Contract spanning gap 2020 / 2021  and IR35 Contract spanning gap 2020 / 2021 and IR35
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  1. #1

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    Default Contract spanning gap 2020 / 2021 and IR35

    Hi -
    I recently started a contract, outside of IR35 - but it is likely that the client (UK based) may want an extension which will be from late March 2021 for another 6 months. However - with the new IR35 determination rules, is it possible that the contract may be deemed as inside IR35 after April 5 2021 ? - or will it automatically remain outside as it is not a new contract ?

    If an extension could potentially place it inside IR35 then it makes more sense for me to refuse such an extension, and take a contract with an overseas client instead since I hear that the new rules cannot be applied to overseas clients... ( I'm in a discipline where I have this option and there seems more work than people to do it right now.)

    Cheers!!

  2. #2

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    eek's Avatar
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    Quote Originally Posted by MeIsMark View Post
    Hi -
    I recently started a contract, outside of IR35 - but it is likely that the client (UK based) may want an extension which will be from late March 2021 for another 6 months. However - with the new IR35 determination rules, is it possible that the contract may be deemed as inside IR35 after April 5 2021 ? - or will it automatically remain outside as it is not a new contract ?

    If an extension could potentially place it inside IR35 then it makes more sense for me to refuse such an extension, and take a contract with an overseas client instead since I hear that the new rules cannot be applied to overseas clients... ( I'm in a discipline where I have this option and there seems more work than people to do it right now.)

    Cheers!!
    Yes - come April the determination has to be made by the end client not you and that means the contract might be deemed inside.

    I would take the overseas contract
    merely at clientco for the entertainment

  3. #3

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    Quote Originally Posted by MeIsMark View Post
    Hi -
    I recently started a contract, outside of IR35 -
    Are you 100% certain it is? Do you know enough about IR35 to make your own call? did you get the contract professionally checked? Or did you just take the agents word for it?

    [quote]is it possible that the contract may be deemed as inside IR35 after April 5 2021 ? - or will it automatically remain outside as it is not a new contract ?[quote]
    How should we know? Depend on the contract doesn't it. And as you are the one with the contract surely you are the only one that can answer that. Yes it can, but will it? That's up to you to investigate. What did the client do last time the change nearly hit. Kudos to you thinking about the change but you need to do a lot more of your own research looking at that question. You are going to have to think on your feet as the time approaches and negotiations start and options need to be thought about.
    If an extension could potentially place it inside IR35 then it makes more sense for me to refuse such an extension, and take a contract with an overseas client instead since I hear that the new rules cannot be applied to overseas clients... ( I'm in a discipline where I have this option and there seems more work than people to do it right now.)
    Cheers!!
    Correct but good luck finding an overseas contract. There aren't many around and the entire market will be doing exactly the same. You've got a hell of a lot of very seasoned and experienced contractors out there doing the same as you. We said this last time at about this time but the smart cookies have already snapped up these gigs way ahead of time.
    This option is a bit pie in the sky and is very unlikely to be an option so you need to brush up on your IR35 knowledge and be better prepared for the inevitable. It nearly hit once so we've a ton of first hand experience here on the forum to look through.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  4. #4

    Should post faster


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    Quote Originally Posted by MeIsMark View Post
    Hi -
    I recently started a contract, outside of IR35 - but it is likely that the client (UK based) may want an extension which will be from late March 2021 for another 6 months. However - with the new IR35 determination rules, is it possible that the contract may be deemed as inside IR35 after April 5 2021 ? - or will it automatically remain outside as it is not a new contract ?
    Yes, perfectly possible the extension will be deemed inside. There's also the possibility the extension could be deemed outside if the client was forward thinking when the initial contract was drawn up.

    Quote Originally Posted by MeIsMark View Post
    If an extension could potentially place it inside IR35 then it makes more sense for me to refuse such an extension, and take a contract with an overseas client instead since I hear that the new rules cannot be applied to overseas clients... ( I'm in a discipline where I have this option and there seems more work than people to do it right now.)

    Cheers!!
    No, it really doesnt make more sense. You think getting an overseas contract is going to be easier to secure and also navigate potential Dual Tax Arrangements?

    Seriously, Id sit tight and see if you're offered an extension and if so, whether it's inside IR35. Anything else is guess work.

    Alternatively, start looking for an outside IR35 contract before March but good luck with that as I dont think there will be many.

    If you think merely securing an overseas contract is more beneficial and less stressful than being IR35 caught, I think you'll be in for a bit of a shock. Not only will you have to deal with HMRC, you'll also have to deal with the tax authority for the overseas client.

    some people on here really should know better than advising to look for and take the overseas work.

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