SDS - Forced to pay, transfer of liability? SDS - Forced to pay, transfer of liability?
Posts 1 to 8 of 8
  1. #1

    Nervous Newbie


    Join Date
    Feb 2020
    Posts
    1

    Default SDS - Forced to pay, transfer of liability?

    Newbie to forum but decade in contracting...

    I am currently contracted to a UK FTSE 100 that has not decided to go down the blanket determination route. I agreed a contract extension to end-March to ensure I could make my next move decision with as many facts as possible.

    All of us PSC contractors currently on the books (regardless of end-date) have been assessed on the basis of 'job role' rather than working practices. Those that have been deemed preliminary out of scope have been 'asked' to pay and complete an IR35 assessment through QDOS. Not completing the QDOS assessment will force a termination on 21st March.

    Many of us are unhappy that we are being forced to pay for a service that should be the responsibility of the end-client and that we won't necessarily see the 'raw' SDS determination - the SDS will go to the client and they will decide what happens next (we don't know the process but can't see how your client 'manager' who may be in another country could have the expertise to question the QDOS determination).

    A clause was put in the QDOS assessment stating that if any 'omissions/errors' occur in the completion of the questionnaire than any IR35 liability will switch from end client to PSC.

    It seems to me that the end-client, supported by their 'leading' recruitment partner, have spotted an opportunity to absolve themselves of responsibility if HMRC come knocking in that if HMRC argue that an out of scope should have been in scope, the client/agency will blame it on the supplied questions and therefore transfer financial liability. As with the whole IR35/CEST situation we have had to answer questions on how we would operate e.g. provide substitutes without seeing the agency:client contract on what in reality would be expected if enacted.

    Long first post I know, but others may be interested in thoughts about transfer of liability.

  2. #2

    Double Godlike!

    malvolio's Avatar
    Join Date
    Jul 2005
    Location
    Walking in the garden, dreaming of Olivia...
    Posts
    12,066

    Default

    Blanket Determinations are illegal, they have to be against an individual and a role.

    The determination is the client's responsibility, not yours. On that basis, they should pick up the bill, which is peanuts anyway.

    Can you complete the QDOS determination, which is detailed, if you don't have the full understanding and agreement of the client as to the terms and conditions of your particular engagement. I suspect not.

    Therefore, how can you hope to complete the determination without the penalty being deflected back to you since you will have provided wrong (or at best optimistic) answers.

    I would be tempted to call their bluff and have everyone simply walk away in March...
    Blog? What blog...?

  3. #3

    Super poster


    Join Date
    Apr 2015
    Posts
    2,940

    Default

    If the client is intending to rely on that with HMRC, they have a nice surprise coming.

    The liability to HMRC rests with the client / fee-payer, and no contractual provision can override that. The best that contractual provisions can do is to give the client recourse to try to reclaim from YourCo if there's a problem, but if you've been dishonest in your answers that's fair enough on their part.

    HMRC will still chase them. If they lose a case because you provided false information, this gives them the right to chase you. HMRC will not care about this, it's not their problem.

  4. #4

    Should post faster


    Join Date
    Sep 2011
    Posts
    122

    Default

    Quote Originally Posted by yacl View Post
    A clause was put in the QDOS assessment stating that if any 'omissions/errors' occur in the completion of the questionnaire than any IR35 liability will switch from end client to PSC.
    I'll be quite surprised if a company as clued up w.r.t. tax law as QDOS would include such a clause, since it is entirely unenforceable as statutory law will always override contract law and the proposed new legislation enacts quite a different chain of responsibility.

  5. #5

    bored now

    eek's Avatar
    Join Date
    Jun 2010
    Location
    😂
    Posts
    26,335

    Default

    Quote Originally Posted by Snooky View Post
    I'll be quite surprised if a company as clued up w.r.t. tax law as QDOS would include such a clause, since it is entirely unenforceable as statutory law will always override contract law and the proposed new legislation enacts quite a different chain of responsibility.
    The clause to me looks perfectly valid.

    If the information given by the contractor / PSC is inaccurate due to "omissions/errors" and resulted in an outside status being recorded when inside would have been accurate then yes it's the PSC who is liable (and that's what the law says as well if the result is due to fraud the fraudulent party is held liable).
    merely at clientco for the entertainment

  6. #6

    Nervous Newbie


    Join Date
    Feb 2020
    Posts
    1

    Default

    I'm in the exact same situation (newbie to forum, long time contracting, QDOS assessment 'required' at my cost or termination etc) and equally annoyed - at the principle of it rather than the fact. I'd be asking any prospective client to fill in a working practises questionairre if I start a new role, and it seems entirely reasonable now for clients to do that given they are liable; it does NOT seem reasonable for them to charge me for it.

    The principle of the provider paying in order to spend my time doing something for a client is just plain wrong to me. At the very least it is an expense that should be invoiced back to the client. Perhaps you (and I) should charge them for the determination we made at start of our current contract with them?

    (I stress I am not connected to or - to my knowledge - at the same client as yacl; just the exact same circumstance.)

    I haven't seen the QDOS wording yet, but I would hope there is some term to make ''omissions/errors' a legally reasonable effort - in other words that if the facts are given in good faith given all due diligence then the contractor cannot be held liable. If not, then that would surely be challengeable in court (not that I'd want the hassle of that!).

    My end date would be 6th April so later than yours - interested to hear how this plays out with your client...

  7. #7

    Should post faster


    Join Date
    Dec 2018
    Posts
    123

    Default

    There's a few issues here:

    1. Contractor paying for assessment - we've taken the approach that we pay for assessment, contractor pays for insurance if outside. That way if it's inside the contractor's not paying out to be worse off, plus insurance covers contractor for a few other bits and pieces. It's a completely commercial decision - client can ask you to stand on one leg for duration of the contract, you accept what's offered or don't.

    2. Transparency - the client may well decide what to share but if they issue you an SDS it has to include reasons so would be a bit short sighted to hide this from you. Again though, a commercial decision.

    3. Passing liability - if the contractor completes the assessment and says (for example) I have financial risk and the SD is outside on that factor then it is reasonable for the client to seek to recover their liability in the event that it is incurred because the contractor misrepresented the facts and in fact there wasn't (for example) financial risk. However, the liability would still be the client's (in all probability the agents) in law and they'd seek to recover - how successful that would be is doubtful, it is probably more of an incentive to be factual than a real risk mitigation.

  8. #8

    My post count is Majestic

    northernladuk's Avatar
    Join Date
    Mar 2009
    Posts
    44,595

    Default

    . It's a completely commercial decision - client can ask you to stand on one leg for duration of the contract, you accept what's offered or don't.
    But that would be direction and control.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •