Be careful if you take Outside IR35 contracts

[eek]

So what's everyone's opinion on IR35 Insurance given the topic of this thread?

If you're confident in your outside status, and not forced to work through an Umbrella because of blanket rules, 2 days billing covers you for £250k.

Devil will be in the detail of that insurance. Prior to April 2021 the insurance paid for your legal representation to fight your IR35 argument - but what exactly does it cover now and does that help you?

[ensignia]

Well, you carry on double and triple billing This thread obviously isn’t aimed at you, so you can go on with your day unencumbered by this, can’t you.

I'll bookmark this thread, I'm sure in the coming months it will be bursting at the seams with desperate contractors who have fallen foul of this rule.

[cojak]

I'll bookmark this thread, I'm sure in the coming months it will be bursting at the seams with desperate contractors who have fallen foul of this rule.

You do that.

[Dark Black]

So what's everyone's opinion on IR35 Insurance given the topic of this thread?

If you're confident in your outside status, and not forced to work through an Umbrella because of blanket rules, 2 days billing covers you for £250k.

Except that it probably won't cover you.

Certainly with regards to the QDOS TLC35 insurance, I have it in writing from them that they won't cover claims where the client is responsible for the IR35 determination.

[jamesbrown]

New article in the FT, unfortunately behind a paywall. This mainly talks about the opposite situation where a contractor has be wrongly classified as inside, but also contains this nugget w/r to the view from officialdom about claiming underpaid taxes back from contractors:

Hiring businesses or public bodies may be able to get contractors to reimburse them for paying their full tax, officials added, if it was covered in a contractual arrangement between the two parties.

Sounds like this is commentary from a PAC hearing on Monday, so I will have to listen to that.

https://www.ft.com/content/4538f628-...8-0b386c8bc1ae

[jamesbrown]

Another quote:

The rule changes also made businesses liable for any tax due if they wrongly assessed workers but they did not set out what would happen to the tax already paid by the contractors. HMRC has now said that miscategorised workers can reclaim any tax they have paid on income earned in that situation.

[eek]

To find the article for free search for "Contractors in UK can escape tax if new hiring rules are misapplied" on google and click the link that appears.

And we wonder why most sane firms went for a blanket ban...

[agentzero]

No need to go near google.

https://12ft.io

https://12ft.io/proxy?q=https%3A%2F%...8-0b386c8bc1ae

[Lance]

I've got a proper SDS from the QDOS assessment I did, but I think people (as ever, on here) are being totally paranoid about this.

Some seem to think that HMRC have extensive knowledge of contractors' accounts, and their sophisticated systems will be harvesting teraflops worth of data trying to catch one-man band IT geeks out.

When the public sector reforms came in in April 2021, many on here were almost rubbing their hands in glee at the 1000s upon 1000s of permietractors rolling over and going Inside doing the exact same role as HMRC would no doubt come knocking. This hasn't happened, people are still in these roles, and many have closed their companies which is surely the biggest sign of disguised employment going?!

Truth is, chances of anyone being affected by this new guidance is slim to none.

Obviously, I know it does happen but I think people need to calm down and stop using this as yet another way in which HMRC are out to get poor old contractors

Something is missing about this hot take.
April 2021 was the start of the rules. We have yet to have a complete tax year since they came in. So it hasn't happened yet.

I'm no mystic when it comes to tea leaves and crystal balls. I don't know what is going to happen. But if your approach is to not actually wait for the first plausible chance of something occurring before deciding there is little/no risk then I question your opinion on that basis alone.

All the rest of the opinion is just noise as it's based on flawed evidence.


As for when will we know what is happening? April 2022 will be one full year of the legislation, and Jan 23 when SATRs are filed. So I'd be waiting for at least 6 months after that, probably as long as 18. That takes us to summer 2025 when we will start to see what is emerging.
If they investigate companies accounts, it's a similar timeframe. Assuming YE of April, the accounts will be submitted January 2023, with just one year of new legislation. So realistically HMRC aren't going down that route, so it just pushes further back. Again I'd wait 18 months, and for more than one month in a company year, which is going to be getting on for 2026 by the time we know what is happening if they take that route.

Any speculation before then is speculation. Some of it based on actual evidence and knowledge of the legislation. And some of it on guesswork (I'll leave the reader to determine whose I think is which of those).

[Keanu2020]

Another quote:

The rule changes also made businesses liable for any tax due if they wrongly assessed workers but they did not set out what would happen to the tax already paid by the contractors. HMRC has now said that miscategorised workers can reclaim any tax they have paid on income earned in that situation.

Trying this out now . . . .