Blanket IR35 Determination / "HR Policy Against PSC's"

[jamesbrown]

There are only legal consequences if not enough tax was paid i.e. contractors deemed outside are actually inside, so a blanket decision to put all contractors inside IR35 is the easiest option.

Nope. There is a mandated client-led status disagreement process and a client will need to defend any proceedings against them. For example, if they don’t respond within 45 days, they become the de facto Fee Payer. The risks are not symmetric, obviously, but the only risk free option is to mandate no PSCs and that is what they will do (the sensible ones that want to avoid any risk). If taxes are withheld wrongly, the client may be liable to refund them, but they may not have them fully refunded by HMRC.

[Lance]

Nope. There is a mandated client-led status disagreement process and a client will need to defend any proceedings against them. For example, if they don’t respond within 45 days, they become the de facto Fee Payer. The risks are not symmetric, obviously, but the only risk free option is to mandate no PSCs and that is what they will do (the sensible ones that want to avoid any risk). If taxes are withheld wrongly, the client may be liable to refund them, but they may not have them fully refunded by HMRC.

the thing is, how many contractors can afford to have that fight?
I cannot see IPSE spaffing the money to sue a client either.

[jamesbrown]

the thing is, how many contractors can afford to have that fight?
I cannot see IPSE spaffing the money to sue a client either.

Why would a client risk it when they don’t need to? The SDS and the status disagreement process is an inviolable admin cost, regardless of any subsequent proceedings and regardless of outcome. That is the minimum cost to the client. The maximum is rather more.

[mattfx]

So my question was is anyone else in this situation and what are people actually doing.. The answers are mostly all whether semantics around the wording are right / what is legal or lawful..

In the same way the tax loophole exploited by the loan charge scheme wasn't in the "spirit" of the legislation, I feel the banning contractors via an HR policy is also not in the spirit of the new proposed legislation and eventually, a lot of these big corps will have their wrists slapped. The intention from HMRC is to get individual status assessments done, and get people working in a manner they see is fair. (whether how they see it is right or not, is another matter)

I'll speak to my accountant. I have to weigh up whether NIC's and other back tax 9 months of my day rate is worth risking for another few months of a slightly reduced rate to close out my project.

[jamesbrown]

Not at all. The intention is to increase tax take. HMRC have no objections whatsoever to a change in company policy that achieves that. It’s called the intermediaries legislation for a reason. It applies to intermediaries.

[jamesbrown]

Anyway, yes, many people are in the same situation or will be soon.

[Paralytic]

So my question was is anyone else in this situation and what are people actually doing.. The answers are mostly all whether semantics around the wording are right / what is legal or lawful..

No-one can answer this till you clarify whether you will be inside IR35. You hinted you think you would be, but I suspect (as per replies above) this is just a blanket ban of PSC engagement and are being told to engage via PAYE or Umbrella, or leave.

The general discussion here has been that staying with a client when you were previously self-determining outside of IR35 and will then be at the same client who has disengaged with PSCs (but not making IR35 determinations), then the additional risk is of HMRC linking the two together. That could introduce a (slight?) increased risk of being investigated for the outside IR35 period of your contract. That does not, in itself, make it more likely that that period of time will be found to have been inside.

[northernladuk]

I've said there's no way I'm going inside especially without additional remuneration.

So there is a way then? If there is no way then the part after is irrelevant.

[win10]

The general discussion here has been that staying with a client when you were previously self-determining outside of IR35 and will then be at the same client who has disengaged with PSCs (but not making IR35 determinations), then the additional risk is of HMRC linking the two together. That could introduce a (slight?) increased risk of being investigated for the outside IR35 period of your contract. That does not, in itself, make it more likely that that period of time will be found to have been inside.

This.

+ I have doubts the change will be on in April. If the shait keeps hitting the fan with covid and all.

In effect banning the PSCs is better for you that being assessed inside.

Name the client if you want. Is is BP?

[Lance]

Why would a client risk it when they don’t need to? The SDS and the status disagreement process is an inviolable admin cost, regardless of any subsequent proceedings and regardless of outcome. That is the minimum cost to the client. The maximum is rather more.

indeed. Hence the ban on PSCs.
I think we're agreeing in a roundabout fashion