Reply to: Contract has been retrospectively declared inside IR35

[ladymuck]

First payment from the end client to the agency, not first client from the agency to the contractor (which may be a factored payment on submission of invoice to end client).

Ah... yes. Me and my lousy memory.

[eek]

I thought the SDS had to be issued before first payment was made (hence my thoughts around weekly payments) but I had forgotten that a client may change their mind later.

Good suggestion for Innoaccounts / Offpayroll. If lots of us suggest it to them they may add it?

First payment from the end client to the agency, not first client from the agency to the contractor (which may be a factored payment on submission of invoice to end client).

[ladymuck]

Weekly payment doesn't solve anything if the end client changes your status 3 months later.

Likewise an initial SDS statement doesn't help - as that was covered by "the agency appeals the outside SDS statement" scenario HMRC discussed during the workshops.

Basically accept an outside IR35 role but be careful.

We really should check if Innoaccounts / Offpayroll have a flag for "determination changed to Inside IR35".

I thought the SDS had to be issued before first payment was made (hence my thoughts around weekly payments) but I had forgotten that a client may change their mind later.

Good suggestion for Innoaccounts / Offpayroll. If lots of us suggest it to them they may add it?

[eek]

Indeed it's not their fault. But if my company has a contract to deliver services to the agency for a fee, and their client changes the terms of payment, it's only the agency my company can pursue for the missing payment.

It doesn't change the terms of the contract to the intermediary. It does however create a whole pile of additional paperwork that the intermediary now needs to deal with.

[dsc]

What other recourse options are there for this?
Sue the agency?
What's to stop any customer shafting any supplier by simply deciding at the last minute before payment to 'declare it as inside' just to be total arseholes? Could a customer of WiPro for example do this, and if they did what would WiPro's recourse be?

There is presumably some wording in the legislation that limits when an SDS can even be used. I don't know the legislation very well (at all).

Exactly this, what if you carry on for 6 months and at the end they say you know what, everything was inside all the time. This is an absolute joke, it's shouldn't be possible to change the determination retrospectively, perhaps then clients would actually give a sh*t about doing it properly.

[Lance]

It's not the agency's fault so you can't sue them.

Indeed it's not their fault. But if my company has a contract to deliver services to the agency for a fee, and their client changes the terms of payment, it's only the agency my company can pursue for the missing payment.

[Lance]

How would that impact WiPro - it may impact a contractor or 2 that WiPro is using but that would be it.

That's what I'm trying to understand....
What's to stop a git in accounts or procurement, for no good reason, deciding at the last minute that a bill to be paid to ANY supplier is now deemed as inside IR35? And therefore having a load of tax removed.
I don't understand how this whole SDS thing will work in a B2B relationship. I know it shouldn't but what is it in the legislation that makes doing an SDS a thing? And what stops is being applied incorrectly to any supplier?

I think I might be being really dumb here but I don't understand how this works. My apologies for that.

[eek]

It's not the agency's fault so you can't sue them.

I think one way to protect yourself is to be very wary of long payment terms and insist on weekly to minimise the risk.

Also, don't take a gig if the SDS isn't available before you sign the contract but that could be harder to achieve.

Weekly payment doesn't solve anything if the end client changes your status 3 months later.

Likewise an initial SDS statement doesn't help - as that was covered by "the agency appeals the outside SDS statement" scenario HMRC discussed during the workshops.

Basically accept an outside IR35 role but be careful.

We really should check if Innoaccounts / Offpayroll have a flag for "determination changed to Inside IR35".

[ladymuck]

What other recourse options are there for this?
Sue the agency?
What's to stop any customer shafting any supplier by simply deciding at the last minute before payment to 'declare it as inside' just to be total arseholes? Could a customer of WiPro for example do this, and if they did what would WiPro's recourse be?

There is presumably some wording in the legislation that limits when an SDS can even be used. I don't know the legislation very well (at all).

It's not the agency's fault so you can't sue them.

I think one way to protect yourself is to be very wary of long payment terms and insist on weekly to minimise the risk.

Also, don't take a gig if the SDS isn't available before you sign the contract but that could be harder to achieve.

[eek]

What other recourse options are there for this?
Sue the agency?
What's to stop any customer shafting any supplier by simply deciding at the last minute before payment to 'declare it as inside' just to be total arseholes? Could a customer of WiPro for example do this, and if they did what would WiPro's recourse be?

There is presumably some wording in the legislation that limits when an SDS can even be used. I don't know the legislation very well (at all).

How would that impact WiPro - it may impact a contractor or 2 that WiPro is using but that would be it.

[Lance]

What other recourse options are there for this?
Sue the agency?
What's to stop any customer shafting any supplier by simply deciding at the last minute before payment to 'declare it as inside' just to be total arseholes? Could a customer of WiPro for example do this, and if they did what would WiPro's recourse be?

There is presumably some wording in the legislation that limits when an SDS can even be used. I don't know the legislation very well (at all).

[jamesbrown]

Thanks for the update. I think more of this type of scenario needs to come up to show how terrible the guidance is.

I think it's unreasonable that a client can get several months after engaging resources to decide on what terms those resources are engaged under. I find it very difficult to understand why they don't know what type of resource they need before they go to market.

Thanks, IPSE.

[eek]

Thanks for the update. I think more of this type of scenario needs to come up to show how terrible the guidance is.

I think it's unreasonable that a client can get several months after engaging resources to decide on what terms those resources are engaged under. I find it very difficult to understand why they don't know what type of resource they need before they go to market.

What's wrong with the guidance - the rules are based on points IPSE campaigned for...

[ladymuck]

Thanks for the update. I think more of this type of scenario needs to come up to show how terrible the guidance is.

I think it's unreasonable that a client can get several months after engaging resources to decide on what terms those resources are engaged under. I find it very difficult to understand why they don't know what type of resource they need before they go to market.

[consultMe]

Just to provide an update...

QDOS weren't really able to help further. They said that although they still stand by their determination of 'outside' it is the prerogative of the end client to do what they want up to the point where they have not paid the intermediary. So I'll have to take the 3 months from April as PAYE via an umbrella.

I've since moved to another outside contract. I've gone through the formality of a QDOS SDS again though now I won't be comfortable until the client has paid the agency invoice, after the quarter is complete I guess.