Every single IT project manager at a bank ever

[NotAllThere]

It's the young generation that inherits this wold and now has to pay the dues and damage the previous did.

Like the younger generation would have done any different wrt IR35.

[GhostofTarbera]

What people forget is that when they provide a substitute it is up to them to get that substitute up to speed in their own time and money. You don't just send a new guy in on the Monday and all is well, that's not a substitute. The sub should be able to pick up the day after the contractor isn't available to some degree of competence. Often the term sub is banded about without people really thinking about how it should work.

I had ROS in all my banking contacts with the agents for past 10 years + as did most other contractors

No bank would have ever accepted a sub

i know of no one that ever managed or attempted to put in a sub into a bank

was just a big sham

[cannon999]

I am fully aware of the expense rule. I have always believed maybe incorrectly that staying at the same client for years and years makes you look like an employee.

Used be loads of contractors like this. Had their own desks, parking space etc. They acted like an employee. One of the reasons we are were we are.

Some ltd contractors in the past would be at a client for longer than a permie.

I am not sure what's wrong with that. If the client is paying top rate, why move?

[northernladuk]

Sounds scary. My contract is probably going to be running for many more years to come due to the amount of new work that always comes through (I am a software developer) but I can't quit a 600/d rate just because hypothetically someone might come for me in the future. My contract is very much outside of IR35 but I am starting to think that maybe I should use a substitute for a couple of days just to cover my own back.

You don't need to use one, you just need evidence that the clause is not a sham. Go through the motions of discussing it with them and as long as they go along with it then just store it as evidence. For example, discuss a made up situation where you percieve you will need a sub in 6 months due to a long family holiday. Engage them in the discussion about how it will pan out, explain you will train them up for 2 weeks before hand on your time and they can pick up from x day you plan on not being around. The client will go along with the discussion and at the point they say yeah that's fine, give us a heads up when this will happen then you are done.

You have all the evidence required the client was willing to take the sub without having to push the issue and actually do it and you are sorted. You just need some evidence that it's not a sham and that the client would have never accepted it. How better to do that than start the discussion with them and they go along with it.

You could also try a confirmation of arragements but they are fraught with issues so not silver bullet people think. Better than nothing but no than an email from the client discussing a potential sub situation.

[vetran]

Since April the client is liable for the tax if you status is wrong.
But just to be extra safe, always keep minimal reserves in the company. They cant get blood out of a stone.

IR35 results in personal taxation they would just make you personally bankrupt or garner your personal accounts.

[northernladuk]

Not sure how accurate this article is? It says from 2011 but the judgement lists longer. If it's really from 2007 to 2014 then 70k figure seems very low if it includes income tax.

It seems very low indeed. JLJ was on the hook for twice that for half the time. Maybe that figure is what they owe above and beyond what has been paid then.

[northernladuk]

Not seen the contract but it looks like he was there for more than 24 months.

As for the tax paid not paid, whole process with IR35 is nonsense.

Some of my old contracts, I would never have done was it not for being able to expense travel.

Hence why I am still on the bench. In the past I would have just worked away. not any more. Your loss Mr Sunak.

What does 24 months have to do with IR35? You are talking about expenses. There is no two year rule for IR35

[northernladuk]

Ok one of the issues we have with IR35
Contract length doesn’t determine IR35 status


For the avoidance of any doubt, there isn’t any one point in time at which an outside IR35 contract is automatically classed as inside the legislation – not after one, two or even twenty years.

But whilst status should be decided after standing back and focusing on the overall picture of the working engagement – from length of time to personal service and control – time spent engaged by the same client could play a part in HMRC taking the view that it could be classed as inside IR35.

As IT Contracting explains, this can even be the case if the contract is renewed – meaning that it’s technically a new engagement. HMRC’s Employment Status Manual states: “Where work is regularly offered and accepted over a period of time a continuous contract of employment may be created.”

But I always in the past never contracted for more than 24 months.

I've said this all along. People will say time has nothing to do with IR35 and they are wrong. It doesn't have anything to do with it if you are playging tickbox IR35. It's not one of the pillars or an automatic fail. BUT in every case thats gone forward time has been one of the major points of the case. Being there a long time causes people to lose track of their status and become part and parcel. JLJ lost part of his case on exactly this. He and the client got complacent and just fell in to a track which became inside. Looks like the same with this.

You can do 5 to 10 years on a client IF you play it by the book every single day from first to last. But that rarely happens. The client or the contractor get comfortable and forget so slip inside. The paperwork falls by the wayside, the working practices lose any meaning and bang, you are inside.

All that said, to limit contracts to 24 months to avoid IR35 is pretty naive at best. It shows you don't fully understand IR35 which is a red flag in itself. Done properly there is nothing wrong with long gigs and done badly even a three monther can go from inside to outside. There is not set time i.e. 24 months as you say, that keeps you on the right side of IR35.

[vetran]

You don't need to use one, you just need evidence that the clause is not a sham. Go through the motions of discussing it with them and as long as they go along with it then just store it as evidence. For example, discuss a made up situation where you percieve you will need a sub in 6 months due to a long family holiday. Engage them in the discussion about how it will pan out, explain you will train them up for 2 weeks before hand on your time and they can pick up from x day you plan on not being around. The client will go along with the discussion and at the point they say yeah that's fine, give us a heads up when this will happen then you are done.

You have all the evidence required the client was willing to take the sub without having to push the issue and actually do it and you are sorted. You just need some evidence that it's not a sham and that the client would have never accepted it. How better to do that than start the discussion with them and they go along with it.

You could also try a confirmation of arragements but they are fraught with issues so not silver bullet people think. Better than nothing but no than an email from the client discussing a potential sub situation.

You have proof the clause is not a sham it is in the contract you & the Agency both signed. The sooner people point out if they had no intention of obeying the contract the transfer of intellectual property, and NDA clauses in the contract are also void!

You were not party to the contract between the Agent & the client you can't be bound to it.

[jamesbrown]

Generally speaking, an agreement will be reached with HMRC about the tax owed else the tribunal judge can be asked to rule. In that case, the full PAYE/NI taxes and any penalties owed should be offset by any taxes paid (of any kind), but this becomes a bit tricky because some taxes, notably Corporation Tax, can only be refunded within a fixed period and IR35 cases tend to drag on for much longer. However, if a tribunal judge is asked to rule, then it should be taken into account... probably. Either way, YourCo is going to end up with a very large bill.