Advice on outside IR35 but first payments have TAX&NI deducted

[jayjay69]

Assumptions make a ass of you.

Nothing you have said tells me that the contract is outside - only an SDS determination from the end client would give me that reassurance.

I have to agree and will soon see as I have just asked where mine is...

[jayjay69]

Can I clarify on this ? This was my understanding on SDS.
iI any party in the supply chain fails to pass the SDS to the next party in the chain, then they will become the ‘fee-payer’, responsible for deducting the worker’s tax liabilities, and paying HMRC.
In that case if the agency have not passed on to myself but don't deduct tax/NI is it not deemed they are the fee payer?

[jamesbrown]

Strictly, the SDS should be passed down the supply chain (by the time the first payment has been made by the end client, which could be some time after YourCo receives a payment), but this only becomes a material risk for the supply chain above YourCo when tax is underpaid, and that sounds like it isn't the case here. In other words, the agent may have told you a tall story about it being outside, but it isn't and there is a very strong asymmetry in enforcement action here because the basis for enforcement by HMRC is their being out of pocket and they aren't. You could try to argue the deductions were unlawful, but you won't get very far. Sucks, but there you go.

[eek]

Can I clarify on this ? This was my understanding on SDS.
iI any party in the supply chain fails to pass the SDS to the next party in the chain, then they will become the ‘fee-payer’, responsible for deducting the worker’s tax liabilities, and paying HMRC.
In that case if the agency have not passed on to myself but don't deduct tax/NI is it not deemed they are the fee payer?

Let's go back to the conversation I had with HMRC last week

Where HMRC said to me (the feepayer / agency) - go back to the poor contractor and reclaim the money from them.

[cojak]

Basically the agent told you outside and you think it's outside.

But the agent lied and you're inside really.

That's it. Be thankful that you've started paying tax and NI from the beginning, you might have had a large bill otherwise.

[jayjay69]

Let's go back to the conversation I had with HMRC last week

Where HMRC said to me (the feepayer / agency) - go back to the poor contractor and reclaim the money from them.

Point taken...left wide open ...

[jayjay69]

Basically the agent told you outside and you think it's outside.

But the agent lied and you're inside really.

That's it. Be thankful that you've started paying tax and NI from the beginning, you might have had a large bill otherwise.

That is one of the plus sides no hefty bill and I am still getting paid regardless although if they were honest from the start I would have negotiated a better rate.

[Paralytic]

That is one of the plus sides no hefty bill and I am still getting paid regardless although if they were honest from the start I would have negotiated a better rate.

I think you've now realised where your assumption went too far...

[northernladuk]

Sorry worded that incorrectly on the inside part, this was a completely different contract that switched to inside after being out when I renewed. The point I was making is that I was glad to be offered outside in a market that was inside...

Ah OK. Just be careful with your terminology.

Yep the contract states until June 2022...

And you think that is a guarantee?

How long have you been contracting if you don't mind me asking?

[jayjay69]

Ah OK. Just be careful with your terminology.

And you think that is a guarantee?

How long have you been contracting if you don't mind me asking?

There is never a guarantee with any contract length I have learned over the years, don't get me started on spurious or incorrect payments, T&C's etc or actual role once on a client site...

In total contracting six and a half years...