What are the risks if an agency "amends" the IR35 status

[jonnieboy]

So, I have been notified by my agency in writing that, after consultation with the final PS end-client that we are considered off-payrole and outside the new legislation

I am concerned, however... now that this decision has been communicated, how easy would it be for the agency/end-client to slyly modify the POV? I am sure they have performed all the due diligence they need to but have a slight, lingering concern...

[Andy Hallett]

The determination can change, if the role evolves, although you would have to be notified as it changes the basis of your agreement.

[northernladuk]

Don't forget it is possible for the contractor to put themselves inside as many permatractors will by playing tick box IR35. You still need to know enough about IR35 to keep yourself outside regardless of what determinations and promises you are given.

[jamesbrown]

I'd be curious to know whether this is the same agent that PC is using, because the latter that PC posted was a mess (I don't recall whether he posted it here or over at IPSE or both). It seemed to conflate whether the services were within scope and whether they were outside IR35 by talking about "off payroll" as though that meant something w/r to IR35. I wouldn't necessarily take this at face value. I'd want to see evidence from the PSB that: 1) the services are designated as outside of the scope of the new PS rules OR; 2) they are within scope but outside of IR35. Otherwise, the agent may be playing for time.

[teapot418]

So, I have been notified by my agency in writing that, after consultation with the final PS end-client that we are considered off-payrole and outside the new legislation

Outside the new legislation? As in not in scope? Or that a determination has been made and you're not subject to IR35?

[jamesbrown]

Outside the new legislation? As in not in scope? Or that a determination has been made and you're not subject to IR35?

Exactly. Woolly phrasing, and I wouldn't trust it at face value. I know the fee payer is ultimately liable, but some agents will be playing for time. I'd want something concrete from the PSB to the agency.

[jonnieboy]

Outside the new legislation? As in not in scope? Or that a determination has been made and you're not subject to IR35?

The latter.

The exact text of the notification was:-

"Following the communications sent to your Personal Service Company on 24/02/2017 explaining the way in which reforms to IR35 will affect workers who engage through a PSC on assignments where your services are delivered to a Public Sector end-user organisation, we wrote to each end-user client whose responsibility it is to determine the IR35 status of each assignment.

Based on the client’s assessment against HMRC criteria and information that you may have been asked to provide, your assignment through your Personal Service Company (PSC) with the organisation you have been assigned to, has been determined as ‘Off-Payroll’ under IR35 therefore not taxable under the reform to the legislation.

As the company that makes payments to your PSC, under the new IR35 rules, we will continue to make a payment to your PSC for the full amount within your invoice, subject to verified timesheets, in line with our contractual agreement."

[RonBW]

The latter.

The exact text of the notification was:-

"Following the communications sent to your Personal Service Company on 24/02/2017 explaining the way in which reforms to IR35 will affect workers who engage through a PSC on assignments where your services are delivered to a Public Sector end-user organisation, we wrote to each end-user client whose responsibility it is to determine the IR35 status of each assignment.

Based on the client’s assessment against HMRC criteria and information that you may have been asked to provide, your assignment through your Personal Service Company (PSC) with the organisation you have been assigned to, has been determined as ‘Off-Payroll’ under IR35 therefore not taxable under the reform to the legislation.

As the company that makes payments to your PSC, under the new IR35 rules, we will continue to make a payment to your PSC for the full amount within your invoice, subject to verified timesheets, in line with our contractual agreement."

"has been determined as ‘Off-Payroll’ under IR35" - of course it's off payroll. That's why you go through an agency and an intermediary. That's what off payroll means. But what does "under IR35" mean? Inside IR35 and a disguised employee, or outside IR35 and you aren't?

I'd want something in the contract, preferably signed in blood, that says:

1) The client has performed an assessment
2) The client has determined that the role is outside IR35
3) As the payer, the agency is liable for any PAYE or NI due if the role is found to be inside IR35
4) The agency does not have any right to make any deductions from your invoice value

Since that's what the email says, they will have no problem with including that in the contract for you.

[LondonManc]

I'd be wary of anything until they've run it through the tool.

The first thing I'd be keen to get to cover your rear is a confirmation of working practices to support the determination.

[teapot418]

" ...has been determined as ‘Off-Payroll’ under IR35 therefore not taxable under the reform to the legislation." is balderdash.

You want wording to the effect of:

"The client has performed an assessment of your contract and working practices and has determined that the Intermediaries Legislation (known as IR35) does not apply to this engagement."