Deloitte confirms post-April 2021 ban on PSCs

[eatenrifles]

Yes this is already happening in Engineering where I work. I had an email from my agent letting me know my current role (and the one going forward) is considered outside IR35. The management feel certain roles that are consultant based should remain outside so that they can keep/hire the best.

I'm in engineering too. Current, direct, client has been very pragmatic with the approach and got all contractors third-party assessed, SDS issued as outside.

A friend of mine working for a large automotive is currently in there via a consultancy (owned by said large auto) and has had the same. End client was an absolute poopshow during the run up to the April 2020 false alarm, simply sweeping everyone inside. Having binned almost every contractor when Covid hit last year, they are now allowing certain routes to working with them on an outside basis.

[creativity]

I'm still of the view that at least some big corporates will take a different stance. They'll get their legal/risk/insurance/HR bods to work together and get contracts with clear working practices that make them safe from IR35. They'll then offer outside gigs. Everything else being equal these will be more appealing to contractors than inside gigs elsewhere. This will give those corporates first pick of the best contractors.

Given how many IR35 cases HMRC lose even when the end client hasn't really cared (hence potentially done/said things unhelpful to the contractor from an IR35 perspective), surely it won't be too hard for corporates to be 99% confident they'd win any HMRC legal challenges?

I think as with lots of things, there'll be an initial over-reaction, then a gradual drift back to the new normal (which will be lots of outside IR35 contracting gigs...but now no risk for the contractor).

Yes this is already happening in Engineering where I work. I had an email from my agent letting me know my current role (and the one going forward) is considered outside IR35. The management feel certain roles that are consultant based should remain outside so that they can keep/hire the best.

[vwdan]

I'll be very interested to see what my client, a large IB, will do. I'm currently on an outside contract, Ltd Co and have filled in a questionnaire via QDOS who are presumably supply some kind of service/insurance to them.

We wait and see!

[eek]

Which lucky private company will be the recipient of this I wonder?

IR35 inspectors to probe public PSCs retrospectively

That's from 2017 and HMRC have said they aren't going to do similar this time around.

Although given what they promised in 2017 and then didn't implement is it wise to trust a department that is going to be desperately hunting for any and all money it can raise next year.

[cojak]

Which lucky private company will be the recipient of this I wonder?

IR35 inspectors to probe public PSCs retrospectively

[jamesbrown]

And so the Legal department for company X sends back proof based on advice given by expert IR35 lawyers (the likes of QDOS etc).

What do HMRC do then?

HMRC could still take the case to Tribunal or whatever the next level is and hope they can find cracks in the evidence when they get people testifying in person but that seems to be pretty high risk for HMRC to me. Potentially wasting the courts time when they have no evidence before hand.

OK, I'll humour you and assume that the minority scenario whereby a company actually understands IR35, did their proper due diligence, per contractor, based on working practices and decided to take the (completely unnecessary) risk of hiring outside IR35 contractors is actually a realistic scenario across many big corporates, contrary to the logic of self-preservation and the reality that is emerging

In that case, HMRC don't (and won't) go for high-hanging fruit because that would be stupid and counterproductive. They will go for low-hanging fruit and seek to apply it more widely after that. There are always low-hanging fruit within companies as well as whole companies that are low hanging fruit.

[eek]

And so the Legal department for company X sends back proof based on advice given by expert IR35 lawyers (the likes of QDOS etc).

What do HMRC do then?

HMRC could still take the case to Tribunal or whatever the next level is and hope they can find cracks in the evidence when they get people testifying in person but that seems to be pretty high risk for HMRC to me. Potentially wasting the courts time when they have no evidence before hand.

I don't think you get how HMRC work.

It's not we will pick an individual case - it's we will take all 50 people in the company, identify the weakest and then ask for the other 49 to be included when HMRC win the court case.

[Fraidycat]

You've got it the wrong way around. The burden of proof is not on HMRC, rather on the supply chain (the Fee Payer in the first instance, but possibly the client that issued the SDS in the second instance).

"Why should we believe this SDS? We don't believe it. Show us proof for each aspect."

And so the Legal department for company X sends back proof based on advice given by expert IR35 lawyers (the likes of QDOS etc).

What do HMRC do then?

HMRC could still take the case to Tribunal or whatever the next level is and hope they can find cracks in the evidence when they get people testifying in person but that seems to be pretty high risk for HMRC to me. Potentially wasting the courts time when they have no evidence before hand.

[jamesbrown]

How does HMRC prove the determination is wrong ie. the client made the wrong determination.

You've got it the wrong way around. The burden of proof is not on HMRC, rather on the supply chain (the Fee Payer in the first instance, but possibly the client that issued the SDS in the second instance).

"Why should we believe this SDS? We don't believe it. Show us proof for each aspect."

[eek]

Hello Company X - this is HMRC calling we are looking at XYZ would you like to be helpful or would you prefer us to (ab)use our Customs powers...