HMRC view on blanket ban? Have we all seen this- taken off LinkedIn HMRC view on blanket ban? Have we all seen this- taken off LinkedIn - Page 3
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  1. #21

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    Quote Originally Posted by Paralytic View Post
    You seem to be conflating banning PSCs and moving inside. These are two very different things. Banning PSC = No SDS. No SDS = no insider determination. Its not really that complicated.

    So, for the client, yes, banning PSCs removes all risk on their side,
    This is also what I was trying to get at in another thread. HMRC have done their best to make this whole situation as confusing as possible - I imagine this is their plan to conflate the rules so that no one can actually follow them properly. Or perhaps their limited intellect doesn't allow them to set out logical and comprehensive criteria.

    But yes as I see it:
    - if you're contracting at a client and are currently self-determined as outside IR35
    - and assuming that client won't contemplate giving an outside SDS to anyone in April
    - and you want to remain contracting at that client
    … then the least-risky option is for you to contract via PAYE from April onwards.

    Of course it's less risky if you leave the client, but not everyone has that choice. And you remain at the client you'd need to be pretty sure you could prove the self-determined outside IR35 status, if HMRC ever came knocking for retro tax.

  2. #22

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    Quote Originally Posted by BritishLad88 View Post
    Yes, 2 different things but are linked so need to view them closely together.

    Banning PSCs = Contractors can't be outside anymore = Move Inside or Leave or Perm.

    Of course could move Perm and that would remove risk for both sides completely but doesn't seem like most contractors are choosing this option though.
    If leave, clients won't be happy as they would be losing their resources. So they'll try upmost best to convince people to move inside.

    So that leaves moves inside. Like I say, contractors moving inside will raise red flag = HMRC *could* start investigation = which would lead back to the client.

    Hope that makes sense!
    No, it doesn’t make sense. You can go via an umbrella and not be outside or inside, as no determination was ever needed to be made.

    You still seem to be under the impression that client Banning PSCs and asking contractors to go via an umbrella is equivalent to an inside determination. It most definitely is not.

    Maybe if I play something back close to what you said you’ll get it.

    Banning PSCs = Contractors can't be outside or inside anymore
    Last edited by Paralytic; 9th February 2020 at 23:31.

  3. #23

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    Online yesterday an agent (who I've been having discussions with regarding inside IR35 adverts and other things) said there are umbrella firms happy to treat you as deemed inside and willing to both pay the contractor's limited company (instead of paying the contractor directly) and help with an SDS appeal on the basis that no status has been issued.

    Now personally that's an insane approach as the client and agency really need to get shot of anyone taking this approach but I suspect some people may adopt it in which case was the Blanket ban the best approach.

    And yes I do know that with a blanket ban paying a PSC is probably breach of contract (allowing immediate termination) but it does show the can of worms isn't 100% clear cut even with a blanket approach.
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  4. #24

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    Quote Originally Posted by Paralytic View Post
    No, it doesn’t make sense. You can go via an umbrella and not be outside or inside, as no determination was ever needed to be made.

    You still seem to be under the impression that client Banning PSCs and asking contractors to go via an umbrella is equivalent to an inside determination. It most definitely is not.

    Maybe if I play something back close to what you said you’ll get it.

    Banning PSCs = Contractors can't be outside or inside anymore
    For the contract going forward past April 6th yes, but I would say Hector would view anyone going umbrella or direct PAYE as an automatic inside determination, whether the client issued an SDS or not, and quite happily go back and check the previous contract(s), when it becomes your turn.

  5. #25

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    Quote Originally Posted by Jolie View Post
    For the contract going forward past April 6th yes, but I would say Hector would view anyone going umbrella or direct PAYE as an automatic inside determination, whether the client issued an SDS or not, and quite happily go back and check the previous contract(s), when it becomes your turn.
    Not at all. An SDS is a tangible decision. Going brolly has not bearing on it. It is a pretty poor assumption that with no SDS a contractor via brolly is inside.

    HMRC will have to carry out an investigation as they do now as they don't have the evidence to compare.

    Granted these people will be second on the list behind the inside outside crowd but I don't think your statement is correct.
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  6. #26

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    Well with an umbrella you still have the T&S issue. If you can demonstrate you're not subject to SDC, then you can still claim expenses. If you're not subject to SDC, then, if you were operating via a PSC and not an umbrella, you should have an outside determination. Although that doesn't really have any effect at all on the blanket ban approach, but it doesn't remove the need to assess your position on SDC, albeit not the client's problem now.

  7. #27

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    Quote Originally Posted by Jolie View Post
    For the contract going forward past April 6th yes, but I would say Hector would view anyone going umbrella or direct PAYE as an automatic inside determination, whether the client issued an SDS or not, and quite happily go back and check the previous contract(s), when it becomes your turn.
    Not quite - you need to be very clear here.

    Assuming HMRC adopts a scatter gun approach a blanket ban on PSCs will protect you more than the end client making an inside determination. I can easily see a UK subsidiary stating that while I believe xyz was and is outside, our blanket ban is a corporate decision from on high.

    Now continuing after a blanket ban is probably a risk too far for me but for others it's less dangerous than continuing after an actual determination.

    But as a commented above blanket bans are fine unless and until contractors try and be clever and force an actual determination.
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  8. #28

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    Quote Originally Posted by TNA57 View Post

    Surely even clients must be confused by now. What is reasonable care really....


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  9. #29

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    Quote Originally Posted by eek View Post
    Not quite - you need to be very clear here.

    Assuming HMRC adopts a scatter gun approach a blanket ban on PSCs will protect you more than the end client making an inside determination. I can easily see a UK subsidiary stating that while I believe xyz was and is outside, our blanket ban is a corporate decision from on high.
    Completely agree, but to be clear, I was stating how I believe Hector would view the evidence.

    You have an outside contract before, then there's a ban on PSC's and you move to a brolly under PAYE.

    You have other choices, one being to leave.

    Also as has been pointed out, there are clients and pimps who are clearly happy for you to continue operating under your PSC and I am now wondering for those who are pretty much watertight outside, whether that is a beneficial approach.

  10. #30

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    Quote Originally Posted by northernladuk View Post
    Not at all. An SDS is a tangible decision. Going brolly has not bearing on it. It is a pretty poor assumption that with no SDS a contractor via brolly is inside.

    HMRC will have to carry out an investigation as they do now as they don't have the evidence to compare.

    Granted these people will be second on the list behind the inside outside crowd but I don't think your statement is correct.
    If HMRC does chase people who switch after april up it will be via a scattergun approach.

    HMRC will generate a report with large bills attached to it and ask for details why you don't think it should be paid. As the information they have comes from an agency report the end client status won't matter to HMRC until the responses arrive (and even then it may make no difference).
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