Switching to IR35 caught mid contract

[gingerjedi]

Supposing I decide I am inside and want to declare myself as caught, how is this possible mid contract?

From my understanding the only difference would be taking a full salary rather than splitting with dividends, by my calculations (as travel expenses are allowed within 2 years) I'd be about £2.5-3k worse off, maybe less with the flat 5%.

Would it be worth switching or would I be better off just putting the money aside and forgetting about it?

[Clare@InTouch]

It's possible for a contract to be outside then inside, it happened with JLJ Services recently. Just increase your salary & NI to equate to 95% of the contract income. Adjust for pensions and other allowable costs.

If you're genuinely inside it's better to face it than try to bury your head in the sand. Penalties from HMRC are behaviour related these days, so acknowledging a change would result in lower penalties if the worst did happen years down the line.

Do you think the contract is actually caught?

[gingerjedi]

It's possible for a contract to be outside then inside, it happened with JLJ Services recently. Just increase your salary & NI to equate to 95% of the contract income. Adjust for pensions and other allowable costs.

If you're genuinely inside it's better to face it than try to bury your head in the sand. Penalties from HMRC are behaviour related these days, so acknowledging a change would result in lower penalties if the worst did happen years down the line.

Do you think the contract is actually caught?

I'll PM you.

[malvolio]

Thing is, unless the contract has changed to put it inside IR35 (in the JLJ case it was because he'd gone from doing specific work to doing anything passed over to him) then it's either in or out from day one. If you accept it being inside now, you would really need to go back to the start and recalculate the tax liability.

Before doing that though, I'd be very certain the contract is caught.

[gingerjedi]

Before doing that though, I'd be very certain the contract is caught.

Or just ignore and get away with it in all likelihood.

If they want people to 'go straight' they need to put the hammer away.

[Chugnut]

Thing is, unless the contract has changed to put it inside IR35 (in the JLJ case it was because he'd gone from doing specific work to doing anything passed over to him) then it's either in or out from day one. If you accept it being inside now, you would really need to go back to the start and recalculate the tax liability.

Before doing that though, I'd be very certain the contract is caught.

Surely the working practices are the thing to focus on here rather than the contract though.

Let's say your main contact at the client allows for a substitution clause in the contract and backs that up in a "confirmation of working practices" questionnaire/email. What happens when they leave a year later and their replacement doesn't want a sub? It's unreasonable to find yourself inside IR35 retrospectively in this case, no?

[malvolio]

Surely the working practices are the thing to focus on here rather than the contract though.

Let's say your main contact at the client allows for a substitution clause in the contract and backs that up in a "confirmation of working practices" questionnaire/email. What happens when they leave a year later and their replacement doesn't want a sub? It's unreasonable to find yourself inside IR35 retrospectively in this case, no?

To be clear, when I say "Contract" I Mean the whole thing, real work and paperwork. Which, of course, always align perfectly and are also fully aligned to the agency/client contractual terms. Oh, hang on...

[escapeUK]

Supposing I decide I am inside and want to declare myself as caught, how is this possible mid contract?

From my understanding the only difference would be taking a full salary rather than splitting with dividends, by my calculations (as travel expenses are allowed within 2 years) I'd be about £2.5-3k worse off, maybe less with the flat 5%.

Would it be worth switching or would I be better off just putting the money aside and forgetting about it?

Wouldnt it be worth serving notice and finding a contract that is outside?

[Chugnut]

To be clear, when I say "Contract" I Mean the whole thing, real work and paperwork. Which, of course, always align perfectly and are also fully aligned to the agency/client contractual terms. Oh, hang on...

Absolutely!

I was able to put a clause into my contract with the agency saying that no terms in the upper level contract can negate or invalidate any terms in mine. For what it's worth. I just hope it shows an awareness and a degree of due dilligence.

I end up banging the IR35 drum whenever something comes up which could affect my status, to the degree that at least other people may remember me as "that bloke who kept on about it". You almost end up isolating yourself because the majority of other contractors I've met seem to be paying it lip service or totally ignoring it.

[gingerjedi]

Wouldnt it be worth serving notice and finding a contract that is outside?

I'm currently working in support, no definable work just day to day problem solving so no, they don't exist.