Stupid Question - Outside Roles

[eek]

A case would have HMRC involvement without doubt, if there is legislation regarding SDS issuing and a meager "claw-back clause" undermining it.

Think about it in the context of business tax capture, you can't litigate yourself out of obligations, no matter what clause you put in a B2B contract.

Why would it have HMRC's involvement.

HMRC or the end client has decided the contract is inside IR35.

All that is left is for the appropriate tax to be paid. And that depends on whether the £10,000 the contractor received per a month is the before or after tax figure.

With a clawback clause successfully implemented and the money recovered by the agency that £10,000 (times x months) is the pre tax figure.

if the money is not recovered by the agency - that £10,000 (times x months) is the post tax income and the agency needs to find the tax on that £10,000 (times x months) from within it's resources...

HMRC really don't care where the tax is coming from nor how much they receive they just want their money (oh and penalties on top).

[northernladuk]

HMRC really don't care where the tax is coming from nor how much they receive they just want their money (oh and penalties on top).

And interest....

[hugebrain]

Go and read the full thread...

You read it. It says that the agency can deduct money if they are liable. But in this case it’s not the agency that are liable it’s someone further up the chain.

Anyway I’m not sure if these clauses are enforceable. Mine, for example, says I have to pay for any losses the agency suffer from IR35. Since the agency may well have hundreds or thousands of contractors working for them and the clause isn’t specific to my company, I could be on the hook for many millions of pounds. I’m not losing any sleep over it.

[eek]

Liable can be contractually as well as / instead of legally responsible

And note the incentive to pass things back to the contractor - the amount of tax paid is half what would otherwise be the case AND no-one else in the chain is paying a penny of it.

[PerfectStorm]

What would happen if a client is a 'small company' AND provides a SDS showing outside? If size of company is king, does it invalidate their own SDS leaving the contractor to have the liability?

[eek]

What would happen if a client is a 'small company' AND provides a SDS showing outside? If size of company is king, does it invalidate their own SDS leaving the contractor to have the liability?

Small Company (including the final end client if there is a consultancy involved) means you follow the old Chapter 8 rules rather than the new Chapter 10 rules.