Final advice for PSCs who've been blanket assessed

Contractors who have been blanket assessed as inside IR35 but who believe they are outside it should employ a two-fold strategy before Thursday’s off-payroll rules bite, an adviser says.

Firstly, run the IR35 digital tool with a client representative and get them to initial the ‘outside’ result as being consistent with their understanding of your work, recommends Intouch Accounting.

Second, ask your agency to submit a formal request up the supply chain that your status be confirmed before this Thursday (April 6th), taking into account the result of the enclosed test, the accounting firm says.

“Personally, I would go straight to the client representative,” said Intouch’s senior director Duncan Strike, elaborating on the second part of the strategy.

“But also talk to your agency about whether they (the agency) are actually, and legally, regarded as the 'fee payer' under the law, for if they are not, they have no obligation nor right to deduct tax.”

Strike recognises that his strategy hinges on HM Revenue & Customs sticking to what it has generally said -- that it will abide by the outcome of the status tool (provided it is completed honestly, and accurately).

He reflected: “Any public sector body that fails to accept the status tool result, without justification, is clearly flying in the face of HMRC’s own undertakings and therefore surely failing in its obligations.”

But the accountant acknowledged that some public PSCs might not be able to go beyond part one of the strategy, because the client representative might simply refuse to sign their name under the tool’s ‘outside’ result.

 “If they refuse, record that fact ([plus the] time, date and the [name of the] representative),” Strike advised, addressing contractors. “They’ll get nervous straight away.”

The advice comes after the words ‘reasonable  care’ were added into Thursday’s off-payroll rules, with the effect being that the public sector client must take reasonable care in deciding their PSCs’ status.

Intouch is among those who believe the addition obliges clients to reasonable assess the individual working practices of their PSCs, rather than run “a wholesale across the board” status assessment of all such workers. 

“[We] constantly read on the forums that contractors are being assessed contrary to their belief,” the firm said. “Conversations with agencies…confirm the public sector is failing to comply with its obligations.

“Surely, now is the time for contractors and the supply chain to stop sitting quietly bemoaning the reforms and start to fight back and, as government would do, expect the public sector to conform with the law.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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