Late IR35 status determination

[eek]

I have doubts the tax burden can be shifted onto the "worker", even if you have been given anecdotal advice from HMRC, it has not been legally tested. Some clauses simply cannot be exercised, e.g. you can't sell yourself into slavery even if it's your kink and you signed a contract.

The contract is a business to business contract which has a very different legal viewpoint to consumer law.

1 simple example

In a business to business contract it is assumed that both parties have taken appropriate legal advice before signing the contract

In a consumer to business contract it is assumed that the consumer will not have taken external advice which places additional responsibility on the business.

Given that you are rabbiting on about things such as slavery I can only assume you haven't the first clue about what you are talking about....

As a thought experiment, if it can be passed to the "worker" by virtue of a "claw-back" clause, then companies with IR35 determination responsibilities could use agency layering to continually get out of the spirit of the most recent IR35 obligations - sell as outside, and retrospectively change determination.

Um that's what the new version of the law is designed to allow. Both me and JamesBrown picked up on that immediately - the change so that determinations aren't set in stone until the end client pays the first bill was added to allow just the thing you dislike (and was done so quietly we only picked up on it when HMRC mentioned it in passing during one of the training courses for agencies.

If tested in a court of law I can't see this happening, by all accounts the OP did their due diligence with IR35 reviews and you'd hope the law would see such clauses do not allow the real end client to skirt their legal obligation.

Courts aren't always sane - just look at any tax tribunal to see results that don't smell right but favour HMRC....

[jamesbrown]

Restitution against an employee is actually pretty common. If a company makes a mistake with their tax deductions, the employee will end up paying the taxes owed as the company has the right of restitution over PAYE and primary NIC levied on the employee. That is established in recent case law (McCarthy v McCarthy & Stone plc). In principle, this being a deemed payment to a worker, rather than a payment to an employee, should not make any difference that I'm aware of, but it is hard to be certain about it and having watertight contractual clauses that clarify this right of restitution makes it more likely to work.

If you search for legal opinions, you will find that there is a good chance that these clawblack clauses will work. When you sign a contract that contains them (ill-advised), I would assume they work. Even if they don't contain them, there may still be a problem - certainly it's HMRC's view that the worker should be pursued (as eek noted above).

[ensignia]

Are there any cases of claw-back clauses for IR35 actually being upheld?

What do you think?

Just like HMRC was coming after everyone who switched from Outside to Inside a few years ago.

They're just biding their time, you see. Give it a few years.

[TheGreenBastard]

What do you think?

Just like HMRC was coming after everyone who switched from Outside to Inside a few years ago.

They're just biding their time, you see. Give it a few years.

I suspect you're being sarcastic; I think I'd agree if I'm interpreting you correctly - I'd fancy a chance of litigating myself out of this, immediately cease engaging the client at a financially opportune moment.

[PerfectStorm]

I have a similar situation. Working on an offer that is very Outside in terms of the contract - even says so in the schedule, off payroll rules don't apply, outside IR35. Has passed an external review with flying colours, BUT I don't have an SDS. I've asked for one before signing.

What are people doing in such situations? They've not said anything like "it'll come when you've started" but...

[TheGreenBastard]

It's quite obvious you demand one.

[Lance]

It's quite obvious you demand one.

thing is they could give you one, and still change it before the first payment from client to agent.

[PerfectStorm]

It's quite obvious you demand one.

And I am doing. It's just annoying and some of the language seems to suggest it being done on working practises after starting (they haven't quite said that, but some of the language hints at it).

People that have started new Outside contracts after the rules change - were you given SDSs before you started, or after?

[TheGreenBastard]

thing is they could give you one, and still change it before the first payment from client to agent.

And you could dispute it. I wouldn't want to be a client in that position.

[jamesbrown]

And you could dispute it. I wouldn't want to be a client in that position.

How, exactly? Using the client-led status disagreement process?