Outside IR35 with no SDS

[DigitalUser]

I’ve been offered an outside IR35 contract via a consultancy, but without a written SDS being provided. The work will be encapsulated by a SoW with clear deliverables and working practices will be consistent with an outside determination (I’ve done work with this consultancy before and there’s no D&C involved).

In the event of an investigation, who would be liable for penalties should HMRC take umbrage? As far as I’m aware the risk would sit with the consultancy.

R.E supply chain - the end client is based overseas but has a UK presence (although I would not be engaging with any UK entities for the work covered by the SoW).

[DigitalUser]

Not sure if it’s worth adding - the consultancy would fall under the small company exemption and my contract would be between my Ltd and the consultancy, not the end client

[jamesbrown]

Nominally the supply chain above YourCo (specifically the UK office/PE in terms of liability if the client is overseas). An SDS, issued timely and with reasonable care, is a requirement of the legislation (Chapter 10, Part 2, ITEPA), but overseas supply chains were always unworkable under Chapter 10. The overseas client won't want to engage with this (and cannot be made to) and the UK office/PE probably won't have a clue about what's going on, even though it's liable.

But look out for clawback clauses in your contract with the consultancy regarding tax and other liabilities. It's HMRC's view that the supply chain above YourCo should go after you in the event they're made to pay, and the contract may allow this. Those contractual clauses may work (or they may not).

[jamesbrown]

Not sure if it’s worth adding - the consultancy would fall under the small company exemption and my contract would be between my Ltd and the consultancy, not the end client

It's worth adding, but it's not relevant here. The size criterion applies to the end client.

[northernladuk]

Not sure if it’s worth adding - the consultancy would fall under the small company exemption and my contract would be between my Ltd and the consultancy, not the end client

https://www.qdoscommercialservices.c...on-statements/