IR35 - raising invoice

[siva1981]

Hi Eveyeone,

I am working as a contractor for an Government sector from Jan 2017 and i came inside IR35 based on the some evaluation and this rule applies to me from 6th April 2017.

And I have raised my invoice for the month of March and separate one from Apr 1-5th 2017 before when the IR35 rules applies to me but i have submitted the approved invoice on 5th April around late evening 8pm and then the next day my agent has mentioned i was late for around 3 hours on the day i have raised.

So now they are saying that i have to go via Umbrella company from Mar 2017 instead of April 6th only because i was late for couple of hours on the date which was deadline they were saying but that never been communicated to me what was the deadline to raise the invoice before .

Can someone please advise how can i proceed on this.

Thanks,

[doconline]

Hi Eveyeone,

I am working as a contractor for an Government sector from Jan 2017 and i came inside IR35 based on the some evaluation and this rule applies to me from 6th April 2017.

And I have raised my invoice for the month of March and separate one from Apr 1-5th 2017 before when the IR35 rules applies to me but i have submitted the approved invoice on 5th April around late evening 8pm and then the next day my agent has mentioned i was late for around 3 hours on the day i have raised.

So now they are saying that i have to go via Umbrella company from Mar 2017 instead of April 6th only because i was late for couple of hours on the date which was deadline they were saying but that never been communicated to me what was the deadline to raise the invoice before .

Can someone please advise how can i proceed on this.

Thanks,

Not 100% sure on this one, but I think it is to do with when the invoices would be paid in relation to the tax year. They may have been planning on processing all invoices received by xx:xxPM on 5th April and getting payments out that day (last day of tax year). As you missed the cut off (whether this cutoff point was relayed to you?) they have to process the payments in the new financial year, and they are running it as a payment now as being based inside IR35.

[TheFaQQer]

You can only invoice via the mechanism agreed in your contract. So if the contract is between your company and the agency (hint - it is) then the agency needs to deal with that as per the contract.

Unfortunately for them, that means that they are responsible for the calculation of NI and tax for any payments made after April 6th (if you are inside IR35). To move you to an umbrella (or any other payment mechanism) would need the termination of the existing contract and a new one to be in place. Whatever happens going forwards, the agency needs to deal with the payment due to your company though.

[barrydidit]

You can only invoice via the mechanism agreed in your contract. So if the contract is between your company and the agency (hint - it is) then the agency needs to deal with that as per the contract.

Unfortunately for them, that means that they are responsible for the calculation of NI and tax for any payments made after April 6th (if you are inside IR35). To move you to an umbrella (or any other payment mechanism) would need the termination of the existing contract and a new one to be in place. Whatever happens going forwards, the agency needs to deal with the payment due to your company though.

OP Note - when the payment is made, not when the work is done. If you'd invoiced before 5pm, it sounds like they would have paid to the non-IR35 terms. It sounds like you'll have to send everything to the umbrella from the start of March.

[MrMarkyMark]

OP Note - when the payment is made, not when the work is done. If you'd invoiced before 5pm, it sounds like they would have paid to the non-IR35 terms. It sounds like you'll have to send everything to the umbrella from the start of March.

+1.

[northernladuk]

+1.

I've a feeling will be explaining this a number of times in the coming weeks.

[TheFaQQer]

I've a feeling will be explaining this a number of times in the coming weeks.

I suspect that the agencies are the ones that need it explaining to - you cannot just turn round in April and say "the work you did against the contract that was in place in March we are now going to pay someone completely different".

A valid invoice has been raised by the OP, in line with the contract in place (I presume). The agency cannot arbitrarily decide now "it's too hard for us to comply with the law, so you need to change to an umbrella for this past work" - they can ask nicely, they can offer an inducement, but at the end of the day the contract is valid, the invoice is valid, and they have to comply with the law about deducting the tax and NI.

I'd be pushing back and charging interest for late payment if they cannot pay on time.

[moggy]

I suspect that the agencies are the ones that need it explaining to - you cannot just turn round in April and say "the work you did against the contract that was in place in March we are now going to pay someone completely different".

A valid invoice has been raised by the OP, in line with the contract in place (I presume). The agency cannot arbitrarily decide now "it's too hard for us to comply with the law, so you need to change to an umbrella for this past work" - they can ask nicely, they can offer an inducement, but at the end of the day the contract is valid, the invoice is valid, and they have to comply with the law about deducting the tax and NI.

I'd be pushing back and charging interest for late payment if they cannot pay on time.

+1

[Lance]

It's probably too late now but the onus was on the agency to sort this out and pay the last 'outside ir35' invoice before the 5th April. If the March one is delayed as well then I've no idea what that means. Strictly speaking it would now fall inside even though the delay might not be your fault. This isn't going to be the only one so check with IPSE.

[TheCyclingProgrammer]

Regardless of whatever tax obligations the agency must now comply with, I agree with TF that they have a contractual obligation to pay your outstanding invoices, even if they now have to account for the payments under the new rules.