Working through the regulations

[TheFaQQer]

It might be a red flag to leave, but not nearly as much as staying in the same role and being outside one day and inside the next.

Leaving is only a red flag if the client contacts HMRC and says "this contractor left because we tried to pay them as inside IR35". Which might happen, but it might not - who knows what the client will do, how they would even communicate that to HMRC, and what HMRC would do in response to that data.

Staying in the same role and being outside one day and inside the next could be a red flag if HMRC have enough data to link the two together. If the contractor continues to work through the same agency then they have that data; if the contractor works through their PSC but changes agency then they do not have that data (they know what you were outside, now inside, but they do not know who the client is or what the work entails); if the contractor changes from PSC to umbrella then they do not have that data (they know that you were outside via an agency, now they know that you are PAYE somewhere - they don't know where, they don't know if you are public or private sector). As I have said before, it is possible that a link could be made, but whether HMRC could make that link is another question.

Given the changes that the OP has made, I'm not convinced that (s)he is at any more risk of an investigation than any contractor.

[TheFaQQer]

As for an appeal...what appeal? Who do you appeal to? I certainly have not seem any documented appeal process, and even if there was one it take time. What do you do during the months if not years of appeal? sit on the bench? or carry on knowing that they might refuse it?

The most obvious route of appeal is to either appeal under the AWR or to take the client to an employment tribunal to fight for worker or employee rights. As you say, those will take time and effort, and at the end of it you might lose. Even if you win and prove that you should not have had any tax or NI deducted, it is far from certain that NI could ever be refunded to you (IMHO, it couldn't).

In an ideal world, departments should have a quick, easy, fair and accurate appeals process that allows you to make your perfectly valid case that you are outside IR35 and should be treated that way. I'm not holding my breath for that process to appear from anywhere though.

[FrontEnder]

Sorry, but this is completely wrong and misguided. For starters I never bottled it...they made it worth my while; Financially I'm considerably better off inside than I was outside.

Getting a "new" outside contract, and carrying on, if anything, is screaming...I knew my contract was inside before.

My head is certainly now in the sand, which is exactly why I drew a line under the previous contract. As for an appeal...what appeal? Who do you appeal to? I certainly have not seem any documented appeal process, and even if there was one it take time. What do you do during the months if not years of appeal? sit on the bench? or carry on knowing that they might refuse it? I think drawing a line under the contract and creating a new inside working relationship IS the safest way to go forward.

I didn't mean a new contract with new terms, was thinking extension. Basically I'd insist they deem me outside or walk. Agree a whole new contract would be suspicious, but i dont think clarification on a couple of points or getting the client to acknowledge they are valid would hurt.

There probably isn't a documented apeal process because the whole thing has been an ill conceived mess and has been rushed in too quickly. They didn't even know it affected them until recently did they? There is a right to appeal though, according to other threads on here.

[Seahorse17]

Leaving is only a red flag if the client contacts HMRC and says "this contractor left because we tried to pay them as inside IR35". Which might happen, but it might not - who knows what the client will do, how they would even communicate that to HMRC, and what HMRC would do in response to that data.

Staying in the same role and being outside one day and inside the next could be a red flag if HMRC have enough data to link the two together. If the contractor continues to work through the same agency then they have that data; if the contractor works through their PSC but changes agency then they do not have that data (they know what you were outside, now inside, but they do not know who the client is or what the work entails); if the contractor changes from PSC to umbrella then they do not have that data (they know that you were outside via an agency, now they know that you are PAYE somewhere - they don't know where, they don't know if you are public or private sector). As I have said before, it is possible that a link could be made, but whether HMRC could make that link is another question.

Given the changes that the OP has made, I'm not convinced that (s)he is at any more risk of an investigation than any contractor.

I think it's unlikely. The PS has, for some time, been obliged to ensure that contractors are paying "the right amount of tax". They have accepted contract reviews and assessments from Abbey Tax, QDOS and the like as evidence. If they then say those contractors weren't paying the right amount of tax, they leave themselves open to fines for not having the correct assurance processes in place.