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

[Hobosapien]

... 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.

I had a contract with a similar method of billing, based on a maximum number of days the client had signed off by management over a period of time for budgeting. There was no contracted terms on how those billable days would be provided or any obligation to actually work them if not needed.

This to me felt closer to the 'independent contractor' status that the Taylor Review proposed, and apparently (see thread elsewhere) may form the next set of rules to impact contracting (will see in the November budget if that comes to pass), as I was free to work for other clients outside of those billable days.

So if you can get the contract terms written so that you are under no obligation to deliver anything and client is under no obligation to give you any work, and you arrange it via ad-hoc billable days to be determined by the client's needs then that may pass inspection during a contract review. Obviously this type of scenario is not common amongst the typical project based deliverables where the client has enough work to require a more consistent and up-front planned presence by the contractor.

The kicker in my situation was the client (a public sector body) deemed me inside IR35! Pretty sure if the determination was up to me (as it currently is in the private sector) that it would have been deemed outside IR35. So regardless of the contract situation the client may not give you the determination you think is right.

[Paralytic]

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)?

Not sure where you get the idea you might be alright. Your current role being taken over by a permie is a pretty strong indicator that the role is already inside IR35. If HMRC investigate you and determine it was inside, you'll be due the back-tax.

This is completely irrelevant to whether the new role is inside or outside, other than if something you subsequently do brings you to the attention of HMRC, a review of your previous contracts is more likely. Going from an outside contract to an inside contract at the same client may cause that, but no-one here can tell you how HMRC will approach things.

[sim2kuk]

Not sure where you get the idea you might be alright. Your current role being taken over by a permie is a pretty strong indicator that the role is already inside IR35. If HMRC investigate you and determine it was inside, you'll be due the back-tax.

This is completely irrelevant to whether the new role is inside or outside, other than if something you subsequently do brings you to the attention of HMRC, a review of your previous contracts is more likely. Going from an outside contract to an inside contract at the same client may cause that, but no-one here can tell you how HMRC will approach things.

Let me explain it a little differently. My role (along with contract) is coming to an end on the 31st October. The permie who is taking over the Project is already on the project and has been for the last month. Therefore, there are currently two roles on the project, my one, and the permie one. My role is going when my contract expires but the permie one is staying.

Just out of interest, how will HMRC know that I have had a previous contract at the Client? This is not an extension - it's a completely new contract in a different part of the Business, on a different project.

I understand this may not make a difference, and so-be-it if it doesn't - I'll have to turn down the contract.

[cojak]

Then let me respond a little differently...

Let me explain it a little differently. My role (along with contract) is coming to an end on the 31st October. The permie who is taking over the Project is already on the project and has been for the last month. Therefore, there are currently two roles on the project, my one, and the permie one. My role is going when my contract expires but the permie one is staying. If the permie does the same job as you, You are leaving, the role is taken over by a permie - highly likely inside IR35

Just out of interest, how will HMRC know that I have had a previous contract at the Client? This is not an extension - it's a completely new contract in a different part of the Business, on a different project. Because the client has to tell them. It's the law.

I understand this may not make a difference, and so-be-it if it doesn't - I'll have to turn down the contract. No, it doesn't make a difference.

[dx4100]

Your current role being taken over by a permie is a pretty strong indicator that the role is already inside IR35.

Then let me respond a little differently...

The ability of someone perm being capable of taking over our project and doing the work isn't an indicator at all... We aren't some sort of specialist master race

His working practices are what counts...

We seem to be forgetting the fundamentals of IR35 or a basic defenses against it.

[Unix]

Not sure where you get the idea you might be alright. Your current role being taken over by a permie is a pretty strong indicator that the role is already inside IR35. If HMRC investigate you and determine it was inside, you'll be due the back-tax.

This is completely irrelevant to whether the new role is inside or outside, other than if something you subsequently do brings you to the attention of HMRC, a review of your previous contracts is more likely. Going from an outside contract to an inside contract at the same client may cause that, but no-one here can tell you how HMRC will approach things.

After April 1st the client is liable for IR35 not the individual contractor. The law changes so you can no longer be investigated individually even for past contracts.

[sim2kuk]

Then let me respond a little differently...

OK, makes sense. It's an odd one as obviously the contract is outside, I use my own stuff, determine where I work etc, but I understand what you're saying.

I guess all contractors that have a job on any project have the same issue - if their role is the same as a permanent role within the business (so whether that is a tester, BA, PM, Programme Manager) then there is always a risk that if you leave a role before project completion it could be taken on by an internal member of staff.

[cojak]

After April 1st the client is liable for IR35 not the individual contractor. The law changes so you can no longer be investigated individually even for past contracts.

Really?

I would point that out to these guys then.. IR35 inspectors to probe public PSCs retrospectively

[Unix]

Really?

I would point that out to these guys then.. IR35 inspectors to probe public PSCs retrospectively

This was the assessment yesterday from three separate experts on the incoming rules; status advisory Bauer & Cottrell, IR35 reviewer Qdos Contractor and contractor trade group IPSE.

Wonder why these sellers of IR35 insurance would say that???



They're about to loose a lot of customers. HMRC will stop investigating individuals after April as it never worked for them. Now they have a sledgehammer.

[cojak]

Wonder why these sellers of IR35 insurance would say that???



They're about to loose a lot of customers. HMRC will stop investigating individuals after April as it never worked for them. Now they have a sledgehammer.

It might be had not ComplianceLady also seen this.