Reply to: IR35: Period working for 1 client

[NotAllThere]

...
For the future a much safer arrangement is to use a contractor's scheme that involves an EBT. It is IR35 proof and the contractor's take home pay is about 80% or slightly more of billed fees.

Based on this idiotic comment, can I suggest that his posting description remains, forever, at "Not worth listening to".

[jimjamuk]

try and use it to your advantage - make sure they agree to letting your working practices work in favour of being outside of IR35 (if you are not already)

[Not So Wise]

Tell them to read the history of IR35, it was specifically written to protect clients from liability thanks to heavy lobbying. IR35 has nothing to do with client (or agency) which is why we sometimes have to seriously fight to get IR35 compliant contracts/working conditions

[TheFaQQer]

For the future a much safer arrangement is to use a contractor's scheme that involves an EBT. It is IR35 proof and the contractor's take home pay is about 80% or slightly more of billed fees.

Apparently (and I don't think there has been much coverage on CUK recently), the government might be looking into clamping down on these. I think that if you search for BN66 there may be one or two posts about it somewhere.

HTH.

[Peoplesoft bloke]

These arrangements are fraught with IR35 risk. So much depends on the contract details. If trouble looms one of the leading experst in ths field is Dave Smith of Accountax Consulting at Trinity House in Milton Keynes. Dave Smith has the best record of defeating the Revenue.

For the future a much safer arrangement is to use a contractor's scheme that involves an EBT. It is IR35 proof and the contractor's take home pay is about 80% or slightly more of billed fees.

Spam. Misleading at that (in my not very humble opinion of course)

[Fred Bloggs]

For the future a much safer arrangement is to use a contractor's scheme that involves an EBT. It is IR35 proof and the contractor's take home pay is about 80% or slightly more of billed fees.

Yeah, this is where we get to hear about the EBT scheme that you just happen to run eh?

[shoes]

Everyones an idiot. HTH

[ASB]

In principle it is the case that the IR35 obligations rest with the individual.

However there is least the theoretical possibility that the debt (if any were established) could be transferred to the end client. In order for this to happen the OP would have to not pay them and be shown to be neglectful. Quit a hurdle. In any event this would only get them transferred to the agency. So it would then the the case that they would need to be in default and also neglect could be established (at least that is my reading that the transfer provisions become sequential rather than conferring joint and several liability further up the contractual chain. There is also some doubt as to whether the transfer provisions would even be capable of being applied at all in these circumstances).

If HR legals want to worry about it they might be better served by considering whether their actions (in addition to this) have established an employee/employer relationship under tax laws (almost certainly not) and/or employment law (given the different definitions involved). The latter is more likely (or rather simply very slightly less improbable) due to the broader definition of the term "worker".

As far as I am aware this has only happened in Muscat v Cable and Wireless at an ET. However this had some very specific and unusual circumstances.

[TopBanana]

Sounds like someone in HR may have a hidden agenda?

[mahon and co]

Try a safer way of working

I have been working for a client (big multinational) for coming up to a year.

I am working via an agency and I have a contract that includes right to substitution etc.

The clients lawyers (probably HR) are now concerned that IR35 will effect them. So if HMRC catch me for IR35 and I am unable to pay then it will come back to them and they will be liable for the fines.

To this end they are suggesting that their best strategy with all contracting consultants is to restrict any single period of work to 1 year.

My directors are livid and have asked me to see what I can find out about this issue.

It was my understanding that all liabilities lie with my company and as it is a limitied company all liabilities end with my company.

Furthermore, I was of the understanding that with regards to the period of time it was after 2 years that a contractor lost the right to claim for expenses if working for 1 client.

The director is going to provide me with the presentation given by legal/hr and I will post details on here.


All comments are welcome

These arrangements are fraught with IR35 risk. So much depends on the contract details. If trouble looms one of the leading experst in ths field is Dave Smith of Accountax Consulting at Trinity House in Milton Keynes. Dave Smith has the best record of defeating the Revenue.

For the future a much safer arrangement is to use a contractor's scheme that involves an EBT. It is IR35 proof and the contractor's take home pay is about 80% or slightly more of billed fees.

[jetrimby]

Perfect replies agree totally. Just to add as you mentioned the worry over what happens if your company couldnt pay the tax bills. As you are owner/director of that company the Revenue have pretty strong powers to come after you but not your customers (that would only apply if you were self employed)

[northernladuk]

The clients lawyers (probably HR) are now concerned that IR35 will effect them.

Advise them they ought to stop focussing on their contractors and go find a decent legal/HR team lol....

[ratewhore]

<snip>

My directors are livid and have asked me to see what I can find out about this issue.

<snip>

Do they know where you have come for advice

[Moscow Mule]

PCG Legal maybe? If you're a member of course...

[Qdos Contractor]

You'd be surprised (or maybe not) at how often this happens.

Everything TheFaQQer says is spot on. If you use an IR35 expert for contract reviews etc it might be worth getting them to speak to the client to explain. That normally does the job.