Outside IR35. Who suffers if it's the wrong call?

[Paralytic]

Start with the guy that won't accept the risk. You've got 6 weeks to get rid of him.

Reading between the lines, NLUK knows a guy....

[LondonManc]

Thanks guys, that's helpful to know.

I've only been here since Oct and expiry is end Mar anyway, so the issue is one of new contract for the future. They've really worked hard to make sure it's possible, including proposing putting named substitute through security and giving them a badge.

It's just the one person unhappy to underwrite it and insisting the CEO signs it off. Very, very big clientco, so achieving that will take 3 months. I just need this objector to grow a pair.



That is very useful to know.

Have you tried the CEST tools to get a determination on your contract? An outside determination on that and a QDOS approved contract and working practices review put in front of your client may convince them that you are carrying out due dilligence like a non-permietractor would do. If they get those assurances then there may be a chance of them encouraging other contractors in the right roles to do the same.

[jamesbrown]

There is some incorrect information above. The Fee Payer is liable once the client has completed an SDS with reasonable care and provided it to the supply chain. The Fee Payer is the closest UK entity to the PSC. However, the transfer of debt clauses allow for liability to be transferred to any entity in the supply chain above the PSC if HMRC cannot acquire the tax due within a reasonable timeframe. In the event of fraud, even the PSC and the individual contractor could become liable. In summary, the entire supply chain above the PSC is at risk, but primarily the Fee Payer.

[ladymuck]

There is some incorrect information above. The Fee Payer is liable once the client has completed an SDS with reasonable care and provided it to the supply chain. The Fee Payer is the closest UK entity to the PSC. However, the transfer of debt clauses allow for liability to be transferred to any entity in the supply chain above the PSC if HMRC cannot acquire the tax due within a reasonable timeframe. In the event of fraud, even the PSC and the individual contractor could become liable. In summary, the entire supply chain above the PSC is at risk, but primarily the Fee Payer.

This.

Although I have a hunch the Fee Payer will put an indemnity clause in the contract to the PSC. Whether that's enforceable or not is another matter.

[mgrover]

Whats the fee payer actually liable to pay if they get the determination wrong? Is it just the "unpaid" tax difference?

[eek]

This.

Although I have a hunch the Fee Payer will put an indemnity clause in the contract to the PSC. Whether that's enforceable or not is another matter.

It wouldn't be but you would need a lawyer to fight your case.

[jamesbrown]

Whats the fee payer actually liable to pay if they get the determination wrong? Is it just the "unpaid" tax difference?

The difference plus interest plus penalties. The bar for penalties is similar to the bar for liabilities w/r to the SDS, i.e., reasonable care.

[ladymuck]

It wouldn't be but you would need a lawyer to fight your case.

Yes, I did mean to add that.

[BritishLad88]

I always believed that it’s the entity pays you or the source of where your payment originates from is liable which I always took that to mean the end client.

But my accountant Qdos, the one and only famous Qdos told me that is the agency would be liable as ‘those are the ones paying you’ (I receive the money from the agency bank accounts). So the end client would be completely risk free post April.

[jamesbrown]

So the end client would be completely risk free post April.

No they wouldn’t. They have responsibilities and, potentially, liabilities. Why do you think many are banning PSCs altogether?