Blanket IR35 Determination / "HR Policy Against PSC's"

[BlasterBates]

Not sure you really understood my point.

It's quite simple.

Faff around with IR35 where you must issue an SDS in a timely way and based on reasonable care and you must bear some risk given the transfer of debt provisions in the legislation and the ability of the contractor to take remedial action (client-led status disagreement process etc.). You faff around with all of that, which is an administrative burden at best.

Or you simply implement a policy against PSC contractors.

It's blindingly obvious, isn't it?

Yes I've understood. But I doubt very much that is illegal for a client to request an agent that all contractors are within IR35 in the same way that it is not illegal for them to request they can't contract via their PSCs, because in either case the agency will probably tell the contractor the same thing, i.e. it is a blanket approach to IR35.

[jamesbrown]

Yes I've understood. But I doubt very much that is illegal for a client to request an agent that all contractors are within IR35 in the same way that it is not illegal for them to request they can't contract via their PSCs, because in either case the agency will probably tell the contractor the same thing, i.e. it is a blanket approach to IR35.

By why take the risk? It isn't necessary.

The process surrounding the SDS is now a legislated requirement and it demands reasonable care. Failure to take reasonable care (or to comply with any subsequent status disagreement process, such as a response within 45 days) means that the client is now the Fee Payer.

There is no "request an agent that all contractors are within IR35". That thing doesn't happen. What happens is that the Fee Payer abides by the SDS received. The client is on the hook for the SDS. The problem with your suggestion, other than the misunderstanding of process, is that an SDS that looks like "let's dump them all inside IR35" is going to fail the reasonable care test. If the client has a bunch of contractors all doing exactly the same thing then, of course, it is fine to issue a similar SDS for each one of those individual contractors, but that is a long way from "dump everyone inside IR35" - the client will need to demonstrate that the role is the same and justify why that role is inside.

Again, keep it simple - that is what clients will do.

[eek]

By why take the risk? It isn't necessary.

The process surrounding the SDS is now a legislated requirement and it demands reasonable care. Failure to take reasonable care (or to comply with any subsequent status disagreement process, such as a response within 45 days) means that the client is now the Fee Payer.

There is no "request an agent that all contractors are within IR35". That thing doesn't happen. What happens is that the Fee Payer abides by the SDS received. The client is on the hook for the SDS. The problem with your suggestion, other than the misunderstanding of process, is that an SDS that looks like "let's dump them all inside IR35" is going to fail the reasonable care test. If the client has a bunch of contractors all doing exactly the same thing then, of course, it is fine to issue a similar SDS for each one of those individual contractors, but that is a long way from "dump everyone inside IR35" - the client will need to demonstrate that the role is the same and justify why that role is inside.

Again, keep it simple - that is what clients will do.

It's worth reading that QDOS post I referred you to a couple of days back

https://www.contractoruk.com/forums/...ml#post2839659

I'll quote the most useful bit.

When it comes to the payment of those assessments - we found that allowing the client to require the fees paid by the contractor encouraged more (particularly those on the fence with PSC bans) to take a fair and compliant approach to their assessments as opposed to using the likes of CEST or banning contractors altogether. However this is entirely a commercial or policy decision on the part of the client.

End clients are both risk adverse and cheapstakes so they won't be doing blanket assessments, they simply won't be allowing contractors to work via their own limited companies.

[BlasterBates]

In any case

ESM10014 - Employment Status Manual - HMRC internal manual - GOV.UK

It is acceptable for a client to make a determination for a group of workers, providing those workers are engaged under the same contractual terms and conditions, and in practice work under the same terms and conditions.

and that is often the case, particularly with their preferred agency.

I can imagine HMRC would go through with a fine tooth comb, interviewing managers and picking holes in it if they were outside, but not if inside.

[eek]

In any case

ESM10014 - Employment Status Manual - HMRC internal manual - GOV.UK



and that is often the case, particularly with their preferred agency.

I can imagine HMRC would go through with a fine tooth comb, interviewing managers and picking holes in it if they were outside, but not if inside.

And remember that all HMRC coffee chats have been along the lines of that they are looking for cases where they can ask for 500 other workers to be included at the same time..

As I have pointed out for years we are usually just collateral damage in a battle to stop firms trying to outsource cheap labour.

[jamesbrown]

End clients are both risk adverse and cheapstakes so they won't be doing blanket assessments, they simply won't be allowing contractors to work via their own limited companies.

Agree.

Averse

[jamesbrown]

In any case

ESM10014 - Employment Status Manual - HMRC internal manual - GOV.UK



and that is often the case, particularly with their preferred agency.

I can imagine HMRC would go through with a fine tooth comb, interviewing managers and picking holes in it if they were outside, but not if inside.

"providing". Didn't I just say that?

Why bother with "providing"? No need. Keep it simple, ban PSCs.

[BlasterBates]

"providing". Didn't I just say that?

Why bother with "providing"? No need. Keep it simple, ban PSCs.

The due care and attention on an SDS where there is no outstanding tax to be paid is simply theoretical.

[jamesbrown]

The due care and attention on an SDS where there is no outstanding tax to be paid is simply theoretical.

It isn't theoretical, it's just reduced because HMRC is scarier than MrCretinContracting Ltd.

The production of the SDS is faff and risk.

The client-led status disagreement process is faff and risk.

It's all unnecessary faff and risk. Ban PSCs, no faff, no risk, achieves the same goal.

[BlasterBates]

It isn't theoretical, it's just reduced because HMRC is scarier than MrCretinContracting Ltd.

The production of the SDS is faff and risk.

The client-led status disagreement process is faff and risk.

It's all unnecessary faff and risk. Ban PSCs, no faff, no risk, achieves the same goal.

MrCretinContractingLtd's contract will clearly be inside IR35, case closed, risk = 0, but I agree of course if all contractors are inside IR35 then the SDS becomes superfluous, you just tell the agent and he puts all the contractors through umbrella contracts.

You have to see it from the point of view of the client. If HR doesn't make a blanket decision to include all contractors inside IR35 then the PM's might run riot and and recruit a whole load of contractors outside IR35 with sloppy SDS's, this is a much bigger risk.