HMRC decision tool: doubts about the selected answers, results, implications, ...

[jamesbrown]

would the risk (fine/extra taxes) go to me personally or to the client/agency

The liability rests with the fee payer, subject to certain conditions (about providing fraudulent information and when the PSB doesn't respond promptly with a determination). Bottom line, if they're saying you're outside based on the ESS, the liability is no longer yours (or, more correctly, YourCo's).

[WordIsBond]

From my playing around with it, I think this answer is strongly weighted, and appropriately so:

* worker will have to put right his output, at his own cost outside usual hours

That is a strong indicator against employment. Employees don't have to do that, and it suggests that OP is at significant financial risk. The weighting they are giving this question does have basis in case law.

Also, there is some SDC in the OP's case, but it is not particularly strong. Yes, they can change your tasks, but they cannot decide how to do the work and you have some say over when and where. SDC is not a slam-dunk for employment, and that, combined with the responsibility to put work right at your own cost, is probably what gets the outside determination. Change that last answer and you'd be inside, almost certainly.

[WordIsBond]

For one thing you shouldn't really be trying different answers until you get the result you want.

Why not? I'll be signing at least two, hopefully three contracts in the next three months. I want to make sure I get them written in a way that I can have a clear outside determination from this tool, even if HMRC tries to dispute substitution or something else. I want to know how this tool works and structure my contract and working practices accordingly, and quit worrying about IR35 insurance.

So what's wrong with that? Shouldn't the law be clear so you can sure you are on the right side of it? Sure, we don't expect something invented by Gordon Brown to be clear, and apparently the Tories are too worthless to provide real clarity, either, but this tool is the best shot at clarity we've had since the mess came in, unless you count the BET as better. We should all be using it.

[teapot418]

* worker cannot claim other expenses only

The wording is:

Other expenses – including significant travel and subsistence expenses (not including commuting) or the cost of a business premises outside of the home

What expenses are you incurring? It's an interesting one - if IR35 caught, you cannot claim T&S for the place of work of your contract, even if it is away from home. This is one of the big problems. So do T&S include the place of work of the contract? What is commuting? If I live in London and take a contract in Glasgow, is that commuting?

[jamesbrown]

From my playing around with it, I think this answer is strongly weighted, and appropriately so:

* worker will have to put right his output, at his own cost outside usual hours

That is a strong indicator against employment. Employees don't have to do that, and it suggests that OP is at significant financial risk. The weighting they are giving this question does have basis in case law.

It isn't given a very high weighting insofar as you can have the strongest possible lack of D&C (absent the "how" component because the work is "highly skilled"), and the answer to this question won't make any difference (leads to an undetermined result), whereas the answer to the expenses question shifts it from being undetermined to outside.

Also, I'd dispute what you say about lack of D&C for the OP. If the client "can change tasks without asking contractor", that's a ridiculous degree of D&C that would massively count against a contractor in a real tribunal, yet it makes bugger all difference in the ESS.

I'll say it again, the ESS is completely wonky on D&C w/r to case law, and I'm not the only one saying this...

[malvolio]

From my playing around with it, I think this answer is strongly weighted, and appropriately so:

* worker will have to put right his output, at his own cost outside usual hours

That is a strong indicator against employment. Employees don't have to do that, and it suggests that OP is at significant financial risk. The weighting they are giving this question does have basis in case law.

Also, there is some SDC in the OP's case, but it is not particularly strong. Yes, they can change your tasks, but they cannot decide how to do the work and you have some say over when and where. SDC is not a slam-dunk for employment, and that, combined with the responsibility to put work right at your own cost, is probably what gets the outside determination. Change that last answer and you'd be inside, almost certainly.

Yep, agreed, very much my own view.

[mickael28]

The liability rests with the fee payer, subject to certain conditions (about providing fraudulent information and when the PSB doesn't respond promptly with a determination). Bottom line, if they're saying you're outside based on the ESS, the liability is no longer yours (or, more correctly, YourCo's).

And what someone mentioned above as well, is there any need for an IR35 insurance now that they've created this ESS tool then? or if the responsability is not with us if the tool returns that we're outside?

And if it's not our responsability in this last contract, is there a risk in an investigation that when they go back in history (I guess they will do that when one gets investigated), they try to apply the same answers (as the roles were all similar but with different clients) in previous contracts for which our company would be them made liable? Because that's a big risk that I wouldn't like to take... if it's at all a possibility.

[jamesbrown]

And what someone mentioned above as well, is there any need for an IR35 insurance now that they've created this ESS tool then? or if the responsability is not with us if the tool returns that we're outside?

And if it's not our responsability in this last contract, is there a risk in an investigation that when they go back in history (I guess they will do that when one gets investigated), they try to apply the same answers (as the roles were all similar but with different clients) in previous contracts for which our company would be them made liable? Because that's a big risk that I wouldn't like to take... if it's at all a possibility.

It depends what you mean by "IR35 insurance". I'd recommend IPSE membership, for example. The new PS rules change nothing about historical contracts or, indeed, about the reality of IR35 for any contracts. All they do, for payments made after 5 April 2017, is to place the liability on the PSB to make a determination and on the fee payer when the PSB makes an incorrect determination (perhaps established years in the future). Anyone that moves from outside before 6 April to inside on 6 April, on the same contract, without a change in WP, is going to be at significant risk of investigation, and that investigation may consider all historical contracts. However, IR35 applies to each contract separately, so they cannot extrapolate between contracts using superficial similarities (and expect to win). They need to establish the facts in each case. Bottom line, make sure you have IPSE membership (for historical contracts among other things), but if the PSB determines that you're outside, the liability isn't with you going forward.

[jamesbrown]

Not sure if anyone watched Peston today, but Taylor was pushing the importance of control over other factors in determining employment status, implying that he'd make recommendations along these lines. Mildly amusing, given the low weighting in the ESS.

[mickael28]

Not sure if anyone watched Peston today, but Taylor was pushing the importance of control over other factors in determining employment status, implying that he'd make recommendations along these lines. Mildly amusing, given the low weighting in the ESS.

And he was making about making recommendations where/to whom? ie, could this ESS tool still change the result when answering the same questions at some point in the next few weeks?


And doubt about this question:

What does the worker have to provide for this engagement that they can't claim as an expense from the end client or an agency?
These are things that:

the worker has to provide to complete this specific engagement
aren't provided by the end client
could place the worker at financial risk if the cost isn’t regained
They don't include expenses incurred by being based away from home for the engagement.

=> Other expenses – including significant travel and subsistence expenses (not including commuting) or the cost of a business premises outside of the home

Do you guys know what they mean by 'Other expenses – including significant travel and subsistence expenses', what could that be?