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

[jamesbrown]

So if above is the scenario is question what can be done ?

If you cannot trust the business that wants to contract with your business? For me, the answer is pretty obvious. That said, if you really need this gig and the contract has no claw back clauses, then simply document your thoughts in writing and their response so that there is little chance that you’ve engaged in conspiracy to defraud and, in principle, the supply chain above YourCo will be responsible and liable when HMRC discovers that they failed to issue a timely SDS with an accurate determination under Chapter 10, which almost certainly applies. Again, though, I wouldn’t be willing to engage my company with such a bunch of clueless chancers.

[jamesbrown]

Realistically? Decide that it is inside IR35 and pitch the rate accordingly at around 25% over the outside rate - or walk away. The intermediate "consultancy" does not come across as someone with whom to do business, to be honest.

Or, in fewer words, what Mal said.

[northernladuk]

My comment is linked to a few odd things you've said on the accoutants thread but the best way to make sure you are outside is for you to know everything about the legislation and not have to ask questions all the time. There are two elements to it. The paperwork inc the SDS and getting those right, the second is you knowing enough about it to actually stay outside. Get the paperwork wrong or screw your own IR35 status by acting like a permie are the only two risks.

Read up, learn it, run your own company, use services like accoutants and tax advisors properly and you'll be fine. Playing tickbox IR35 is not the way to stay outside.

[philgo]

My comment is linked to a few odd things you've said on the accoutants thread but the best way to make sure you are outside is for you to know everything about the legislation and not have to ask questions all the time. There are two elements to it. The paperwork inc the SDS and getting those right, the second is you knowing enough about it to actually stay outside. Get the paperwork wrong or screw your own IR35 status by acting like a permie are the only two risks.

Read up, learn it, run your own company, use services like accoutants and tax advisors properly and you'll be fine. Playing tickbox IR35 is not the way to stay outside.

Agreed, still a lot to read and learn. Asking question in a collaborative forum is helping my learning curve.

And yes need to make sure contract + SDS is compliant as well as my working practice.

[Unix]

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

[malvolio]

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

Under Chapter 10, and then only "probably". We're not sure that actually applies to the OP.

[jamesbrown]

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

Crucially, the Fee Payer is liable when an SDS is issued timely and with reasonable care and the Fee Payer has the contract with YourCo and can easily insert clawback clauses that could work, in principle, and certainly HMRC encourages Fee Payers to do so. This is why it's entirely sane (IMHO) to avoid Chapter 10 outside contracts altogether - Chapter 8 outside or umbrella are the only sensible options.

[philgo]

It's fairly straightforward:

1. Are you working on an end client site and/or interacting with end client staff regularly (client being the entity that commissioned the service, not the consultancy/agency)?
2. Is the end client a medium or large company according to the CA 2006?

If your answer to both of these questions is "yes", then the contract falls under Chapter 10 and you must insist on an SDS from the end client (via the agent/consultancy). You should also check the contract carefully for claw-back clauses, which may work, in principle. This has nothing to do with overriding statute law. If your answer to (1) is "no", then it may be a fully outsourced service and you should answer (2) with respect to the consultancy, which is then the "end client" in your chain. If the answer to (2) is "no", then it's Chapter 8 (aka "old IR35"), else Chapter 10.

The only real complexity here is whether it is truly an outsourced service if the answer to (1) is "no". In most cases, and I suspect in your case, the answer to (1) is clearly "yes", so there is really no complexity.

So I am back with slightly more understanding and inputs.

Agent sent me the IR35 SDS report that "he generated again this morning". The doc is from Qdos so assuming he is using Qdos tooling. The agent answered 12 questions to get status OUT IR 35. So it sounds like agency is in charge to determine the status.
Good for my records but does not mean this is right as agency might have answered differently from what is written in contract and not taking into account the reality of the working practice. Looking at the website it seems to be an agency offering clients to find expert for them via services like assignment (in this case) , SOW or perm hiring.

I did ask him to confirm whether his company is in charge of the SDS instead of the end client where the labour will be done.
Initially he said to me I would be the one doing the determination but it sounds like I misunderstood or he changed the version.
Waiting his reply now.

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?

Then on the going regularly to client site posing issue under chapter 8, is this really an issue as long as I agree my planning with end client?

[gixxer2021]

The Accountancy company I will chose would do or not ?

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.

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.

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).

[philgo]

Crucially, the Fee Payer is liable when an SDS is issued timely and with reasonable care and the Fee Payer has the contract with YourCo and can easily insert clawback clauses that could work, in principle, and certainly HMRC encourages Fee Payers to do so. This is why it's entirely sane (IMHO) to avoid Chapter 10 outside contracts altogether - Chapter 8 outside or umbrella are the only sensible options.

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?