Payment landing post-March

[SteelyDan]

I cited both to evidence the change of wording following the HMRC review. The draft legislation emphasised that services before April 6 were within scope if payments were received afterwards - hence the panic - but this was clarified following the review and the outcome can be seen in the enacted legislation. Yes, the wording is still ambiguous in the enacted legislation, but this change was made following the HMRC review and they explicitly conceded this point in the review.

In other words, I really think the situation is quite clear, legally speaking, if not quite so clear to fee payers.

Here is the outcome of the review:

https://assets.publishing.service.go...w_Document.pdf

Here is the explicit concession, which may provide you with some comfort.



My emphasis. Following the delayed implementation, I think it's quite clear that the same approach will apply in 2021 as it did in 2020 (i.e., for all references to 2020 substitute 2021).

Yep that's much clearer. Thanks for digging that out.

[jamesbrown]

That's the confusing part with statement 1...it's poorly worded & it depends how you read or interpret it. Is it the payment made on or after the 6th of April, or the services provided on or after 6th April?
Statement 2 (the previous statement) seemed to strictly confine it to payments made on or after the 6th April.

I cited both to evidence the change of wording following the HMRC review. The draft legislation emphasised that services before April 6 were within scope if payments were received afterwards - hence the panic - but this was clarified following the review and the outcome can be seen in the enacted legislation. Yes, the wording is still ambiguous in the enacted legislation, but this change was made following the HMRC review and they explicitly conceded this point in the review.

In other words, I really think the situation is quite clear, legally speaking, if not quite so clear to fee payers.

Here is the outcome of the review:

https://assets.publishing.service.go...w_Document.pdf

Here is the explicit concession, which may provide you with some comfort.

4.7 A common issue raised over the course of the review has been businesses’
concerns over when the rules will begin to apply to payments. Businesses
were concerned that the existing legislation would catch contracts for
services provided before April 2020 but invoiced after the rules came into
effect. Businesses reported that this was having an immediate impact on
their decisions about contracts.
4.8 The Government has listened and taken action early to give businesses
certainty, announcing on 7 February 2020 that the rules will now apply only
to payments made for services provided on or after 6 April 2020.

My emphasis. Following the delayed implementation, I think it's quite clear that the same approach will apply in 2021 as it did in 2020 (i.e., for all references to 2020 substitute 2021).

[SteelyDan]

The fact that all the agents and clients pushed payments early speaks volumes so whatever the ambiguity you want paying before the 6th.

Indeed that was my thinking. I'm awaiting a response from my accountant to see what he says, & hopefully that will support the message I send to the paying consultancy.

[northernladuk]

That's the confusing part with statement 1...it's poorly worded & it depends how you read or interpret it. Is it the payment made on or after the 6th of April, or the services provided on or after 6th April?
Statement 2 (the previous statement) seemed to strictly confine it to payments made on or after the 6th April.

The fact that all the agents and clients pushed payments early speaks volumes so whatever the ambiguity you want paying before the 6th.

[SteelyDan]

No, I think there is clarity that it will apply to services provided on or after April 6 2021, not payments made on or after April 6 2021 (a broader net). That is my reading of the situation anyway - a slight concession to simplify matters, following consultation.

That's the confusing part with statement 1...it's poorly worded & it depends how you read or interpret it. Is it the payment made on or after the 6th of April, or the services provided on or after 6th April?
Statement 2 (the previous statement) seemed to strictly confine it to payments made on or after the 6th April.

[jamesbrown]

So, that's a bit confusing.

According to one of the links (press) dated Feb 2020:

A) "HMRC has stated ahead of the publication of the government’s review that the changes being implemented in April 2020 will only apply to payments made for services provided on or after 6 April.",

whereas the contrasting, &

B) previous quote "Previously, the changes were due to be applied to any payments made on or after 6 April 2020"

So, at this stage, no clarity?

No, I think there is clarity that it will apply to services provided on or after April 6 2021, not payments made on or after April 6 2021 (a broader net). That is my reading of the situation anyway - a slight concession to simplify matters, following consultation.

[northernladuk]

You talking about the end client here? I'm not in direct communication with them at the moment, & don't think I'm in a place to query their decision, if you mean the end client...but I take your point that pub sec have, in the main, been inside roles. Though not always, even roles at HMRC for example have been outside, AFAIA.

The structure is private sector consultancy>my co as associate to consultancy>end client (gov org). I'm assuming the end client has told them (consultancy) of their decision wef April.

Still very odd. I'm on a PS role along with a few others and we are outside as we through a consultancy owning and delivering a service. There are also people here inside doing standard roles. We are on totally different frameworks and there isn't a crossover between them so they can't just switch us to inside.

Are the consultancy offering a service via Gcloud or are they just offering bums on seats via the Specialists route?

The only thing I can think of, and maybe I missed the point but, it must be the consultancy is dictating the IR35 status and has nothing to do with the gov client. That would explain the timings of the switch.

But yes you want you payment before April 4th or whatever date. Most agents and clients will do this. There was a raft of early payments when it hit the public sector and they left it so late last year people were getting paid before April last year as well.

[SteelyDan]

Whether the client actually operates it properly is another matter entirely

So, that's a bit confusing.

According to one of the links (press) dated Feb 2020:

A) "HMRC has stated ahead of the publication of the government’s review that the changes being implemented in April 2020 will only apply to payments made for services provided on or after 6 April.",

whereas the contrasting, &

B) previous quote "Previously, the changes were due to be applied to any payments made on or after 6 April 2020"

So, at this stage, no clarity?

[SteelyDan]

Very strange situation. The rules have been in place for public sector for two years now.

I'm confused and concerned they don't seem to understand the timings and how it affects them so I'd raise this with them and ask them why they are acting like a private sector setup when they are not.

You talking about the end client here? I'm not in direct communication with them at the moment, & don't think I'm in a place to query their decision, if you mean the end client...but I take your point that pub sec have, in the main, been inside roles. Though not always, even roles at HMRC for example have been outside, AFAIA.

The structure is private sector consultancy>my co as associate to consultancy>end client (gov org). I'm assuming the end client has told them (consultancy) of their decision wef April.

[northernladuk]

I mentioned this is another thread yesterday (about Banking) but didn't get any response so thought I'd start a separate thread on this particular point.

(Background is the outside role I start on Monday is a c.3-monther, and ends 31st of March, after which end client (gov dept) has said no more PSCs and it's inside wef April.)

I'm sure I've read on here that caution needs to be applied wrt final invoice payment, which will land in my business a/c (when I get one) end of April as it's 30 days payment terms, but can't find it.

Can someone advise if I've imagined it, or if there are possible issues? If so, I'll need to speak to the client so they can make this final payment quicker than the 30 days to avoid any issues.

Cheers.

Very strange situation. The rules have been in place for public sector for two years now.

I'm confused and concerned they don't seem to understand the timings and how it affects them so I'd raise this with them and ask them why they are acting like a private sector setup when they are not.

[jamesbrown]

Whether the client actually operates it properly is another matter entirely

[jamesbrown]

The draft legislation said this (or at least, one version of it):

https://assets.publishing.service.go...egislation.pdf

The amendments made by Part 2 of this Schedule have effect in relation to
deemed direct payments treated as made on or after 6 April 2020, and does
so even if relating to services provided before that date.

In contrast, it looks like the enacted legislation from FA 2020 says this:

Finance Act 2020

The amendments made by Part 2 of this Schedule have effect in relation to deemed direct payments treated as made on or after 6 April 2021.

There was also some stuff in the press around the time (prior to the delay):

HMRC make changes to reform off-payroll working rules

[SteelyDan]

I mentioned this is another thread yesterday (about Banking) but didn't get any response so thought I'd start a separate thread on this particular point.

(Background is the outside role I start on Monday is a c.3-monther, and ends 31st of March, after which end client (gov dept) has said no more PSCs and it's inside wef April.)

I'm sure I've read on here that caution needs to be applied wrt final invoice payment, which will land in my business a/c (when I get one) end of April as it's 30 days payment terms, but can't find it.

Can someone advise if I've imagined it, or if there are possible issues? If so, I'll need to speak to the client so they can make this final payment quicker than the 30 days to avoid any issues.

Cheers.