ir35 in private sector

[jamesbrown]

It can't, because of IR35, but that's the only reason.

Yes, it's certainly a reason. Still, I take the same approach with all clients and get the requirements in a schedule of work, including when they change. I'd never completely trust a client, even ones that I've worked on-and-off with for years; staff change, priorities change, opinions change, and you really only have the contract to fall back on if there's a dispute. It might be different if I were supplying materials rather than intellectual property, but there's ample room for confused expectations w/r to professional services. Yes, it also makes it easier to evidence lack of control over delivery, but that's just a reflection of the reality that IR35 is attempting (imperfectly) to capture.

I think the example you provide would be captured in an existing line item. If it's truly that different, I'd want a different line item, for sure, but it's no more complex than adding a line to a schedule of work and getting it signed off.

Anyway, minor differences aside, I agree with you completely about the CEST being totally unworkable and about this being an excellent case study.

[malvolio]

In that scenario you don't need a new contract or a detailed SoW, an email making the request and your agreement in reply would suffice. The Control aspect is whether or not you're allowed to say no to the request, not that the request can be made, as long as the request is related to the existing contract schedule. If the contract says "Fix application X" you could agree to add a feature to Application X as per the above, but you couldn't really work on Application Y just because you know how: that requires a formal SoW as a minimum

In other words, Control is not a simple binary situation, which the CEST nonsense fails to recognise totally, and why CEST is a crock of horsefeathers

[jamesbrown]

an email making the request and your agreement in reply would suffice

I agree with your definition of control w/r to IR35 - it's about the right of control. In terms of the above, if it comes from the client's authorised representative, I would accept that. I wouldn't accept it from some random PM, for example. However, I'm not talking about IR35 here or even the law, per se, because two parties can change their minds and institute a verbal variation even when the contract demands a written one (there is case law on this). Essentially, the client should keep a tight reign on their staff w/r to discussing requirements. It's more about retaining a paper trail and ensuring expectations are aligned. For example, having control to deliver a project and to not consult with the client when something new is required (but not strictly in a schedule of work) is actually good for IR35, but I'd still want that documented, personally. YMMV. Control matters when it's coming from the client and, specifically, when they can (have the right to) change your workflow or tasks on a whim. Being too cowed by IR35, either way, is the tail wagging the dog.

[OneManBand]

How do I calculate how much IR35 tax liability cover I really need?

Do I need cover for only the last 6 years?

Does the tax liability get offset against what the company and I have alrrady paid as corporation tax and personal tax?

How much penalty should I account for?

Who pays? The company or me, or both?

Thanks in advance.

[northernladuk]

How do I calculate how much IR35 tax liability cover I really need?

Do I need cover for only the last 6 years?

Does the tax liability get offset against what the company and I have alrrady paid as corporation tax and personal tax?

How much penalty should I account for?

Who pays? The company or me, or both?

Thanks in advance.

What?? Are there products out there that ask for all this? I thought you just paid a set fee and don't have to ask all these questions. Ring a few of the providers like IPSE or QDOS and ask.

[OneManBand]

What?? Are there products out there that ask for all this? I thought you just paid a set fee and don't have to ask all these questions. Ring a few of the providers like IPSE or QDOS and ask.

You have to choose the amount of cover, and the premium will depend on that obviously. I think I chose too high an amount when I bought my Qdos policy.

The last question was for my own understanding.

[northernladuk]

You have to choose the amount of cover, and the premium will depend on that obviously. I think I chose too high an amount when I bought my Qdos policy.

The last question was for my own understanding.

According to this page further down they offer a free service to help you calculate what you are asking.

https://www.qdoscontractor.com/tax-liability-insurance

[simes]

Thus inspired by my own post above, I have popped the question to IPSE to see if their membership would ever be tailored towards contractors instigating the IR35 actions and the provision of legal support thereafter...

And the answer is, No.

"I have spoken with the insurer and they have told me that if you were to instigate and investigation this would not be covered by your IPSE membership. This is because this wouldn’t be treated as a routine check / enquiry from HMRC and therefore there effectively isn’t an insured event under the terms of the policy.

If you did want to instigate an enquiry Abbey Tax would be able to help you but this would be on a fee paying basis. If you have any further queries please let me know."

Which makes me wonder if the IPSE insurance would then become redundant from 2019, or from whatever period of time HMRC feel they can morally no longer instigate an investigation...??

[malvolio]

And the answer is, No.

"I have spoken with the insurer and they have told me that if you were to instigate and investigation this would not be covered by your IPSE membership. This is because this wouldn’t be treated as a routine check / enquiry from HMRC and therefore there effectively isn’t an insured event under the terms of the policy.

If you did want to instigate an enquiry Abbey Tax would be able to help you but this would be on a fee paying basis. If you have any further queries please let me know."

Which makes me wonder if the IPSE insurance would then become redundant from 2019, or from whatever period of time HMRC feel they can morally no longer instigate an investigation...??

And for the umpteenth time IPSE do not sell insurance and you are not buying insurance. what you are buying is a membership that includes representation in any tax-related investigation or tribunal case. That is not the same as free legal fees because you want to initiate your own case. IPSE cover is defensive and, it has to be said, highly effective.

[simes]

Indeed.

For any of those having trouble, insert the words 'membership benefit' between 'IPSE' and 'Insurance' and I think this should cover it.

Granted all else you say, I doubt there is any misunderstanding there at all. Mine is just querying the efficacy after 2019, or thereabouts.