Outside IR35 determination, so contract withdrawn/replaced with inside-IR35

[penx]

I've demonstrated to my client that my current contract will be outside IR35, which they have accepted.

However, they have now told me they will only deal with inside-IR35 contractors going forwards and so will withdraw my contract soon (I think due to nervousness of getting a determination wrong).

Is this a common scenario? Am I right in thinking there's nothing I can do about this?

I guess, if I want to continue working with them, I should ask them to write up a distinctly different contract to what I currently have, that is clearly inside IR35?

Any other advice?

Thanks!

[jamesbrown]

Correct, there isn’t much you can do unless you have considerable leverage with your client and I guess your post indicates that you don’t. Sticking around is a risk to your past status because, let’s face it, the client doesn’t really want anything to change, they simply want to mitigate their own risk. But, yes, if you must stay, you’d want a distinct change in contractual terms and, crucially, in working practices. It’s a bit late in the day, though; the client should’ve worked this out before April 6.

[eek]

Correct, there isn’t much you can do unless you have considerable leverage with your client and I guess your post indicates that you don’t. Sticking around is a risk to your past status because, let’s face it, the client doesn’t really want anything to change, they simply want to mitigate their own risk. But, yes, if you must stay, you’d want a distinct change in contractual terms and, crucially, in working practices. It’s a bit late in the day, though; the client should’ve worked this out before April 6.

Not really the client has until they make their first payment for work done after April 6th to make a determination.

And this was one of the scenarios we both expected to appear - clients will decide after work begins that the work required is inside rather than outside IR35.

[jamesbrown]

Not really the client has until they make their first payment for work done after April 6th to make a determination.

And this was one of the scenarios we both expected to appear - clients will decide after work begins that the work required is inside rather than outside IR35.

Right, we knew it was going to happen, and it's possible that it has happened with the OP - OP would need to clarify - either way, they're in a tough spot now.

[northernladuk]

Is this a common scenario? Am I right in thinking there's nothing I can do about this?

Yes it is and no you can't

I guess, if I want to continue working with them, I should ask them to write up a distinctly different contract to what I currently have, that is clearly inside IR35?

Correct. They should have issues you with an SDS once they did whatever exercise to come to the inside conclusion whcih should include a new contract. It appears your clients doesn't have much of a clue.

I do have to ask why you didn't ask the client for a determination in the run up to April as well but it's too late now.

Any other advice?

Leave.

[penx]

I do have to ask why you didn't ask the client for a determination in the run up to April as well but it's too late now.

I did have a determination that I was outside (after a bit of back and forth).

But they have since decided they don’t want any contractors who are outside.

[northernladuk]

I did have a determination that I was outside (after a bit of back and forth).

But they have since decided they don’t want any contractors who are outside.

You said 'I've demonstrated to my client that my current contract will be outside IR35, which they have accepted.' which isn't the way. They do the determination based on what they want. You and the client often have differing opinions on D&C and Subs. You might think it's in your contract but if they want to tell you what to do and would really refuse a push comes to shove then that's their call and no amount of demonstrating would help.

Sounds like they didn't know and when they came to look in to it they just said screw it everyone inside. Not uncommon but most clients did this last year or at least Jan/Feb.

[Paralytic]

I did have a determination that I was outside (after a bit of back and forth).

But they have since decided they don’t want any contractors who are outside.

Those two decisions are not necessarily mutually exclusive.

There's a good chance that the person who agreed to the outside determination (your immediate contact at the client?) is not the same person who has since decided they don't want to engage with contractors (legal/finance/risk?).

The latter will always win that internal battle.

[penx]

You said 'I've demonstrated to my client that my current contract will be outside IR35, which they have accepted.' which isn't the way.

I think I'm referring to an SDS appeal, though it was perhaps a little more informal.

I should have said "working practices, verbal agreements and contract mean they should classify me as outside IR35" rather than "my current contract will be outside IR35".

Those two decisions are not necessarily mutually exclusive.

There's a good chance that the person who agreed to the outside determination (your immediate contact at the client?) is not the same person who has since decided they don't want to engage with contractors (legal/finance/risk?).

The latter will always win that internal battle.

I think they've just changed their mind, I suspect because they want to keep things simple and a 'everyone has to be inside IR35' keeps things simple for them - which is annoying but I guess I don't have much say in the matter.

Leave.

Unfortunately I quite like them, other than this :-)