IR35 letters going out to GlaxoSmithKline contractors

[Barry Badrinath]

Any idea why specifically GSK contractors have been targeted just now?

[Lockhouse]

It occurred to me that with 1500 letters going out at once, perhaps 1500 targetted replies to maybe three or four different places including individual FOI requests and other requests for information from HMRC could certainly gum up the works somewhat. The equivalent of sending a housebrick via freepost but perfectly legal. Perhaps QDOS or some such could also write to the 1500 contractors and arrange. Passive and peaceful resistance.

[webberg]

Any idea why specifically GSK contractors have been targeted just now?

I think they're just first and will be followed by many others.

[webberg]

It occurred to me that with 1500 letters going out at once, perhaps 1500 targetted replies to maybe three or four different places including individual FOI requests and other requests for information from HMRC could certainly gum up the works somewhat. The equivalent of sending a housebrick via freepost but perfectly legal. Perhaps QDOS or some such could also write to the 1500 contractors and arrange. Passive and peaceful resistance.

To what end?

Pandora's Box has been opened and sooner or later the consequences must be dealt with.

Our view is very much that all those who are sure that they are outside IR35 lose nothing by going back quickly and saying so.

Those who have a decent case will require a little longer to get their act together in terms of evidence but again should be seeking to be off the investigation list asap.

Those who have a more threshold case ... we'll see.

There is little scope here for a group action as after all the whole point is that individuals have their own circumstances and arguing that everybody in a group has the same characteristics, is self defeating.

Either way, it does not help get to an answer if HMRC is using its resources to chase shadows.

[northernladuk]

Either way, it does not help get to an answer if HMRC is using its resources to chase shadows.

But what if its preparation for GSK giving them list of all the inside determinations pre April 2020.

[cojak]

and should this post be in the parent accounting/legal forum rather than the 'reform' subforum? It's not about reform and the more eyes on it the better.

Yes, I think I'll move it now.

[BlueSharp]

Just a thought. If HMRC have a list of all PSCs working outside now they'll have a perfect baseline for comparing any inside determinations GSK make approaching April 2020.

If GSK make any inside determination on a contractor that's got that letter they'll be effectively screwing the contractors. HMRC thinks it should be inside and GSK confirm it.

It'll be like mana from heaven for them won't it. How can they not come after the contractor with that information?

Strikes me that the real problem for GSK contractors is not now, it's when the determinations come out.

Thoughts?

100% agree. There is going to be a lot of hurt for those who have not managed their ir35 status over the years or continue not to do so. HMRC have a list via Off Pay roll reporting regulations of all contractors so i would expect to see this course of action increased.

[Hobosapien]

Just a thought. If HMRC have a list of all PSCs working outside now they'll have a perfect baseline for comparing any inside determinations GSK make approaching April 2020.

If GSK make any inside determination on a contractor that's got that letter they'll be effectively screwing the contractors. HMRC thinks it should be inside and GSK confirm it.

It'll be like mana from heaven for them won't it. How can they not come after the contractor with that information?

Strikes me that the real problem for GSK contractors is not now, it's when the determinations come out.

Thoughts?

That scenario applies to anyone using a PSC operating outside IR35 now and the private sector client determining inside come next April.

Even if you have the correct evidence in place now, if the client undermines it by way of blanket determination or using whatever approach HMRC recommend (CEST etc) and their own assessment of working practices differs from the contractor's then it puts the contractor in a difficult position in terms of likely coming up against a HMRC investigation if they continue under the client's determination for the same contract. Hopefully the investigation insurance is worth the paper it's written on at that point. The risk of continuing may be too great so better to plan on leaving the contract before any inside determination comes into force. Presumably the client will make the determination in good time so the contractor can decline the contract extension/alteration before it has a real impact.

The GSK contractors have a problem now but that's with having to respond to HMRC to avoid further/deeper investigation, if can show that they are incorrect in their assumption with evidence to back it up. The ongoing issue will be GSK's stance on this as far as what may happen when they start making the determinations and how that impacts contractors looking to stay in contract with GSK that are not already operating inside IR35.

So for now affected contractors have to assess how they handle and respond to HMRC and then assess how GSK are going to handle the determinations, and at what point the contract needs to be ended if it doesn't meet the contractor's expectations regarding IR35.

[Liberator]

That scenario applies to anyone using a PSC operating outside IR35 now and the private sector client determining inside come next April.

Even if you have the correct evidence in place now, if the client undermines it by way of blanket determination or using whatever approach HMRC recommend (CEST etc) and their own assessment of working practices differs from the contractor's then it puts the contractor in a difficult position in terms of likely coming up against a HMRC investigation if they continue under the client's determination for the same contract. Hopefully the investigation insurance is worth the paper it's written on at that point. The risk of continuing may be too great so better to plan on leaving the contract before any inside determination comes into force. Presumably the client will make the determination in good time so the contractor can decline the contract extension/alteration before it has a real impact.

The GSK contractors have a problem now but that's with having to respond to HMRC to avoid further/deeper investigation, if can show that they are incorrect in their assumption with evidence to back it up. The ongoing issue will be GSK's stance on this as far as what may happen when they start making the determinations and how that impacts contractors looking to stay in contract with GSK that are not already operating inside IR35.

So for now affected contractors have to assess how they handle and respond to HMRC and then assess how GSK are going to handle the determinations, and at what point the contract needs to be ended if it doesn't meet the contractor's expectations regarding IR35.

To combat this eventuality, could you set up a new company and renew with the same client through that new company inside IR35 if the determination by the end client was that you were all blanket inside?

[cojak]

To combat this eventuality, could you set up a new company and renew with the same client through that new company inside IR35 if the determination by the end client was that you were all blanket inside?

Eventually you need to close down the old company and you need HMRC's permission to do that.

Just a thought...