Outside IR35 - Documents and formal paperwork requirements

[sojan]

As part of new contract extension, the agency and the end-client provided that the work is "outside assessment".
I have received
1. A CEST assessment copy with end-client and Agency info (as Hirer) - but no mention of my name or limited company.
2. An email stating (from agency with names & mention of End-client), that the contract is outside (this is addressed to me as director & my limited company)
3. Normal contract extension document

Just double checking If (1) and (2) enough for/as formal documentation?

[ladymuck]

If you've ever looked at the CEST output, you'd see that the scope for personalising it is optional / limited. If the client has done role based assessments then you wouldn't expect it to be personalised to you anyway.

Is the email taking the place of the SDS? You don't mention receiving one of those and that's a document specifically mentioned in the legislation.

[sojan]

If you've ever looked at the CEST output, you'd see that the scope for personalising it is optional / limited. If the client has done role based assessments then you wouldn't expect it to be personalised to you anyway.

Is the email taking the place of the SDS? You don't mention receiving one of those and that's a document specifically mentioned in the legislation.

Thanks ladymuck for your response.

I Had sent a template from qdos SDS and they emulated the Status Determination Statement as an email. So I didn't receive an SDS PDF or letter-head as such, but much of the template contents are in the email.

[ladymuck]

Thanks ladymuck for your response.

I Had sent a template from qdos SDS and they emulated the Status Determination Statement as an email. So I didn't receive an SDS PDF or letter-head as such, but much of the template contents are in the email.

That's more reassuring.

I don't think there's much else you can do really.

Well done on getting an outside gig

[sojan]

That's more reassuring.

I don't think there's much else you can do really.

Well done on getting an outside gig

Thank you again and your reply is reassuring.

[ladymuck]

Thank you again and your reply is reassuring.

Someone will come along with an opinion to the contrary, no doubt

[jamesbrown]

The legislation is a little vague about what constitutes an SDS, but an e-mail would be fine as a transmission mechanism.

“Meaning of status determination statement

61NA(1) For the purposes of section 61N “status determination statement” means a statement by the client that–

(a)states that the client has concluded that the condition in section 61M(1)(d) is met in the case of the engagement and explains the reasons for that conclusion, or

(b)states (albeit incorrectly) that the client has concluded that the condition in section 61M(1)(d) is not met in the case of the engagement and explains the reasons for that conclusion.

61NA(2) But a statement is not a status determination statement if the client fails to take reasonable care in coming to the conclusion mentioned in it.

61NA(3) For further provisions concerning status determination statements, see section 61T (client-led status disagreement process) and section 61TA (duty for client to withdraw status determination statement if it ceases to be medium or large).”

Plus these explanatory notes.

Sub-paragraph 12(6) inserts new section 61NA into ITEPA 2003, which introduces the concept of a “status determination statement”. In order to be a valid “status determination statement” it must include the client’s status determination with respect to that engagement, as well as the reasons for reaching that determination. New section 61NA also requires the client to take reasonable care when making that determination.

The hard part is "reasonable care" (61NA(2)). This is what the ESM says about it:

https://www.gov.uk/hmrc-internal-man...anual/esm10014

In short, it's impossible for us to say whether it is a "valid" SDS because "reasonable care" has a complex interpretation, but it was probably transmitted acceptably (a CEST results plus an e-mail). It probably should've identified the supply chain more clearly. Either way, this is first and foremost a problem for the supply chain above YourCo.

[sojan]

The legislation is a little vague about what constitutes an SDS, but an e-mail would be fine as a transmission mechanism.



Plus these explanatory notes.



The hard part is "reasonable care" (61NA(2)). This is what the ESM says about it:

https://www.gov.uk/hmrc-internal-man...anual/esm10014

In short, it's impossible for us to say whether it is a "valid" SDS because "reasonable care" has a complex interpretation, but it was probably transmitted acceptably (a CEST results plus an e-mail). It probably should've identified the supply chain more clearly. Either way, this is first and foremost a problem for the supply chain above YourCo.

great post with details. The supply chain is complex (in my case) but they have mentioned the agency and End-client. Most of these agencies are still coping up the changes and shame I had to send them the template !

[jamesbrown]

great post with details. The supply chain is complex (in my case) but they have mentioned the agency and End-client. Most of these agencies are still coping up the changes and shame I had to send them the template !

Right. Anyway, I don't think there's anything more for you to do. As long as you've got an e-mail claiming to be an SDS, together with the CEST result (the "reasoning"), then I think you've been notified correctly and the liability is on the supply chain above you in case their assessment is wrong. If you haven't already done so, you'd probably want to have the contract extension reviewed for commercial terms, looking out for any language surrounding a transfer of liability, but this is part of the usual due diligence, nothing special.