Reply to: IR35 Status - Can Employer promise be trusted?

[jamesbrown]

The question I've not seen an answer to is what documentation is needed post-April 2020.

If HMRC come calling then what will a contractor need to prove that a given contract was outside?

Also, suppose other entities in the contract chain have ceased to exist (it could be some years since the work was carried out), what then? I understood (with no great certainty) that they can pursue others in the chain if for some reason they cannot get "the fee payer".

So, hypothetically, suppose an agency goes bust or is absorbed into another agency. Perhaps the client too. What then?
Can they nail the contractor (on a 'last man standing' basis) even if they have documentation to prove that the contract was supposedly outside IR35?

Any or all of:

• A professional contract review.
• A CEST determination (ideally completed by both parties and signed).
• A Confirmation of Arrangements letter
• Records of specific events that support your conclusions (e.g., e-mails informing the client about time off vs. asking for permission, records of substitutions undertaken, evidence of lack of control etc. This is a very long list of possibilities.)

But you wouldn't be sharing any of this directly w/ HMRC. It would go to your professional representative first.

[Aspidistra]

How to prove it was outside IR35?

The question I've not seen an answer to is what documentation is needed post-April 2020.

If HMRC come calling then what will a contractor need to prove that a given contract was outside?

Also, suppose other entities in the contract chain have ceased to exist (it could be some years since the work was carried out), what then? I understood (with no great certainty) that they can pursue others in the chain if for some reason they cannot get "the fee payer".

So, hypothetically, suppose an agency goes bust or is absorbed into another agency. Perhaps the client too. What then?
Can they nail the contractor (on a 'last man standing' basis) even if they have documentation to prove that the contract was supposedly outside IR35?

[Paralytic]

If it's a council they are a PS body so the rule are already in place.

I'm not sure about that. Wouldn't a council be a PS body?

[PerfectStorm]

Friday to Monday, employer... hmm

[simes]

If it's a council they are a PS body so the rule are already in place.

This acronym differentiating how, to the 'other' PS body...

PS, PS, PS...

[Lance]

This. It doesn't matter if you trust how smart they are about IR35. It does matter if you can trust them that they really have made an outside determination. You can trust that if it is in writing.

Further to this. The only writing I’d be interested in is an actual contract.
Anything else is just agency lies/noise.

[WordIsBond]

If it's a council they are a PS body so the rule are already in place.

To the OP:

10 If everything is in writing trust it
20 If not get it in writing and goto 10

This. It doesn't matter if you trust how smart they are about IR35. It does matter if you can trust them that they really have made an outside determination. You can trust that if it is in writing.

[GhostofTarbera]

Ok so the general message I am hearing is that since the rules changed 2 years ago for the public sector, The HMRC would come after the Council rather than the Contractor if they disagreed with IR35 status. So in this light, I am not sure whether it matters whether I trust the Council or not? - it essentially makes no difference to me.

I agree with the Council that the nature of the work is outside IR35 and that of a contractor, but I have to consider the risks associated with the HMRC taking a different view.

Hence why the majority of private companies are not taking the risk and are stopping engaging Contractors

Job done for them


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[SimonMac]

After April 2020, it's not your problem anymore as to whether your contract is inside or outside. The client takes on the responsibility and HMRC will go after them rather than your company if they decide to challenge.

If it's a council they are a PS body so the rule are already in place.

To the OP:

10 If everything is in writing trust it
20 If not get it in writing and goto 10

[Manic]

Assuming you are not giving up a paid role at the higher ph for this?

[eek]

Ok so the general message I am hearing is that since the rules changed 2 years ago for the public sector, The HMRC would come after the Council rather than the Contractor if they disagreed with IR35 status. So in this light, I am not sure whether it matters whether I trust the Council or not? - it essentially makes no difference to me.

I agree with the Council that the nature of the work is outside IR35 and that of a contractor, but I have to consider the risks associated with the HMRC taking a different view.

No you don't the risk is with the council for they would be the ones paying the tax afterwards.

A Public sector outside IR35 contract is (well was given the forthcoming changes) a contract with far fewer risks than a private sector contract.

[JamesC34]

Ok so the general message I am hearing is that since the rules changed 2 years ago for the public sector, The HMRC would come after the Council rather than the Contractor if they disagreed with IR35 status. So in this light, I am not sure whether it matters whether I trust the Council or not? - it essentially makes no difference to me.

I agree with the Council that the nature of the work is outside IR35 and that of a contractor, but I have to consider the risks associated with the HMRC taking a different view.

[simes]

After April 2020, it's not your problem anymore as to whether your contract is inside or outside. The client takes on the responsibility and HMRC will go after them rather than your company if they decide to challenge.

It is a Public Sector role so these guys have had two or more years to get their heads around this.

As to the OP's point, if there is nothing else on the table, I would trust them.

If you don't, ask some pertinent questions to see if the reasons for stating the role will be outside stand up to reason and demonstrate knowledge.

[northernladuk]

IR35 Status - Can Employer promise be trusted?

Hi - Newbie here,

Can anyone help advise please?

I have been offered a contracting job by a Council local authority.
The role is very similar to my current job, but the hourly rate is less then what I am currently on.

However, the agent has said the new employer will accept my role is outside IR35, meaning I will effectively have a pay-rise. They have provided me with a spreadsheet with all the calculations demonstrating this.

My question/concern is how reliable is this, can I trust that the judgement that the new Council is not made on IR35 status will not be challenged by HMRC? Who would HMRC challenge - the Council or me? And in a worst case scenario who would end up paying money back to the tax-office?

Any advice much appreciated.

I think you are in more danger of ruining your own outside status than your client or the role

Not sure how you can do an outside role when you don't appear to understand what being outside is.

After April 2020, it's not your problem anymore as to whether your contract is inside or outside. The client takes on the responsibility and HMRC will go after them rather than your company if they decide to challenge.

If it's a public sector role the 2020 has nothing to do with it. The PS rules have been in force for 2 years already no?

[LondonManc]

Point 1 - they aren't your employer, they're your client. Employers employ employees, clients hire contractors.

Point 2 - never trust a client, or at least have a small dose of paranoia; you could be canned at any minute so need to keep on your toes.

Point 3 - get the contract and working practices reviewed by QDOS and potentially run them against the CEST tool if QDOS don't offer to do that.