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

[sojan]

Yes it does. Its very clear. Its when you get paid. If you get paid after the deadline then you are stuffed.

As. Cojak says. If you read the post again she's highlighted this point in bold!

Depends on your payment schedule. If you are on 30 days you invoice end if March, paid end of April. You are too late.

If you are on weekly you can work a bit longer.

You've got to work out your own payment terms to know when you can invoice last to get paid before the cut off.

Be aware of delays though.

Thanks. But The query was if the contract is NOT extended. So the scenario is
- outside IR35 till 30th March 2020
- invoice paid post 6th April 2020
- not waiting for determination from the client (or not accepting the clients determination)

[cojak]

Whether the contract is extended or not is irrelevant. The question for you is - is it likely that HMRC would bother with you if they came upon your determination?

[dx4100]

Thanks for this thread cojak - real food for thought and no real good option before any of us it seems.

I worry about leaving my client in December and then being stuck in the wilderness as clients get organised and provide determinations for their further requirements. Can see being out of contract between Jan and March if I pull the trigger and don’t renew.

What a mess all this is

[eldy]

Just had some good news today from the Agency

"If your contract has been confirmed as coming to an end by 31st December you will not be subject to an assessment"

So I just need to ensure next extension is set for 31st December end date and that's the end for me at that client. If someone else takes on the role then that's fine as the Agency/Client would assess them!

Sent from my SM-A705FN using Contractor UK Forum mobile app

[seminal75]

My 2 year contract with a large financial services company is due to end in March 2020. Basically the role goes with me. A QDOS review of contract and WP found me outside, it did need the "manager" to agree a tightening of WP to get it over the line, so I am in the "grey zone" somewhat. I accept this, hence my heightened risk awareness.

The client's IR35 approach is basically hopeless. They have only just started a "working group". The only communication they have released is that 'We are currently assessing roles. The IR35 determination will be given to contractors before the 13th December Furlough'.

As per advice on this site and elsewhere I have decided to consult with the client ahead of doing anything rash. I informed them that I will give notice (4 weeks) unless they can guarantee me that I will not be in scope for a determination, as I shouldn't be because as my role ceases before April. This seems like a reasonable request but due to the company's size and hopeless HR they cannot give me that assurance. My "manager" cannot get his head around why a potential inside determination should effect me even though I won't be there post April. He feels I would be letting him and project down by leaving forthwith.

I have other options and in fact would welcome a bit of time off, so leaving does not faze me, other than leaving the project ahead of completion. My question to you guys is if I do leave before the client hits me with a determination, and I give the true grounds for leaving (my manager knows it but doesn't 'get it') then could a possible future HMRC investigator view this as me tacitly accepting that I was inside all along? Indeed would I be better off and standing my ground and appealing any inside determination? I believe my 'manager' would help me with this if it means I see out the full term of my contract.

Any thoughts much appreciated.

[northernladuk]

My 2 year contract with a large financial services company is due to end in March 2020. Basically the role goes with me. A QDOS review of contract and WP found me outside, it did need the "manager" to agree a tightening of WP to get it over the line, so I am in the "grey zone" somewhat. I accept this, hence my heightened risk awareness.

The client's IR35 approach is basically hopeless. They have only just started a "working group". The only communication they have released is that 'We are currently assessing roles. The IR35 determination will be given to contractors before the 13th December Furlough'.

As per advice on this site and elsewhere I have decided to consult with the client ahead of doing anything rash. I informed them that I will give notice (4 weeks) unless they can guarantee me that I will not be in scope for a determination, as I shouldn't be because as my role ceases before April. This seems like a reasonable request but due to the company's size and hopeless HR they cannot give me that assurance. My "manager" cannot get his head around why a potential inside determination should effect me even though I won't be there post April. He feels I would be letting him and project down by leaving forthwith.

If they've a lot of contractors then they probably won't mind spending a bit of money to get this right. Put some feelers out to see if your client would be willing to engage with a 3rd party specialist for some consultancy on the issues, if nothing more than to go through their options and what the potential fall out will be, both from loss of contractors to the business and cost of getting it wrong.

If they are get on to QDOS quick and see if they can come in to help.

My question to you guys is if I do leave before the client hits me with a determination, and I give the true grounds for leaving (my manager knows it but doesn't 'get it') then could a possible future HMRC investigator view this as me tacitly accepting that I was inside all along? Indeed would I be better off and standing my ground and appealing any inside determination? I believe my 'manager' would help me with this if it means I see out the full term of my contract..

We don't know the answer to this really. You've just got to look at the facts and make a decision based on your risk appetite.

If you leave before a determination is made then you are in exactly the same position as you are now. You decide your IR35 status and HMRC will have to find you and investigate you as they do already.

If you leave and the next person doing the same role is determined as inside then a risk appears that your old role could have also been inside. HMRC would have a harder time finding you as you aren't on any list for comparisons. I imagine they'll be too busy with the next lot but never say never. Very small risk though.

If you stay and your role is determined inside then you are on the list. Outside, now inside? Lets have a look says Mr HMRC. You could fight your corner yes but if the client has done a proper job of determining the role inside and some of the factors are ones you thought were safe, i.e. they would never accept a RoS or their intention was to use you as a permatractor then there is nothing you can do about it. Really depends on the reason it is now inside. Don't forget avoiding an investigation is 80% of the battle. They aren't pleasant even if you win. You've 2 years as well. Lots of nice back tax to go after.

So it's down to how lucky you feel. None of this retrotax may ever come about so some contractors might feel aggrieved they left gigs they liked, HMRC might stuff every single contract on an outside/inside. We just don't know.

I don't think it's the time to be precious about gigs though. We chop and change though out our career so another change shouldn't really be a problem. There should be plenty of roles with other people leaving ones they can't claim expenses on or avoid being a target. Some of the newer guys that still don't have a contractor mindset or are on their first gigs are going to find the decision very difficult I imagine.

[seminal75]

Thanks NLUK, basically your thoughts align with my gut feel. Thanks for putting it in language that clarifies the issues for me. Yes, it is a bit of a 'balance of probabilities' versus 'risk appetite' decision. I've got some important thinking to do over the weekend.

As for your first question. The client is heavily dependent on contractors as they are undergoing a huge IT Transformation following a merger. Existential even. It has surprised me that they haven't been quicker off the mark with all this, but HR have been busy with post merger perm contracts alignment, tupe, redundancies and Brexit etc.. However I think they will spend money to 'get it right' and signs are there that they may be open to keeping a number of vital contractors as outside post April. This is also a factor in my thinking.

[PaulBurger]

I have a question on the renumeration side of outside/inside determinations... so contracts stating that you work ‘9-5, 5 days/wk at a rate of £x/day’ would be indicate inside and ‘fixed price based on fixed deliverables’ would indicate outside... what is the view on a contract stating ‘you will be compensated £x/hour based on agreed billable hours in the month’ ?

No mention of how many days are required in the month, no mention of required working hours etc, and in practice you do invoice varying numbers of hours worked, would this indicate an outside determination for this element of the overall picture ?

Appreciate any input.

[cojak]

I have a question on the renumeration side of outside/inside determinations... so contracts stating that you work ‘9-5, 5 days/wk at a rate of £x/day’ would be indicate inside and ‘fixed price based on fixed deliverables’ would indicate outside... what is the view on a contract stating ‘you will be compensated £x/hour based on agreed billable hours in the month’ ?

No mention of how many days are required in the month, no mention of required working hours etc, and in practice you do invoice varying numbers of hours worked, would this indicate an outside determination for this element of the overall picture ?

Appreciate any input.

Not in my view no, hours worked is irrelevant to IR35.

[sim2kuk]

So, seems I'm in the same position as a lot of people.

My contract comes to an end on October 31st (the specific role I'm on comes to an end as a permie is taking over the project). I am being offered a new 3 month contract on a new project.

My client has not even started looking at what they are going to do, which is mad because it's a very large business.

So, my question is the following - If I accept the new contract, and I get an Inside IR35 determination for this new role, will I be liable for back-tax on my previous roles, or just on the new 3 month contract? If it's only the 3 month contract it's not a big deal.

From what is being said above, I might be alright (he says hopefully)?