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

[jayjay69]

Looking for thoughts on a new contract that I started four weeks back but with payment issues.
To keep it simple :
Deemed inside IR35 until a week before starting ,agency said good news now deemed outside and this is stipulated on contract.
Weekly payment system each Friday via a completed manager sign off on portal.

So w\c 4th and 11th I have been paid but they have deducted tax and NI on both payments , on the first payment raised this with my agency guy who did the initial hiring etc he claims this is a fault on their CRM system having me down as inside, apparently being dealt with and will be resolved by next week with a guaranteed repayment of taxes on the next payroll. The outstanding payments total around £900 so far. These payments are being made into my Ltd account.
This is the first time the client has taken on a contractor on site and the agent has made it clear it took two years to land the client and so the agency is trying to keep me onside with a call everyday to make sure everything is fine! I have made it clear that I will be walking next week if this keeps occurring as I will deem it inside and the agency have just lied to get me through the door.
Ironically it is a financial services business so I am still being processed for BPSS and clearance so the last thing I need is payment issues being raised.

Doing some digging on the agency I have located a handful of Google reviews dating back to 2018 with contractors stating similar issues such as not being paid the amount agreed and one person stating that the payments were continually incorrect over a thirteen week period something I will not be waiting on to find out.

The client manager has been away on annual leave for the last fortnight so is unaware of the payment situation for now.

[northernladuk]

Have you been issued with an SDS or is the only evidence you have it is outside is in the contract? Switch from inside to outside at the last moment sounds very suss and if you are the first contract I very doubt the client understands the new rules very well.

[eek]

Have you received an SDS determination saying you are outside?

If you haven't then chances are the agency is lying to you and the contract has always been inside - the fact it's financial services tells me that it is definitely inside.

If being outside is so important I would be walking away today and not next week...

[jayjay69]

Thanks for the responses...
No SDS just on the contract itself.
I have to agree that I am suspecting this is suss and the agency are trying to wing it in the hope I will still stay on. The reason for giving another week is to see if these supposed tax payments and correct day rate payment (not taxed) will be evident in the payroll run which I can confirm on Friday.
I was prepared for a little teething problems as is the case when starting a new contract but four weeks in still having to chase up a payroll issue tells me the agency runs it like that. The payroll is run from another subsidiary of the actual agency and as mentioned this has been reported in reviews about missed and incorrect payments in the past.

[northernladuk]

Thanks for the responses...
No SDS just on the contract itself.
I have to agree that I am suspecting this is suss and the agency are trying to wing it in the hope I will still stay on. The reason for giving another week is to see if these supposed tax payments and correct day rate payment (not taxed) will be evident in the payroll run which I can confirm on Friday.
I was prepared for a little teething problems as is the case when starting a new contract but four weeks in still having to chase up a payroll issue tells me the agency runs it like that. The payroll is run from another subsidiary of the actual agency and as mentioned this has been reported in reviews about missed and incorrect payments in the past.

You really must insist on an SDS before you start. Having it in the contract is pointless nowadays.

Legally you must have an SDS issued before first payment so if you've been paid and no received one someone is breaking the law. I'd push the agent and ask them where it is and why one has not been issued.

[jayjay69]

Have you received an SDS determination saying you are outside?

If you haven't then chances are the agency is lying to you and the contract has always been inside - the fact it's financial services tells me that it is definitely inside.

If being outside is so important I would be walking away today and not next week...

Having been switched to inside for the last contract part way through I was pleased to have the outside option for this new one. The contract is guaranteed until June next year as the site is having an overhaul so plenty of project work. Currently there is only one permie in IT and he has been running this site for the last couple of years so he can concentrate on support while I can work on projects.

[jayjay69]

You really must insist on an SDS before you start. Having it in the contract is pointless nowadays.

Legally you must have an SDS issued before first payment so if you've been paid and no received one someone is breaking the law. I'd push the agent and ask them where it is and why one has not been issued.

Thanks!
Agent literally spoke to me on the phone the week before to state outside but no mention of SDS and then got the contract pushed over, that's raised a flag now.
Looks like a case of get the contractor through the door and worry about the legal stuff later.
Annoying when you assume that they should be aware of this or in reality not too fussed as long as the end client is happy...

[northernladuk]

Having been switched to inside for the last contract part way through I was pleased to have the outside option for this new one.

You realise by switching inside you will be seen as being inside from the time you start, potentially opening yourself to retrospective action to claw the tax HMRC thinks you owe for the period you thought you were outside?

The contract is guaranteed until June next year as the site is having an overhaul so plenty of project work.

Outside contracts cannot be guaranteed. That smacks of MoO which you cannot have in an outside contract.

Currently there is only one permie in IT and he has been running this site for the last couple of years so he can concentrate on support while I can work on projects.

Which sounds like you are covering a perm role to me. If you are the only one it's going to be very difficult to not be under D&C and you are carrying out an enduring role which, it would be reasonable to think, any decent company would have a permie doing.

Not a chance the role you are in is outside.

Annoying when you assume that they should be aware of this or in reality not too fussed as long as the end client is happy

You are a business, it's your job to make sure you are covered, know the relevant legislation and remove any such assumptions from the process.

[eek]

Annoying when you assume that they should be aware of this or in reality not too fussed as long as the end client is happy...

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.

[jayjay69]

You realise by switching inside you will be seen as being inside from the time you start, potentially opening yourself to retrospective action to claw the tax HMRC thinks you owe for the period you thought you were outside?


Outside contracts cannot be guaranteed. That smacks of MoO which you cannot have in an outside contract.



Which sounds like you are covering a perm role to me. If you are the only one it's going to be very difficult to not be under D&C and you are carrying out an enduring role which, it would be reasonable to think, any decent company would have a permie doing.

Not a chance the role you are in is outside.



You are a business, it's your job to make sure you are covered, know the relevant legislation and remove any such assumptions from the process.

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...

Yep the contract states until June 2022...

Have to agree this is not looking like outside anytime soon and I am putting myself at risk by continuing to stay, in all honesty my agency contact sounds full of it and I am 100% sure that by the end of next week my supposed resolved payments will still be hit with Tax/NI or worse still not and I end up having to justify my status to HMRC further down the line......
What really P1$$es me off is the previous contract was WFH , pay was not brilliant but reasonable for inside and I had no additional costs such as travel etc , they wanted to extend but this one came along instead so kicked it back.
This is now paying more or less the same and I have a 90 min round trip each day so fuel costs on top plus wear and tear....

Time to leave....