New gig sold as outside IR35 - how to make sure this is the case ?

[philgo]

You should avoid using your accountant for anything like this as it could put you within the scope of the MSC legislation (there’s some good threads on here about how to avoid this). Also try to avoid any accountant’s that look like MSCs e.g. providing company set up, etc if you haven’t picked one already.

Indeed I will keep things separated.

I’d agree with the others on here about the IR35 status, sounds like your agency/consultancy is fobbing you off with nonsense. Hope you can get it sorted ok.

I am trying to understand the way this assignment works by getting the papers.

Just seen your update: if it’s chapter 8 then you would be responsible for the IR35 status not the agency I believe, I’d recommend getting your own review for your records from B & C or similar if this is the case (they’ll want to confirm it is a smaller company first).

[/QUOTE]

Yes this is where I am unclear. Why did the agent generated a SDS report on his company behalf and share it with me. I though if chapter 8 I was in charge. Really confusing.

[philgo]

If the client says it's outside then you are good, if they got it wrong they are liable based on the new rules.

Is that as easy as that...not sure...

[jamesbrown]

If agency is in charge of SDS, I guess it means contract falls under chapter 8 explaining why he is doing the assessment himself instead of the client. Does this make sense?

There is no SDS under Chapter 8.

It sounds like you and the agent/consultancy are equally confused, TBH.

Under Chapter 10, the SDS is the responsibility of the "end client", which is almost certainly the consultant's client in your chain. The Fee Payer is liable, in the first instance, and is almost certainly the consultant in your chain. But there is a small possibility that this is a fully outsourced/managed service, in which case the consultant is both the end client and Fee Payer. Very unlikely. In that case, there's a further chance that the consultant is small under the CA 2006 definition, in which case no SDS is needed. Again, there seems to be a litany of cluelessness in your supply chain.

[malvolio]

That's a different and interesting point of view. However different from previous comments. When I said interpretation is not easy in IR35 world I guess I am spot on.

Could you expand why is contract safer under chapter 8 vs 10 based on my scenario please?

Simple. Under Chapter 8 you are clearly liable for any mistakes, errors in assessment, back taxes, interest and penalties that may arise. Under Chapter 10 you probably aren't directly responsible, but there's a good chance you will end up recompensing those that were, including HMRC.

If you are really that worried/confused/unclear/inexperienced, then go umbrella and sidestep the whole thing. Use that time to learn IR35 properly and in detail ready for the next contract.

Personally I would have walked away a long time ago.

[jamesbrown]

That's a different and interesting point of view. However different from previous comments. When I said interpretation is not easy in IR35 world I guess I am spot on.

Could you expand why is contract safer under chapter 8 vs 10 based on my scenario please?

Because you are largely in control of the determination/risk under Chapter 8 and there isn't a huge incentive for the client to buckle under pressure, since they are clearly not liable. In fact, there is a moderate incentive for them to back you up. Under Chapter 10, the supply chain is responsible and liable and once legal get involved, they will do whatever is expedient, especially if the contract allows them to pursue YourCo for the mistake.

[Unix]

Is that as easy as that...not sure...

Yes, just close your company down after each contract if you are worried.

[philgo]

Simple. Under Chapter 8 you are clearly liable for any mistakes, errors in assessment, back taxes, interest and penalties that may arise. Under Chapter 10 you probably aren't directly responsible, but there's a good chance you will end up recompensing those that were, including HMRC.

heu...so where is the point of chapter 10 if you can be responsible for tax repayment down the line ?

[malvolio]

heu...so where is the point of chapter 10 if you can be responsible for tax repayment down the line ?

You're not. You may well be contractually obliged to repay any costs incurred by an incorrect assessment. A distinction without a difference perhaps.

IR35, as you are discovering, is a nightmare. It gets worse the more you learn about it. I've been learning it since it first arose and still get confused on occasion.

[jamesbrown]

heu...so where is the point of chapter 10 if you can be responsible for tax repayment down the line ?

From whose perspective? The point is quite clear from HMRC's/govt's perspective - it is much cheaper and quicker to police than Chapter 8. More money, less effort, job done. HMRC really don't care where the money comes from and encourage the Fee Payer to do whatever is necessary.

Indeed, it may be the case that the fees are reclassified ex post as employment/PAYE income by the Fee Payer and then applied directly by the Fee Payer to the individual (certainly, employees are already liable for PAYE errors made in good faith). This is largely unknown and not litigated, so advice of the type provided by Unix may turn out to be completely useless.

[philgo]

You're not. You may well be contractually obliged to repay any costs incurred by an incorrect assessment. A distinction without a difference perhaps.

IR35, as you are discovering, is a nightmare. It gets worse the more you learn about it. I've been learning it since it first arose and still get confused on occasion.

Yes it's a nightmare, badly written and subject to too many interpretations which is not good for anyone except for HMRC.
What I also noticed is that not everyone is on the same page regarding it on this forum either. Not surprising because of the complexity of the rules