Assessed as Inside from April or a Blanket Ban - it's time to leave

[dsc]

My current client has deemed any future work post 6th April as inside IR35. On top of that they have banned future engagements with PSC's, too. The Agency allows only their 3 top umbrella's which on it self is extremely annoying. Anyway my current Outside IR35 contract will be terminated on the 3rd April. After that they offered me with a new contract for initially 3 month through Umbrella. I was able to negotiate an uplifted rate which give me after all tax a bit more than I have today (Employer NIC and AL will be paid on top of rate negotiated). I also ask to get the role title changed to fall into a different task area but that fell short from current Business Analyst to Technical Business Analyst (). I will try to push for a better option but even if I get that sorted I still feel not 100% comfortable because of the risk of being investigated.

I was wondering what you think of the above and appreciate any feedback. I am just looking for some other opinions as my agent is not helpful in that space.

Leaving completly is the safest option, but one that still doesn't guarantee anything (ie. you can still be investigated as always, but you are not automatically flagged up to HMRC). Did you get an SDS to say that you are inside or is your client simply not bothering with that and pushing everyone into PAYE / umbrella?

[ladymuck]

My current client has deemed any future work post 6th April as inside IR35. On top of that they have banned future engagements with PSC's, too. The Agency allows only their 3 top umbrella's which on it self is extremely annoying. Anyway my current Outside IR35 contract will be terminated on the 3rd April. After that they offered me with a new contract for initially 3 month through Umbrella. I was able to negotiate an uplifted rate which give me after all tax a bit more than I have today (Employer NIC and AL will be paid on top of rate negotiated). I also ask to get the role title changed to fall into a different task area but that fell short from current Business Analyst to Technical Business Analyst (). I will try to push for a better option but even if I get that sorted I still feel not 100% comfortable because of the risk of being investigated.

I was wondering what you think of the above and appreciate any feedback. I am just looking for some other opinions as my agent is not helpful in that space.

I wouldn't rely on a change of job title. I would be looking for completely different work and role.

[GerBACon]

It's a mess I hate it

My current client has deemed any future work post 6th April as inside IR35. On top of that they have banned future engagements with PSC's, too. The Agency allows only their 3 top umbrella's which on it self is extremely annoying. Anyway my current Outside IR35 contract will be terminated on the 3rd April. After that they offered me with a new contract for initially 3 month through Umbrella. I was able to negotiate an uplifted rate which give me after all tax a bit more than I have today (Employer NIC and AL will be paid on top of rate negotiated). I also ask to get the role title changed to fall into a different task area but that fell short from current Business Analyst to Technical Business Analyst (). I will try to push for a better option but even if I get that sorted I still feel not 100% comfortable because of the risk of being investigated.

I was wondering what you think of the above and appreciate any feedback. I am just looking for some other opinions as my agent is not helpful in that space.

[eek]

I dont know how they can fill that reporting without having my details.

Options are:-

1) They have them and you've forgotten
2) They aren't filling in the report so don't realise they need to legally do so and provide those details to HMRC.

We can't know which of those options is the valid one...

[min]

Ask your agency - they are the ones who should be filling in the Employment intermediaries reporting requirements which is what we know HMRC use to track this stuff.

I dont know how they can fill that reporting without having my details.

[eek]

My agency doesnt have my NIN, never asked for it. Nor for my DOB. They pay my LTD. My LTD pays me on PAYE. So there is no direct link between agency and myself. Is the above still valid?

Ask your agency - they are the ones who should be filling in the Employment intermediaries reporting requirements which is what we know HMRC use to track this stuff.

[min]

The agency is right, HMRC don’t care who their customers are just the contractors they pay.

and in March you will be on the agency report to HMRC with your NI number, your limited company details and a large sum on which little NI is paid
and I April you will be on the (same) agency report with the same NI number, a different company and a large NI payment.

To HMRC the end client doesn’t matter it’s the agency that ties everything together

My agency doesnt have my NIN, never asked for it. Nor for my DOB. They pay my LTD. My LTD pays me on PAYE. So there is no direct link between agency and myself. Is the above still valid?

[northernladuk]

So, don't derive any tax benefit when closing the Ltd. i.e. extract all remaining as taxable dividends and not disbursements? Surely they can't expect us to predict the future and 'know' somehow that we will want another Ltd in less than 2 years doing the same kind of thing?

I continue to be astonished at the lack of clarity in tax/corp laws. They give you a vague idea where the line is and warn you sternly that you'll get burnt if you get 'too close'... but don't tell you what 'too close' is. So, the closer you get the more risk you carry. Its like a perverse game of chicken.

Anyways... anyone gonna comment on the 'intermediary report' and relative risks of converting to umbrella/going permie?

B

It's not for them to advise us how to use their systems to create loopholes to use. It's there to shut something down they didn't like. The 2 year rule is to stop people were shutting their company, getting all the benefits and starting again. Clearly aggressive tax avoidance so they closed it. Bed and breakfast loans are another one that came under scrutiny.They didn't design either that rule or the offpayroll rules to dovetail, they never do. They are just rules to consider when messing out with company set ups just to suit tax situation rather than real business. Just is what it is. Bit of thought and forward planning should negate the risk really.

[eek]

Apologies if I have missed those, I have looked (promise). Also appreciate I am one of those newbies here, soz. I also appreciate that we're all pretty much clutching at straws (I am anyway), tho some appear to have bigger hands than others...

I guess I'm specifically interested in HOW our dear friends at HMRC might know that I was a contractor with my client and am now permanent with that client, as a trigger for an investigation.

So, distinction between trigger for an investigation, and what they might find out if they did start an investigation.

If they did investigate then they would find out, presumably. By looking at my contract and seeing the working location, clients name etc. The jig would be up, and I would be relying on the great care that my very good agency has put into the wording of my SOW contract (substitution etc).

My hypothesis though, is that HMRC will see me disappear off their 'intermediary report' and appear as an employee of some other company. No alarm bells.

Compare this to staying on their report and going from an A-D to an F, with the same agency. Was outside, now inside. Mmmm, juicy.

My hypothesis is that they would go for the hapless boob who has remained with their agency first, and not brave (foolhardy?) me who has evaded attention by courageously bending over to kiss the feet of his new corporate overlords. The report doesn't identify clients so this should not trigger an investigation.

Meh. Its all conjecture. Shame it has such real-world impacts.

All conjecture but matches my expectations - the main issue is getting yourself off the intermediary report as I suspect that report will be too tempting to ignore..

[SouWester]

I believe that the risks you mention have been pretty much covered in some of the other threads by some of the more prolific posters and admins on here..

Apologies if I have missed those, I have looked (promise). Also appreciate I am one of those newbies here, soz. I also appreciate that we're all pretty much clutching at straws (I am anyway), tho some appear to have bigger hands than others...

I guess I'm specifically interested in HOW our dear friends at HMRC might know that I was a contractor with my client and am now permanent with that client, as a trigger for an investigation.

So, distinction between trigger for an investigation, and what they might find out if they did start an investigation.

If they did investigate then they would find out, presumably. By looking at my contract and seeing the working location, clients name etc. The jig would be up, and I would be relying on the great care that my very good agency has put into the wording of my SOW contract (substitution etc).

My hypothesis though, is that HMRC will see me disappear off their 'intermediary report' and appear as an employee of some other company. No alarm bells.

Compare this to staying on their report and going from an A-D to an F, with the same agency. Was outside, now inside. Mmmm, juicy.

My hypothesis is that they would go for the hapless boob who has remained with their agency first, and not brave (foolhardy?) me who has evaded attention by courageously bending over to kiss the feet of his new corporate overlords. The report doesn't identify clients so this should not trigger an investigation.

Meh. Its all conjecture. Shame it has such real-world impacts.