IR35 and Renewal

[P40LVX]

Hi all, my current client has been very diligent in getting their house in order ahead of the IR35 legislation coming into place. The current role I am performaing is due for renewal now and we ran a determination together directed by myself, pre the legislation being live. The determination on the revised CEST tool confirmed the role outside IR35, to which they agreed. The renewal is due now and the client wants to extend the role to the end of Q2 2020. At this time no formal determination is being passed down by the client as the legislation doesn't happen until next year.

I am going to assume that the client will be running determinations formally some time in the new year (I'm waiting on feedback/confirmation on that) my concern is what if...What if something changes on determinations and the client deems the role inside mid contract?

My head is telling me to not renew to the end of Q2 2020, rather renew to the relevant date in this finical year to have the last payment made pre the new financial year, but that is/is that, dependant on when the client is running the formal determinations??

Am I worrying over nothing as the client (today) deems the role outside IR35 and nothing is going to change, so crack on and get the job done?

[malvolio]

I would aim to get a written (or email) confirmation of the status of the contract and a parallel assertion that the Ts&Cs of the engagement aren't going to change. If CEST says your're outside then you are (unless HMRC disagrees with it on the basis that the answers were "adjusted" to achieve an outside result, in which case they need a court case to prove it).

Basically you look to be safely on the right side of the fence. If you renew, don't allow any changes to the existing contract other than a new schedule for the extended period, then there should be no comeback.

[Amanensia]

If your client agrees in good faith that you are outside, and assuming you want to stay there, I'd go ahead and renew but just make sure the client is aware that this is conditional on your IR35 status being formally confirmed - ie don't just spring that bit of info on them at the end of February! I'd then wait until everyone's settled back in around mid-January and if you haven't heard anything further by then start reminding them that you need a formal status determination.

Don't forget it's not when payment accrues that matters, it's when payment is made - so if you bill monthly and are paid four weeks in arrears you need it sorted out by the end of February...

[nico]

If your client agrees in good faith that you are outside, and assuming you want to stay there, I'd go ahead and renew but just make sure the client is aware that this is conditional on your IR35 status being formally confirmed - ie don't just spring that bit of info on them at the end of February! I'd then wait until everyone's settled back in around mid-January and if you haven't heard anything further by then start reminding them that you need a formal status determination.

Don't forget it's not when payment accrues that matters, it's when payment is made - so if you bill monthly and are paid four weeks in arrears you need it sorted out by the end of February...

Hello All

I've heard this mentioned before - that payment must be made prior to 5th April. I have a contract extension coming up until 31st March 2019 and the agencies payment cycle is 4 weeks in arrears - which would mean even though my final invoice is in March, I will get paid at the end of April 2020 - not good.

Can someone send a link for where this is actually down as law - basically, just trying to find out if this is accurate accepted without proof.

Thanks !

[Amanensia]

There is no law yet as the legislation is expected in the Finance Act accompanying the Budget, which has been delayed for obvious reasons.

I agree that it seems odd that the new rules apply based on payment date rather than date of work. However it is true. This is what happened in the Public Sector in 2017, and a quick Google will give any number of confirmatory results. I link a couple below as examples.

Example 1 - see second paragraph under "The Private Sector Change"

Example 2 - see first bullet point

[cojak]

[/B]

Hello All

I've heard this mentioned before - that payment must be made prior to 5th April. I have a contract extension coming up until 31st March 2019 and the agencies payment cycle is 4 weeks in arrears - which would mean even though my final invoice is in March, I will get paid at the end of April 2020 - not good.

Can someone send a link for where this is actually down as law - basically, just trying to find out if this is accurate accepted without proof.

Thanks !

Read this - it’s in there under Private Sector Clients.

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

[Amanensia]

Read this - it’s in there under Private Sector Clients.

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

Annoyingly, nowhere (that I can see) on the official .gov.uk site does it explicitly state that the determining factor is the date a payment is made, rather than the time period over which the work leading to that payment was performed. That's why I didn't link to it. However there is sufficient third-party commentary as well as the history of how things worked in the Public Sector to make it clear that it's the payment date that matters.

[JohntheBike]

Annoyingly, nowhere (that I can see) on the official .gov.uk site does it explicitly state that the determining factor is the date a payment is made, rather than the time period over which the work leading to that payment was performed. That's why I didn't link to it. However there is sufficient third-party commentary as well as the history of how things worked in the Public Sector to make it clear that it's the payment date that matters.

It would be interesting to know if anyone in the public sector challenged this either successfully or unsuccessfully. However, I would guess that any such challenge would have been covered up given the political risks of it being broadcast.

[northernladuk]

It would be interesting to know if anyone in the public sector challenged this either successfully or unsuccessfully.

Challenged one payment in one event that won't happen again? Change the bloody record. Agencies made a big deal of paying everyone before the date so it was a non issue.

However, I would guess that any such challenge would have been covered up given the political risks of it being broadcast.

Absolute rubbish. Typical JTB tosh.

[nico]

Challenged one payment in one event that won't happen again? Change the bloody record. Agencies made a big deal of paying everyone before the date so it was a non issue.


Absolute rubbish. Typical JTB tosh.

Extremely helpful responses. I know where I am working, there seems to be a lack of understanding regarding invoicing prior to the 5th April and being paid after this date. One thought did come to mind, the "being caught" if the above occurs. Surely, it would (should?) be the company/agency who gets caught and has to pay the difference. Or is this more that if you're deemed inside, HMRC will then go for the retrospective investigations and deem you were Inside previously ?