Client Confirmation letter of previous status

[Tertius]

ClientCo are stopping engaging PSCs. They have offered a PAYE contract which I do not want to sign but can't find any alternative roles at the moment.
I understand the risks of continue with the same Agency (RS) post April.
Do you think it would help in any way if ClientCo issued a confirmation statement?

"We have always considered the role MyCo has performed to be outside of IR35 rules, our contracts have always supported that view and Client-Contractor working relationships have always been conducted in a conducive manner.
However, going forward ClientCo has decided to stop engaging PSCs. This decision in no way prejudices the previous working relationship with your PSC"

[northernladuk]

No.

This situation and all its nuances have been discussed endlessly.

[eek]

No.

This situation and all its nuances have been discussed endlessly.

The only thing you could do to reduce risk is suggest you swap agencies with someone from a different agency...

That may not have much impact but it would stop you appearing on the most obvious "who could we look at" reports

[jamesbrown]

Why would they at this point? There's nothing in it for them.

It's best to get a CoA when you have leverage, i.e., towards the start of a contract, shortly after the WP become clear. Also, the CoA needs to be detailed, not a meaningless blanket statement. It needs to have specifics about things like D&C, RoS and MoO.

[Tertius]

Why would they at this point? There's nothing in it for them.

It's best to get a CoA when you have leverage, i.e., towards the start of a contract, shortly after the WP become clear. Also, the CoA needs to be detailed, not a meaningless blanket statement. It needs to have specifics about things like D&C, RoS and MoO.

This is in reference to the current LtdCo contract and its working arrangements. In an effort to reduce look back risk, and have something to send back to them if I were to get a fishing letter in the future.

[Tertius]

The only thing you could do to reduce risk is suggest you swap agencies with someone from a different agency...

That may not have much impact but it would stop you appearing on the most obvious "who could we look at" reports

This is something I am trying, although not unsurprisingly RS are throwing road blocks. Although he did suggest that the non-compete clause is not relevant here.

But in his opinion there is little risk of HMRC coming knocking - well good for him, at least i can sleep better now knowing he will cover my exposure....

[eek]

This is in reference to the current LtdCo contract and its working arrangements. In an effort to reduce look back risk, and have something to send back to them if I were to get a fishing letter in the future.

Why would they do that and who within the company do you think would be brave enough to write such a thing - the blanket decision shows that from on high they don't want to commit to anything?

Just give it up and try to find something else. Otherwise keep money to one side and hope that HMRC pick other people to look at.

[jamesbrown]

This is in reference to the current LtdCo contract and its working arrangements. In an effort to reduce look back risk, and have something to send back to them if I were to get a fishing letter in the future.

Sure, that's what I responded to. Why would they bother? Hint: they wouldn't. It won't reduce their risk (it would actually increase their risk if they weren't binning PSCs altogether).

[GhostofTarbera]

ClientCo are stopping engaging PSCs. They have offered a PAYE contract which I do not want to sign but can't find any alternative roles at the moment.
I understand the risks of continue with the same Agency (RS) post April.
Do you think it would help in any way if ClientCo issued a confirmation statement?

"We have always considered the role MyCo has performed to be outside of IR35 rules, our contracts have always supported that view and Client-Contractor working relationships have always been conducted in a conducive manner.
However, going forward ClientCo has decided to stop engaging PSCs. This decision in no way prejudices the previous working relationship with your PSC"

You have had your current contract reviewed by A professional and it’s insured ?


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[WordIsBond]

Contrary to what some others say, I can see reasons for ClientCo to give OP something, and little risk to them in doing so.

Reasons to give him something: 1) They want to keep OP 2) It can help put a stake in the ground as far as claims before an employment tribunal.

Reasons there is no risk: 1) They have no tax liability in the prior relationship no matter what they say about IR35. 2) The type of statement OP wants would not give them any liability. 3) If HMRC doesn't believe the statement, the comeback is on OP, not ClientCo.

The problem with the specific statement OP suggested is they don't want to touch IR35 with a ten foot pole. That's why they are banning PSCs rather than issuing determinations.

So, don't ask them to say that. Ask them to say this:
"Up until April 2020, ClientCo had an engagement with ContractorCo. ClientCo and ContractorCo always considered this to be an engagement of self-employment.

From April 2020, ClientCo has decided to stop engaging PSCs. This decision does not change the view that the prior engagement between ClientCo and ContractorCo was one of self-employment."

You're given them an absolute get-out on any employment claim you might make for the historical engagement. In return, you are getting a statement that breaks the chain between before and after. It might not stop HMRC but it might make them think about going after a softer target, because it neuters any argument they might make that you and client, by your continued relationship, are affirming this should have been inside all along.

Close your company ASAP, if you can get it closed before an investigation starts that probably renders you safe.

The other thing a statement like this from ClientCo would accomplish is that, if you do get the company closed, it would likely make it impossible to pierce the corporate veil. If you demonstrate that both you and client thought it was self-employment, it would be difficult for HMRC to argue that you've been sufficiently negligent to make it a personal liability.