IR35: Planning for April 2021 – should I stay or should I go?

[northernladuk]

I've mentioned this on another thread, but for those going outside to inside at the same client, the sheer number of contractors who will be doing this will mean there's no way HMRC could afford to investigate them all, or even more than a handful surely?

They're incredibly under-resourced as it is and the people who will trip this flag in April will number the thousands at some of the big Banks alone.

Well the business case is pretty solid. Couple of extra bods for 100s of K return, particularly when the investigation is just a tick box affair.

Maybe they could draft some contractors in

If they were smart they could start a scheme where anyone can gather the evidence for them and that person gets paid a flat fee or percentage of claim. It would give the guys on the bench something to do at least.

[cojak]

I've mentioned this on another thread, but for those going outside to inside at the same client, the sheer number of contractors who will be doing this will mean there's no way HMRC could afford to investigate them all, or even more than a handful surely?

They're incredibly under-resourced as it is and the people who will trip this flag in April will number the thousands at some of the big Banks alone.

No, they probably don't have the resources to investigate this year.

But once they clear the backlog, well...

[Peach2014]

Thanks for all the info! Is it worth doing a six-month Umbrella? I have been reading and calculating but would highly value an advice, thank you!

Current: Ltd company with contract ending February 2020
Two options after February: (1) Umbrella for six months then ECM or (2) straight to ECM (12-months)
– different role (similar skills) same end-client, same recruitment agency

ECM is offering 34 days holidays. Umbrella payment illustrations have 28 days holiday.

To figure out my take home pay:
1. option 1 - contacted Umbrella Companies for payment Illustrations
2. option 2 - used Money Savings Expert (MSE) tax calculator and GOV.UK tax calculator – results are quite similar.

The Umbrella take home pay is just slightly higher than ECM but my calculation could be wrong.

Risk to option 1 / Umbrella – uncertain after initial period, client could advertise the role if wanting a permie

Questions:
1. Has anybody used those two calculators? are they reliable?
2. Will a different role be sufficient enough not to trigger a red flag?
3. Is there a benefit to doing a short term Umbrella? (repeated here)

[eek]

No, they probably don't have the resources to investigate this year.

But once they clear the backlog, well...

They don't need to clear the backlog, they just need to kick the cases off some point after April.

And they will do that by asking for information ala the GSK letters, bin the ones where the responses came from tax advisors and then starting issuing estimated demands with help from the nudge department and HMRC's friendlier debt collection agencies.

Yes I'm cynical and probably more risk adverse than most but anyone who has read the Scheme enquiries forum can see the play book that's going to be used.

[eek]

Thanks for all the info! Is it worth doing a six-month Umbrella? I have been reading and calculating but would highly value an advice, thank you!

Current: Ltd company with contract ending February 2020
Two options after February: (1) Umbrella for six months then ECM or (2) straight to ECM (12-months)
– different role (similar skills) same end-client, same recruitment agency

ECM is offering 34 days holidays. Umbrella payment illustrations have 28 days holiday.

To figure out my take home pay:
1. option 1 - contacted Umbrella Companies for payment Illustrations
2. option 2 - used Money Savings Expert (MSE) tax calculator and GOV.UK tax calculator – results are quite similar.

The Umbrella take home pay is just slightly higher than ECM but my calculation could be wrong.

Risk to option 1 / Umbrella – uncertain after initial period, client could advertise the role if wanting a permie

Questions:
1. Has anybody used those two calculators? are they reliable?
2. Will a different role be sufficient enough not to trigger a red flag?
3. Is there a benefit to doing a short term Umbrella? (repeated here)

I suspect going perm is less risk than going umbrella.

[pkr]

Latest review

Hi - New member here. Just read on FT about off payroll review. Does this mean existing contractors do not need to worry about invoices before April 6 2020 i.e. HMRC will not go back and chase contractors who were outside before and client has made them inside post April 6 2020.?

HM Revenue and Customs announced today (February 7) the changes to the rules, more commonly known as IR35, would now apply only to payments made for services provided on or after April 6 of this year.

Previously the rules would have applied to any payments made on or after April 6 2020, regardless of when the services were carried out.

[cojak]

Hi - New member here. Just read on FT about off payroll review. Does this mean existing contractors do not need to worry about invoices before April 6 2020 i.e. HMRC will not go back and chase contractors who were outside before and client has made them inside post April 6 2020.?

HM Revenue and Customs announced today (February 7) the changes to the rules, more commonly known as IR35, would now apply only to payments made for services provided on or after April 6 of this year.

Previously the rules would have applied to any payments made on or after April 6 2020, regardless of when the services were carried out.

Yes, it looks like it. I’ve just updated the initial post. Read here for more info.
https://www.contractoruk.com/forums/...ing-rules.html

[jorgelorenzo]

Working for other clients. How long for or how many other clients gets me out of IR35

I freelance in IT through a ltd co. and work for mainly one client. I have been advised that for myself to fall outside of IR35 all I need to do is work for other clients. The HMRC CEST asks me if i have done other similar work for other clients in the last 12 months, but not how many clients and for how long.

I HAVE done other work for other clients but for only a very short time. Is the whole point of working for other clients to prove that any one particular client isn't my main source of revenue and therefore I am not a disguised employee?

If working for other clients indeed proves this, then how many other clients does HMRC think it would take to be outside and is there any length of time I would need to work for other clients?

The CEST question about working for other clients is too simple, and even when I enter that my client doesn't take up the majority of my working time - "Off payroll rules apply"

Anyone understand how working for other clients effects the ruling?

Thanks in advance.

[Jay187]

Hi All

New to this forum.

My contract was extended in Jan 2020 from the end of Jan 2020 to April 2020. The client has recently conducted an assessment and deemed me inside. They have advised they would like me to remain until end of April but would require me to change to Umbrella mid March. Based on new changes announced last week by HMRC, should i only accept any changes be applied i.e from 1st April if i go Umbrella. Alternatively shall I just work on current contract as i am and leave before the 6th April?

Thanks in advance

[eek]

Hi All

New to this forum.

My contract was extended in Jan 2020 from the end of Jan 2020 to April 2020. The client has recently conducted an assessment and deemed me inside. They have advised they would like me to remain until end of April but would require me to change to Umbrella mid March. Based on new changes announced last week by HMRC, should i only accept any changes be applied i.e from 1st April if i go Umbrella. Alternatively shall I just work on current contract as i am and leave before the 6th April?

Thanks in advance

If you want HMRC chasing you for all the tax their believe you should have paid since the contract began then remain.

Otherwise leave before April as you don't want to take the risk. Personally I would be appealing the SDS statement and resigning immediately on the basis that the business relationship has broken down but I am very risk adverse...