"IR35 could well be dead in a few months" ?

[TheCyclingProgrammer]

Sub contracting a piece of work does not equate to supplying a worker by any definition I'm aware of. I supply services, not workers. Do HMRC really expect every service company in the land, big or small, to start reporting every time they engage a sub-contractor? As if that's going to happen.

Lisa - perhaps you could follow up for further clarification that by sub-contracting, you do not mean supplying an additional worker but simply sub-contracting a specific piece of work?

I'm happy to contact them myself - who do I contact?

[LisaContractorUmbrella]

Sub contracting a piece of work does not equate to supplying a worker by any definition I'm aware of. I supply services, not workers. Do HMRC really expect every service company in the land, big or small, to start reporting every time they engage a sub-contractor? As if that's going to happen.

Lisa - perhaps you could follow up for further clarification that by sub-contracting, you do not mean supplying an additional worker but simply sub-contracting a specific piece of work?

I'm happy to contact them myself - who do I contact?

Happy to ask the question - leave it with me

[Unix]

IR35 is dead, it's kept around as a deterrent to newbie contractors who don't know any better. Your more likely to win the lottery than get IR35 investigated. Anyone who says otherwise, is either HMRC, selling insurance in some way.

[jamesbrown]

Sub contracting a piece of work does not equate to supplying a worker by any definition I'm aware of. I supply services, not workers. Do HMRC really expect every service company in the land, big or small, to start reporting every time they engage a sub-contractor? As if that's going to happen.

Lisa - perhaps you could follow up for further clarification that by sub-contracting, you do not mean supplying an additional worker but simply sub-contracting a specific piece of work?

I'm happy to contact them myself - who do I contact?

That was my interpretation, i.e. subcontracting in the context of supplying a worker (i.e. a "Contract to supply workers"). I think it absolutely has to be this and not subcontracting for goods or services more generally, but let's see what Lisa finds out...

[TheCyclingProgrammer]

That was my interpretation, i.e. subcontracting in the context of supplying a worker (i.e. a "Contract to supply workers"). I think it absolutely has to be this and not subcontracting for goods or services more generally, but let's see what Lisa finds out...

I hope so too. The implications otherwise are quite mind boggling and I forsee a LOT of non-compliance.

[jamesbrown]

I hope so too. The implications otherwise are quite mind boggling and I forsee a LOT of non-compliance.

Absolutely. It's bad enough as it is, but that would be totally unworkable IMHO.

[TheCyclingProgrammer]

Absolutely. It's bad enough as it is, but that would be totally unworkable IMHO.

Well all the signs so far are that its not looking great.

IPSE's view:
https://www.ipse.co.uk/news/2015/cha...ough-says-ipse

Another ContractorCalculator article:
Employment intermediaries reporting catches limited company contractors, says HMRC

HMRC do not appear to be making any kind of distinction between using a sub-contractor/freelancer to deliver a specific part of a project you are working on for an end client, and "supplying" that sub-contractor/freelancer to the end client.

In short, if this is the case, then literally *any* business (and not just "PSCs") who uses freelancers or contractors, whether self-employed or limited companies, to assist with any deliverables on an end client's project, will have to report this to HMRC. That means any time I have a contract with any kind of design agency or consultancy to work on a project for one of their end clients, they will need to report my details to HMRC. Likewise, if I ever use a freelancer for one of my own clients (i.e. my client is *the* end client) I need to report them to HMRC.

Utter utter madness.

[jamesbrown]

Well all the signs so far are that its not looking great.

IPSE's view:
https://www.ipse.co.uk/news/2015/cha...ough-says-ipse

Another ContractorCalculator article:
Employment intermediaries reporting catches limited company contractors, says HMRC

HMRC do not appear to be making any kind of distinction between using a sub-contractor/freelancer to deliver a specific part of a project you are working on for an end client, and "supplying" that sub-contractor/freelancer to the end client.

In short, if this is the case, then literally *any* business (and not just "PSCs") who uses freelancers or contractors, whether self-employed or limited companies, to assist with any deliverables on an end client's project, will have to report this to HMRC. That means any time I have a contract with any kind of design agency or consultancy to work on a project for one of their end clients, they will need to report my details to HMRC. Likewise, if I ever use a freelancer for one of my own clients (i.e. my client is *the* end client) I need to report them to HMRC.

Utter utter madness.

To summarise, it would definitely apply if you subbed a worker to a client and the subbed worker was subcontracted from another company (YourCo would meet the definition of Intermediary). It definitely would not apply if you were purchasing goods or services directly for YourCo (e.g. for YourCo website), because there is no Intermediary. The question is: would it apply when subcontracting certain goods or services (in the form of deliverables) when those deliverables are for a client, but there is no contract to supply worker(s) to the client, only deliverables. If it does, there will be massive non-compliance. However, I take your point, and it might do for "simplicity". For example, can we really expect HMRC to distinguish between certain types of B2B (sub)contracts(?), such as fixed priced subcontracts for goods/services (at one end of the spectrum) vs. subcontracts to supply positions at a client. Worrying...

[TheCyclingProgrammer]

To summarise, it would definitely apply if you subbed a worker to a client and the subbed worker was subcontracted from another company (YourCo would meet the definition of Intermediary).

Agreed. If the sub was not your own employee, then whether they are a self employed freelancer or another Ltd company contractor, you'd have to report it as you'd be acting as an intermediary. Presumably this is still the case if sub is an employee of a bigger company, not just a "PSC"? I think it is (which makes it even more absurd).

It definitely would not apply if you were purchasing goods or services directly for YourCo (e.g. for YourCo website), because there is no Intermediary.

Agreed, no doubts there.

The question is: would it apply when subcontracting certain goods or services (in the form of deliverables) when those deliverables are for a client, but there is no contract to supply worker(s) to the client, only deliverables.

Exactly. Common sense says "surely not". HMRC seem to be saying "yes it does". The scope is huge. It should be easy to draw a line between "supplying a worker" and simply using another business as to help deliver an end product. HMRC haven't done this.

I await news of if and how IPSE intend to challenge this.

[TheCyclingProgrammer]

Another interesting question is how will businesses deal with non-compliance and data collection in general?

Will we all be forced to hand over our NI/UTR details when we sign contracts with clients when going direct and when that client has an end client and is therefore (presumably) caught by the reporting rules? Probably.

Will we need to ensure any contracts between our business and any sub-contractors will have to stipulate that we require this information from the sub-contractor/freelance prior to any engagement?

What happens when people refuse to hand over the details, stating (quite rightly IMO) that its none of their clients business? What if my current client discovers the rules apply to them and they need to report my details to HMRC come April and I refuse to give them those details - they could threaten to terminate my contract but a) that still doesn't help them with their reporting requirements and b) my contract could be finishing shortly anyway.

So many issues.