HMRC announces change to the off-payroll working rules

[jamesbrown]

I think this change is actually more impactful than it is being perceived as. We (Agency) were working through every contract - bearing in mind each contract has a different notice and pay period to work out when we had to be sorted by. We'd set a deadline of 28th Feb but were dealing with tons of special cases, we were working out how to ensure timesheets were paid prior and what legal rights we had if we had a valid timesheet after but the rate was based on outside and the SDS was now inside and so on and so forth.

This change has meant the deadline is the same for everyone, no issues with early payroll, outstanding timesheets. The only issue I can foresee (other than those that come with the legislation regardless of implementation) are the capacity of umbrellas if last minute SDS come in and lots of contractors want to switch.

The timing is the most common conversation I was having for the past month or so, it's clear that it's been heard by HMRC and it made me wonder if perhaps there may be something from the review - not a wholesale delay but tinkering around the edges.

It probably seems more impactful to you because you are working with clients who actually care (that's why they are working with you), whereas most large clients (at least in some sectors) are taking a zero-risk approach.

[WordIsBond]

what is your perception of what will happen about contracts which continue after April and which started prior to April? Is there any substance in the report that these contracts won't be subject to the new rules?

You're out of your mind if you think there's anything to that.

Clients would simply agree 3 year contracts (with no notice clauses, of course) with all their contractors, beginning 1 April. That would let them kick the can 3 years down the road for all existing projects. No way HMRC will agree to that.

[JohntheBike]

You're out of your mind if you think there's anything to that.

Clients would simply agree 3 year contracts (with no notice clauses, of course) with all their contractors, beginning 1 April. That would let them kick the can 3 years down the road for all existing projects. No way HMRC will agree to that.

you are probably right. But they'd have to stop this prior to April 6th. However, I guess there will be further "clarification" or backtracking of the rules before then.

[Lance]

you are probably right. But they'd have to stop this prior to April 6th. However, I guess there will be further "clarification" or backtracking of the rules before then.

KUATB. There won't be any tweaks. There won't be any backtracking. There is a draft bill. Which will either become law as-is, or if there are any changes they won't be complex, they'll be "rip that section out".
Bear in mind that they are working an a final bill, that matches the budget speech, for which they have very little time.....

March 11th is budget day. They they have 3 weeks to get finance bill passed through both houses.

One thing is for sure. There’s not enough time for radical changes to the draft bill.

[JohntheBike]

KUATB. There won't be any tweaks. There won't be any backtracking. There is a draft bill. Which will either become law as-is, or if there are any changes they won't be complex, they'll be "rip that section out".
Bear in mind that they are working an a final bill, that matches the budget speech, for which they have very little time.....

what I was suggesting is that this apparent proposal which seems to indicate that contracts entered into prior to April which run past April, will not be subject to the rules, is likely to be "clarified" or removed, if HMRC realise that it could be used as a loop hole. My contract is up for renewal on the 1st of April for example and I would seek to use it if necessary, if it were still in force.

[Lance]

what I was suggesting is that this apparent proposal which seems to indicate that contracts entered into prior to April which run past April, will not be subject to the rules, is likely to be "clarified" or removed, if HMRC realise that it could be used as a loop hole. My contract is up for renewal on the 1st of April for example and I would seek to use it if necessary, if it were still in force.

There is no such proposal. Stop reading everything on the internet as though it's true.

The draft bill has simply shifted the effect of the legislation to be against work done on or after 6th April rather than for payments due on or after the 6th April.

[Paralytic]

There is no such proposal. Stop reading everything on the internet as though it's true.

The draft bill has simply shifted the effect of the legislation to be against work done on or after 6th April rather than for payments due on or after the 6th April.

This. Anyone who is reading HMRCs latest update to mean that IR35 won't apply to the entirety of any contract started before the new tax year needs to attend a training course in basic English comprehension.

It's clear it is applying to all services provided in the new tax year.

[eatenrifles]

This. Anyone who is reading HMRCs latest update to mean that the IR35 won't apply to the entirety of any contract started before the new tax year need to attend a training course in basic English comprehension.

It's clear it is applying to all services provided in the new tax year.

A contractor colleague of mine has just been advised by his accountant to send this to his agency:

In regard to last week’s reprieve from the Government, in that the new rules will only apply to contracts starting after 6th April 2020 can you confirm whether there is any appetite to issue a contract starting on or before 5th April for 6 months which could then be outside the new rules for a further 6 months. This would take contracts past this years’ budget date when further clarification on the new IR35 rules and their implementation.

The spread of misinformation is getting out of hand.

[WordIsBond]

A contractor colleague of mine has just been advised by his accountant to send this to his agency:

Time to get an accountant that doesn't take everything at face value that he reads in Accountancy Daily.

But really, it's not entirely his accountant's fault. It's the fault of the people who are inflicting massive upheaval on an industry without even having legislated the upheaval, less than two months before it all blows up.

This 'reform' is half-witted and half-baked, but if it really had to happen, the legislation for it should have been passed into law by November at the latest, so that accountants would have plenty of time to figure it out.

When the political situation blew up and the budget had to be delayed, this should have been delayed as well. They COULD have simply delayed it six months, they wouldn't even have to wait an entire year, so that preparations could be made with actual legislation in place.

[eek]

Time to get an accountant that doesn't take everything at face value that he reads in Accountancy Daily.

But really, it's not entirely his accountant's fault. It's the fault of the people who are inflicting massive upheaval on an industry without even having legislated the upheaval, less than two months before it all blows up.

This 'reform' is half-witted and half-baked, but if it really had to happen, the legislation for it should have been passed into law by November at the latest, so that accountants would have plenty of time to figure it out.

When the political situation blew up and the budget had to be delayed, this should have been delayed as well. They COULD have simply delayed it six months, they wouldn't even have to wait an entire year, so that preparations could be made with actual legislation in place.

It makes sense for the change to occur at the beginning of the tax year.

Can you imagine the scare stories and untruths we would be seeing if the implementation date was November rather than April.

And while I know it's all going to hell in a handcart at least the experiment will finish soon and a suitable fix rapidly identified for those that need it.