Reply to: New 9 month contract offer outside IR35

[CheeseSlice]

My logic for the notice period:

• Give yourself a way out, cutting your losses to the minimum if found inside. Though its unlikely you'd be working Inside via your LTD (more like contract ends, replaced with Brolly or PAYE arrangement), you may not want to be commited to completing the existing contract, working inside on an outside day rate.
• You also have the opportunity to get out before the SDS is even done, halting it in its tracks. So if you feel the client is going to wrongly determine status, and you're fortunate to have other options, get out as cleanly as you can and move on.

[northernladuk]

Don't think a new contract is necessary. I'd just make sure you have a notice period that allows you to terminate prior to April. You should do all of the due diligence bits others have said to make sure the contract and working practices are outside IR35.

Then just carry on and wait for the discussions about SDS (status determination statement) and then pay very close attention to decide your next move.

But remember, as soon as the client has made a determination you are toast. You can get out before it hits in April but your IR35 status is in tatters. All you are doing by leaving before April is attempting to avoid being caught. Only takes HMRC to ask for all contractors that had a determination, regardless if they are still there or not and your done.

Waiting until you get determined inside and then attempt to run isn't a very good option at all.

[CheeseSlice]

Should I sign or ask for a contract until the end of tax year 2020/21 and then review?

Don't think a new contract is necessary. I'd just make sure you have a notice period that allows you to terminate prior to April. You should do all of the due diligence bits others have said to make sure the contract and working practices are outside IR35.

Then just carry on and wait for the discussions about SDS (status determination statement) and then pay very close attention to decide your next move.

[Paralytic]

It won't matter from April as the clients will be liable, not the contractors. What will you be posting about then northernlad ? I recommend retirement in the sun. Nuuk, Greenland perhaps

Some people will still need to check stuff with their accountants and someone has to tell them

[northernladuk]

It won't matter from April as the clients will be liable, not the contractors, what will you be posting about then northernlad ?

There will always be some pillock posting ill thought out pointless questions to keep me happy..

[GitMaster69]

No I'm not. Git has a history of questionable posts with lack of detail. There are a vast number of contractors out there that think sending their contract of to QDOS is all that they need to do and once it's passed they turn up on site and act like permies. I was clarrifying that just QDOS is not due diligence. Maybe I got a bit tripped over with terms at worst but hardly losing it.


And that is exactly what I meant and said.

It won't matter from April as the clients will be liable, not the contractors. What will you be posting about then northernlad ? I recommend retirement in the sun. Nuuk, Greenland perhaps

[northernladuk]

You're losing it pal. You're quoting someone say that due diligence is a must and then say then need to do more than that and carry out due diligence.

No I'm not. Git has a history of questionable posts with lack of detail. There are a vast number of contractors out there that think sending their contract of to QDOS is all that they need to do and once it's passed they turn up on site and act like permies. I was clarrifying that just QDOS is not due diligence. Maybe I got a bit tripped over with terms at worst but hardly losing it.

OP, I think what NLUK means is that due diligence extends beyond checking the pieces of paper that link you to the client and getting them reviewed.

Consider the following:
- collect any and all evidence of you being treated differently to a permie because you're a contractor. For example, social nights out where contractors have to pay but permies go free.
- think as a supplier, not an employee. Are you being paid to do that piece of work they've asked of you because it's in your contracted deliverables?
- behave as a third party consultant; promote brand you. If something isn't in your deliverables but they talk to you about it, explain politely that it's not what you were brought in for but you're happy to quote for it as part of further deliverables and the priorities of that versus your original contracted work can be negotiated too.
- don't take up any employee freebies, no matter how tempting. I don't mean the free pens that end up on every desk, but more the employee discounts that can pop up in canteens, etc.

And that is exactly what I meant and said.

[LondonManc]

You will need a hell of a lot more than that. You need to have carried out diligence to make sure it is definitely outside IR35. Also if that diligence is just having QDOS check it then that's not going to work either. They check the contract, they can't do the WP so if the OP goes on site and starts acting like a perm then all that diligence will be for nothing.

Just showing you carried out some diligence won't cut it.

You're losing it pal. You're quoting someone say that due diligence is a must and then say then need to do more than that and carry out due diligence.

OP, I think what NLUK means is that due diligence extends beyond checking the pieces of paper that link you to the client and getting them reviewed.

Consider the following:
- collect any and all evidence of you being treated differently to a permie because you're a contractor. For example, social nights out where contractors have to pay but permies go free.
- think as a supplier, not an employee. Are you being paid to do that piece of work they've asked of you because it's in your contracted deliverables?
- behave as a third party consultant; promote brand you. If something isn't in your deliverables but they talk to you about it, explain politely that it's not what you were brought in for but you're happy to quote for it as part of further deliverables and the priorities of that versus your original contracted work can be negotiated too.
- don't take up any employee freebies, no matter how tempting. I don't mean the free pens that end up on every desk, but more the employee discounts that can pop up in canteens, etc.

[GitMaster69]

You will need a hell of a lot more than that. You need to have carried out diligence to make sure it is definitely outside IR35. Also if that diligence is just having QDOS check it then that's not going to work either. They check the contract, they can't do the WP so if the OP goes on site and starts acting like a perm then all that diligence will be for nothing.

Just showing you carried out some diligence won't cut it.

Well if it gets to a stage where you are investigated , you’re pretty much ****ed. My friend was revenge investigated for not paying his ltd tax (got hit by a 2008 crisis and didn’t have money for CT - so he tried to close his ltd without paying it) hmrc in return investigated him and gave him nice cheque from which he hasn’t recovered for years.

Conclusion - pay your taxes folks and pay off your bbl

[northernladuk]

if you are investigated, for before April work, you need to show that you've done due diligence to make sure the role is outside (like using QDOS for example)

You will need a hell of a lot more than that. You need to have carried out diligence to make sure it is definitely outside IR35. Also if that diligence is just having QDOS check it then that's not going to work either. They check the contract, they can't do the WP so if the OP goes on site and starts acting like a perm then all that diligence will be for nothing.

Just showing you carried out some diligence won't cut it.

[GitMaster69]

Have been offered a new 9-month contract starting 1st December with a private sector client (through an agency), it's outside IR35

All sounds good but the client isn't very experienced with using a contractor and the agency will say anything! Should I be worried about the contract going into tax-year 2021/22?

Should I sign or ask for a contract until the end of tax year 2020/21 and then review?

From April the client makes the determination. If they say it's outside and it turns out it's inside after investigation, they are liable not you. So you are all good if they are happy to tell you you're outside.
Agencies are now insuring themself from ir35 investigations. So things will be quite normal...

Get the contract reviewed first up.

if you are investigated, for before April work, you need to show that you've done due diligence to make sure the role is outside (like using QDOS for example)

[Lance]

Get the contract reviewed first up.

Then determine whether the client is large enough such that they make the determination post April.
If they are then you may want to check, after you get your feet under the table, what the post April status will be? What is their determination process? Have the started? Can you be involved?

If they are small then you need to be carrying on as usual. You are likely to be at very low risk of investigation as HMRC have bigger fish to fry. Although if the client has been abusing the furlough scheme then HMRC may be looking very closely at all their affairs. Make sure you're squeaky clean.

[LondonManc]

Contract and working practices review by professional to confirm status.

Once you’re in there and have a good relationship with your hiring manager, talk about IR35 with them. Explain why yours is outside compared to others, if it indeed is.

[northernladuk]

That said, if the contract fails IR35 and they just change it to make it pass and then you get on site and find your RoS is buggered and they want to Direct and Control you then you are going to have to re-assess very quickly. Cross that bridge when you get to it.

[northernladuk]

We don't really know. The best you can do is carry out the proper diligence on the contract, make sure you know IR35 very well and don't shoot yourself in the foot and get the proper insurances.

Even if the very worst happens in April and clients admits you are all inside (which you should be able to guess after a couple of weeks at the client using your IR35 knowledge) then your exposure is only a few months. You'll be peanuts to HMRC. There is talk they won't come after contracts, just the agencies/clients but I'm not sure. There are many contractors out there that rather stupidly went inside last April but didn't and will go inside again this April with 3, 4 or 5 years behind them. They are ****ed and will be the top of HMRC's list.

Approach this contract carefully with all the proper diligence in place and then re-asses in April. Now is not the time to be turning any work down IMO.