal position. They are prepared to cover me because they have assessed my current contract as outside.

I’m talking to the OP.