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

[jamesbrown]

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.

Certainly, there's the potential for carnage and non-compliance on a massive scale. It's clear that agencies will have to comply and will face the brunt of this, but it has much wider implications unless a "contract to supply workers" has very limited scope and is very well-defined (i.e. YourCo subcontracting a position at the client). Unfortunately, experience suggests that HMRC do not enjoy a well-defined scope (or clear guidance) because it eliminates possibilities...

[TheCyclingProgrammer]

I'd love to get the view of some of the accountants on this forum because as my accountant has just indicated to me - this could affect him and other accountants too! If one of his clients approaches him with a particularly complicated query that requires specialist advice, and he sub-contracts to a tax specialist to assist him with the query, does he now have to report that? The possibilities are endless...

[LisaContractorUmbrella]

This from HMRC in reply to my question of yesterday:

I realise this is going to be disappointing but your correspondent is going to need to complete a return if as set out here they use a subcontractor to provide to the client the services their company has contracted to provide:

• The law requires the company - the relevant intermediary, to complete the return if "more than one individual provides services to a client under or in consequence of a contract between the employment intermediary and one or more clients".

• If only one person in the employ of a personal service company (for example the contractor who owns it) provides services to a client that is not caught. If two people in the employ of a personal service company provides service to a client (for example the contractor and a subcontractor) then the PSC has an obligation to tell us.

• So yes, if you but in someone else to provide the services to the client (ie carry out the work the client contracted to have done) then you are going to have to compelete a return telling us about the people the company pays to provide services.

I trust this helps.

[jamesbrown]

This from HMRC in reply to my question of yesterday:

I realise this is going to be disappointing but your correspondent is going to need to complete a return if as set out here they use a subcontractor to provide to the client the services their company has contracted to provide:

• The law requires the company - the relevant intermediary, to complete the return if "more than one individual provides services to a client under or in consequence of a contract between the employment intermediary and one or more clients".

• If only one person in the employ of a personal service company (for example the contractor who owns it) provides services to a client that is not caught. If two people in the employ of a personal service company provides service to a client (for example the contractor and a subcontractor) then the PSC has an obligation to tell us.

• So yes, if you but in someone else to provide the services to the client (ie carry out the work the client contracted to have done) then you are going to have to compelete a return telling us about the people the company pays to provide services.

I trust this helps.

Thanks, Lisa.

Can you keep asking them until you get the correct answer?

They're on another planet if they think this is going to be workable.

[TheCyclingProgrammer]

I think HMRC have truly lost the plot on this one.

I also take it the same rules apply to any company so I don't understand why the HMRC response keeps going on about personal service companies.

What exactly are HMRC going to do to inform every single UK business about these new rules? They must realise it's going to affect lots of small businesses and not just agencies right?

[LisaContractorUmbrella]

Thanks, Lisa.

Can you keep asking them until you get the correct answer?

They're on another planet if they think this is going to be workable.

I can certainly ask In all seriousness, if you want to put some points together about unworkability or whatever I'll be happy to send something over to them

[jamesbrown]

I think HMRC have truly lost the plot on this one.

This is one for the local MP, and for IPSE at a higher level. All that crap about cutting red tape for small businesses (actually, any business) is laughable in this context. I can't believe they think a subcontractor is going to collect and return this info. on a contract to supply goods/services. They have truly jumped the shark on this one.

[jamesbrown]

I can certainly ask In all seriousness, if you want to put some points together about unworkability or whatever I'll be happy to send something over to them

Thanks. I think we need to tackle this from all angles. I see there's a thread over on the IPSE forum, and they will need to pursue this vigorously. This is one for the local MP too.

It's one thing to scope this as supplying positions at a client, i.e. the core business of an agency, but it's another thing entirely to report on all work completed by subcontractors; essentially, this will scope most small businesses (and, certainly, all medium/large businesses) as employment intermediaries at one point or another.

[TheCyclingProgrammer]

Just reading the legislation amendment and the very first bullet point where it defines "specified employment intermediary" is that the intermediary "is an agency" but I can't see where this is defined. Any pointers?

Taking the law and guidance at face value, what's to stop a company from saying "I'm not an agency" and they can stick their reports? I want to see the legislation that would make my business, or any business that uses sub contractors on end client projects, an "agency".

I'm starting to believe this is yet another case of HMRC wilfully misinterpreting legislation. The law doesn't just say "employment intermediaries" it says "specified employment intermediaries" and part of that specification is that the intermediary is an agency. Which would make sense.

So whilst I can accept sub-contracting might make you an "intermediary" I don't accept that it makes you an agency and therefore a "specified intermediary".

Or is it me that's misreading this?

[jamesbrown]

Just reading the legislation amendment and the very first bullet point where it defines "specified employment intermediary" is that the intermediary "is an agency" but I can't see where this is defined. Any pointers?

Taking the law and guidance at face value, what's to stop a company from saying "I'm not an agency" and they can stick their reports? I want to see the legislation that would make my business, or any business that uses sub contractors on end client projects, an "agency".

I'm starting to believe this is yet another case of HMRC wilfully misinterpreting legislation. The law doesn't just say "employment intermediaries" it says "specified employment intermediaries" and part of that specification is that the intermediary is an agency. Which would make sense.

So whilst I can accept sub-contracting might make you an "intermediary" I don't accept that it makes you an agency and therefore a "specified intermediary".

Or is it me that's misreading this?

Yes, I see that at 84E(a). I don't know. However, the response from HMRC at 2.24 states:

"If the PSC subcontracts to another PSC or where more than one worker of the PSC provides services to an end client they will be caught by the legislation as a specified employment intermediary and would need to file a return."