So an update on this...
I received my contract this morning from the agency, asking me to sign it. I sent back the following email with the Resourcer and new Manager copied (I have changed company and people names in here):
With time getting towards the IR35 deadline on April 5th 2020, there are a few things that both myself and the Client need to do to protect ourselves from any HMRC issues before I can sign this contract.
Firstly, I have sent the contract through to my IR35 insurance supplier (QDOS), to confirm that the contract is, in their eyes, IR35 compliant, and doesn’t invalidate the insurance I have with them. This should have a fairly quick turnaround and I hope to hear back by the end of the week.
Secondly, I need a determination from the Client to confirm that this role (Role name here), will never be, at any point, judged as Inside IR35, whether I am in the role or not. The reason for this is that I could be heavily penalised – even if I am no longer at the company when the determination happens. Derek – I don’t know how we get this determination done, or guaranteed, but if there is any chance that a payment for this role (with myself in it or not) goes beyond the 5th April, then there will be liability potentially from both sides (Income Tax from myself, Employers NI from the Client) if at any point the role is judged as Inside IR35.
Thirdly, this contract needs to be done as a purely new contract and not an extension, locked to the specific role (Role Name Here). An extension would mean that any determination on IR35 to inside could also be traced back through to my previous contracts at the Client, which would mean a huge amount of liability from my side.
I received the following reply from the Agency:
Thank you for emailing.
I do appreciate your concerns around IR35, and at this stage the Agency are working with the Client to consider their approach ahead of April next year. We anticipate communication will go out later this year to contractors.
Your extension would run up until January 2020, with the legislation taking effect in April 2020, therefore we would progress as normal at this point.
To which I replied:
This issue is around if that role, not the contract, will exist into 2020. If the role is still there then the determination needs to be made. Contracts are irrelevant to the way the determination works.
For example, if the role runs from now until June and is deemed in late March to be inside IR35, even if I left in January the whole role, since inception, would be implicated as Inside IR35, and HMRC can request details of all contractors that have served under that role and move them all within IR35, hence leaving me with a large tax bill, and the Client with an Employers NI bill.
I have since spoken to Derek, the internal resourcer, and explained what I need, which I think I can sum up as the below:
I need one of the following:
Role is determined as Inside or Outside IR35 before contract is signed
Or;
Role must be excluded from an IR35 Determination
And;
Last payment for role to the Agency must not pass 5th April 2020
And;
If similar role is still needed, a new role with a different title and deliverables needs to be produced so that it is not the same as the role that has lapsed.
Of course, I'm sure I'm going to be told I'm understanding this wrong, but does this make sense?
I received my contract this morning from the agency, asking me to sign it. I sent back the following email with the Resourcer and new Manager copied (I have changed company and people names in here):
With time getting towards the IR35 deadline on April 5th 2020, there are a few things that both myself and the Client need to do to protect ourselves from any HMRC issues before I can sign this contract.
Firstly, I have sent the contract through to my IR35 insurance supplier (QDOS), to confirm that the contract is, in their eyes, IR35 compliant, and doesn’t invalidate the insurance I have with them. This should have a fairly quick turnaround and I hope to hear back by the end of the week.
Secondly, I need a determination from the Client to confirm that this role (Role name here), will never be, at any point, judged as Inside IR35, whether I am in the role or not. The reason for this is that I could be heavily penalised – even if I am no longer at the company when the determination happens. Derek – I don’t know how we get this determination done, or guaranteed, but if there is any chance that a payment for this role (with myself in it or not) goes beyond the 5th April, then there will be liability potentially from both sides (Income Tax from myself, Employers NI from the Client) if at any point the role is judged as Inside IR35.
Thirdly, this contract needs to be done as a purely new contract and not an extension, locked to the specific role (Role Name Here). An extension would mean that any determination on IR35 to inside could also be traced back through to my previous contracts at the Client, which would mean a huge amount of liability from my side.
I received the following reply from the Agency:
Thank you for emailing.
I do appreciate your concerns around IR35, and at this stage the Agency are working with the Client to consider their approach ahead of April next year. We anticipate communication will go out later this year to contractors.
Your extension would run up until January 2020, with the legislation taking effect in April 2020, therefore we would progress as normal at this point.
To which I replied:
This issue is around if that role, not the contract, will exist into 2020. If the role is still there then the determination needs to be made. Contracts are irrelevant to the way the determination works.
For example, if the role runs from now until June and is deemed in late March to be inside IR35, even if I left in January the whole role, since inception, would be implicated as Inside IR35, and HMRC can request details of all contractors that have served under that role and move them all within IR35, hence leaving me with a large tax bill, and the Client with an Employers NI bill.
I have since spoken to Derek, the internal resourcer, and explained what I need, which I think I can sum up as the below:
I need one of the following:
Role is determined as Inside or Outside IR35 before contract is signed
Or;
Role must be excluded from an IR35 Determination
And;
Last payment for role to the Agency must not pass 5th April 2020
And;
If similar role is still needed, a new role with a different title and deliverables needs to be produced so that it is not the same as the role that has lapsed.
Of course, I'm sure I'm going to be told I'm understanding this wrong, but does this make sense?
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