Decisions, Decisions...

**Patrick@Intouch** · 29 October 2019, 09:47

It is your responsibility to determine your status until 5 April next year. The draft legislation will not apply until that date has passed and any payments made to PSC's from 6 April 2020 will be subject to the (currently draft) new legislation with end clients/hirers being responsible for having determined the status of engagements from 6 April 2020.

If you are being asked to extend into January, February or even March next year (and will be paid before 6 April 2020) then it is still up to you to decide whether you operate inside or outside IR35.

**Big Blue Plymouth** · 29 October 2019, 09:54

Originally posted by Patrick@Intouch View Post

It is your responsibility to determine your status until 5 April next year. The draft legislation will not apply until that date has passed and any payments made to PSC's from 6 April 2020 will be subject to the (currently draft) new legislation with end clients/hirers being responsible for having determined the status of engagements from 6 April 2020.

If you are being asked to extend into January, February or even March next year (and will be paid before 6 April 2020) then it is still up to you to decide whether you operate inside or outside IR35.

The IR35 Planning for April sticky seems to contradict that:

Basically, if you think that your client is going to decide that you are inside IR35, you need to consider whether to leave that client:

BEFORE 31st December 2019 (or you client's assessment date)...

**Paralytic** · 29 October 2019, 10:09

Originally posted by Patrick@Intouch View Post

It is your responsibility to determine your status until 5 April next year. The draft legislation will not apply until that date has passed and any payments made to PSC's from 6 April 2020 will be subject to the (currently draft) new legislation with end clients/hirers being responsible for having determined the status of engagements from 6 April 2020.

If you are being asked to extend into January, February or even March next year (and will be paid before 6 April 2020) then it is still up to you to decide whether you operate inside or outside IR35.

Are you sure?

April 2020 changes to off-payroll working for clients - GOV.UK

A status determination statement issued before 6 April 2020 is valid under the new rules, if it contains the reasons for the conclusion reached.

To me, this reads that if the client makes a formal determination prior to April 2020, then the contractor is caught. What is not clear to me is whether, from that date, the fee payer has to withhold taxes, or whether the contractor should effectively self-declare as inside and pay the taxes.

I'd certainly not be comfortable self-declaring as outside before April 2020 if the client has formally determined me inside before that date.

Of course, the actual legislation itself may say something different...

**WordIsBond** · 29 October 2019, 10:19

1. Ideal would be if you can get them to agree to not assess you since the role ends the end of January, and there is no legal obligation to do so.
2. In fact, you could make the case that it is an inappropriate intrusion into your tax affairs for them to assess a role that is out of scope of any legislative requirements placed upon them.

Failing that, can you get the PM to put in writing for you that they are planning a blanket 'inside' with no exceptions? If so, then you can argue that the determination has no force, it was a policy decision rather than an honest evaluation. He almost certainly won't give you that statement, but if you can get it, or you have someone else who has been told the same who would be willing to say so in writing, then I'd say you'd have a good chance of arguing that the determination is irrelevant. All that is assuming that you really legitimately are outside and not taking the mic.

If you stay, you're only putting five months total at risk, right? The past three plus two more. No one knows, of course, but I think they'll have a lot of easy targets and your older contracts aren't likely to be easy targets compared to a lot of people they'll be going after. I don't even think your five months there are as easy as a lot of others, because all they'll have is a determination that has no legal force and probably won't even be reported to them because of that. Chances are that determination only comes into play if they investigate you and go to the client, and I'm guessing you aren't going to be high on their list of investigation targets.

But, if they do investigate you, they would almost certainly ask the client if they'd made a determination on that contract in preparation for 'reform'. And if the client does do an inside determination, they'd try to use it against you, even though it won't have legal force. So, there's some risk indeed.

If I were in the situation I'd be of the view that the risk is small enough that I wouldn't be too concerned. I'd want insurance. I'd certainly try to get them to not do a determination and tell them you won't be extending again and it is inappropriate and a violation of your rights and privacy for them to be prying into your company's, and your, tax status without legislative warrant to do so.

**Patrick@Intouch** · 29 October 2019, 10:21

There is a lot of different advice being shared at the moment but in terms of the legislation, it is absolutely still the responsibility of the individual contractor to assess their status and apply the resulting, correct tax treatment until 6 April 2020 when that responsibility shifts to end hirers.

All contractors should take independent professional advice to help them assess their status adequately and then continue to make that decision for themselves until such time as it stops being their responsibility.

IF in the meantime, an end hirer expresses their opinion that they are likely to assess an engagement as being inside IR35 then that opinion is only relevant if that engagement spans 6 April 2020. If that decision is part of a low effort blanket determination then it is safe to assume that, that end hirer hasn't taken reasonable care and is leaving themselves open to challenge.

The legislation is currently in draft format and cannot be used to support an end hirer making a determination on which HMRC can base a tax status case.

**WordIsBond** · 29 October 2019, 10:23

Originally posted by Paralytic View Post

To me, this reads that if the client makes a formal determination prior to April 2020, then the contractor is caught.

I doubt that is what they are trying to say. I suspect they are trying to say that the determination is valid and takes effect in April even if it is made before then, clients don't have to wait until the last minute to make determinations.

That doesn't mean HMRC wouldn't try to use an earlier one for an earlier contract, or for the same contracts on dates before April. I'm sure they would try to use it as evidence, but it can't have any legal force until legislation gives it that.

Originally posted by Paralytic View Post

I'd certainly not be comfortable self-declaring as outside before April 2020 if the client has formally determined me inside before that date.

That's another question, and is a matter of risk tolerance rather than legal requirement.

**Lockhouse** · 29 October 2019, 11:11

For me it'd be outside or umbrells at client's insistence. This negates the outside then inside conundrum (at least in my opinion).

**sal** · 29 October 2019, 11:27

If your problem is with the moral dilemma of having to ditch your Client in the middle of a contract. Perhaps discussing it it advance with the Programme manager and making him aware of your intentions to terminate the contract if they decide to force an inside determination on the existing contract prior to April 2020 could ease your conscious.

I'm in a similar boat - ClentCo haven't made their mind, but the project is on it's last legs, so I haven't pushed for a decision, was prepared to go at the end of November. Last week the project manager asked me to stay for another 3 months to deal with cleanup and documentation, which would bring me to the end of Feb with 1 week payment term of monthly invoices, which is perfect.

Good rate, relaxed environment, 20min from home, how could I refuse...

**BoredBloke** · 29 October 2019, 11:50

Surely it's the 6th April that is the important thing here. The client can say they thing the role prior to 6th April is inside, but up until 6th April, that's just their opinion - especially if it is a blanket assessment. If you ask HMRC they will say it is inside also, because that's their opinion. So long as you have something which states that the contract has been reviewed as outside and that is backed by insurance, then surely that's all that matters. Unfortunately after 6th April it's the clients view that wins

Decisions, Decisions...