Supposedly outside IR35 contract, but work looks in?

[LouC]

Morning everyone

I'm in the late stages of accepting a new contract. The client says it's outside, but the work they're talking about looks BAU. The company is mid size (about 350 people I think), so not exempt.

Is this something I need to be concerned about? Or do I not need to worry about it because they're the ones taking a risk in case of an audit?

Many thanks!

[eek]

In an ideal world you have nothing to worry about. Determinations would be made prior to work beginning and would be fixed.

however, the new IR35 rules are not ideal and the determination can be changed up to the point end client makes the first payment to the agency so there is a risk of a bait and switch operation playing out and an announcement in a month or 2 in that “sorry, this work is inside”.

now it may not happen but you need to be aware of the possibility.

[LouC]

Yikes, I hadn't thought of that. I'm guessing they're just winging it. I suppose I'd have to leave if that happens...

[Andy Hallett]

Ultimately the risk is with the fee payer. Make sure the contract states that they will be paying you 'Outside IR35' without deductions etc. Ultimately the liability is with them not you.

[eek]

Ultimately the risk is with the fee payer. Make sure the contract states that they will be paying you 'Outside IR35' without deductions etc. Ultimately the liability is with them not you.

As the fee payer isn't the person making the final decision can you really see any agency willing writing a clause that results in them being responsible for Employer NI when their margin may be similar or lower to the Employer NI rate?

[Andy Hallett]

As the fee payer isn't the person making the final decision can you really see any agency willing writing a clause that results in them being responsible for Employer NI when their margin may be similar or lower to the Employer NI rate?

Depends on how much they want the profit on the contract. If the fee payer has done their bit correctly, and the end client is at fault then the agency can push up the chain.

[Peoplesoft bloke]

Surely the fact that work is "BAU" is irrelevant. Truckers can be outside IR35 even though one could argue that job is all BAU. As long as the contract has specific deliverables like " drive a truck from point A to Point B and take a load of tulip off the staff at each place and be told no you can't use the toilet" then that's OK surely?

[jayn200]

There are lots of threads on here from people who were told it was Outside, then started work or about to start work and been told it's been reassessed and inside.

[jojingles]

I am just trying to further my knowledge.

Hypothetically, if I was given an outside SDS by the end client (direct - no agency involved).

Do I have any concerns in relation to IR35?

If HMRC come calling and they say no it was inside is there any comeback on my Ltd Co?

From what I have read once the first payment has been made the determination is fixed unless they issue a further one (it cannot be retrospective applied after the first payment has been made) - is that everyone’s understanding?

Also I am aware of contractual clauses floating around which may try to shift liability back to me. If the contract had that I would not sign it.

So my ultimate question is should I be concerned?

Thanks in advance

[eek]

Prior to today - in your exact scenario with an SDS issued and no agent in the middle I would have said you have nothing to worry about

sadly, I’m no longer sure that’s the case so after I speak to hmrc I will post an accurate response