PSC IR35 Determination
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    Default PSC IR35 Determination

    I cant seem to find where in the legislation this is mentioned. Can anyone point me at a paragraph I can quote to my agency.

    I have been deemed inside IR35. When this decision was announced by my client it came as a shock to me and the people with whom I work on this project. The decision was made by HR people removed from the day to day running of the project.

    All is good however, as I increased the rate more than sufficiently to accommodate the excess tax payable. Given that there are expenses and other factors inside IR35 I probably break even(ish).

    However, I would like written proof of the determining factors for my inside IR35 decision. I have read somewhere that it is a legal requirement to provide this within 31 days of it being requested by me. I requested to my agency that they obtain this a few weeks ago. I would like to go back to them and quote legislation. Ultimately, I want to know if there is possibility of challenging the inside decision, but generally I think I should have this information in writing anyway.

    Anyone know whee its mentioned?

  2. #2

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    Qdos Contractor's Avatar
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    Finance Act 2017

    Under 61T(4):

    (4) If the information which subsection (1) requires the client to give to a person has been given (whether in the contract, as required by subsection (2) or (3) or otherwise), the client must, on a written request by the person, provide the person with a written response to any questions raised by the person about the client’s reasons for reaching the conclusion identified in the information.

    (5) A response required by subsection (4) must be provided before the end of 31 days beginning with the day the request for it is received by the client.
    Qdos Contractor - IR35 experts

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    So....what if its not?

    The legislation says that the client must provide the determination within 31 days of it being request.

    Great. But what if they don't? I don't suppose I get my extra tax back if they don't tell me why they are forcing me inside IR35?


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    If not then they become the 'fee payer', i.e. the agency's responsibilities shift to the client:

    (6)If—
    (a)the client fails to comply with the duty under subsection (1) within the time allowed by subsection (2) or (3),
    (b)the client fails to provide a response required by subsection (4) within the time allowed by subsection (5), or
    (c)the client complies with the duty under subsection (1) but fails to take reasonable care in coming to its
    conclusion as to whether the condition in section 61M(1)(d) is met in the case,

    section 61N(3) and (4) have effect in the case as if for any reference to the fee-payer there were substituted a reference to the client, but this is subject to section 61V.
    Qdos Contractor - IR35 experts

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    Quote Originally Posted by Qdos Contractor View Post
    If not then they become the 'fee payer', i.e. the agency's responsibilities shift to the client:

    (6)If—
    (a)the client fails to comply with the duty under subsection (1) within the time allowed by subsection (2) or (3),
    (b)the client fails to provide a response required by subsection (4) within the time allowed by subsection (5), or
    (c)the client complies with the duty under subsection (1) but fails to take reasonable care in coming to its
    conclusion as to whether the condition in section 61M(1)(d) is met in the case,

    section 61N(3) and (4) have effect in the case as if for any reference to the fee-payer there were substituted a reference to the client, but this is subject to section 61V.

    Which means what in English? Does it mean I can therefore go back to HMRC and get my tax back and THEY will chase the client for it? (I doubt it)

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    Quote Originally Posted by NetContractor View Post
    Which means what in English? Does it mean I can therefore go back to HMRC and get my tax back and THEY will chase the client for it? (I doubt it)
    It means that they become liable for deducting the tax and NI correctly. Which they already were, since you've been deemed inside.

    The "penalty" for not complying with the legislation to provide you with a reason for the justification that you are inside is that they are liable for tax, rather than the agency. So absolutely no effect on you, and no penalty for them (unless the agency get it wrong).
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