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Reply to: Outside role
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Previously on "Outside role"
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Originally posted by Cookielove View PostHmmm what a muddle. Rightly or wrongly I assumed if a client makes an outside determination then there is no risk that the contractor can find themselves on the hook for taxes ...as they had no part in the decision whatsoever ...simple as that...if there is an SDS done and contract states role is outside IR35 surely the contractor can’t take the hit if client got it wrong...that’s common sense ...if they can then it’s very difficult to see where you can take an outside role workout this potentially happening albeit you had no say in the determination....I get it that HMRC would want the taxes if it’s wrong and they don’t care who’s pocket that comes out of...hey ho! Maybe permie looking a better option ....☺️
You are posting a question on a forum where 2 posters (JamesBrown and me) are more aware of the situation than probably anywhere else who hasn't made IR35 their full time job (and even then I suspect I know more than most full time IR35 "experts" when it comes to this niche area).
So the chances are that an outside IR35 contract really won't have any issues but you need to go in with your eyes open:-
1) Ensure you have a SDS determination that says outside
2) ensure you keep the contract outside by operating as a consultant / specialist not an employee. Remember to emphasis that it's in the interest of the client that you don't do XYZ if pushed to do things that make you into an employee.
3) Don't go mad and spend every penny...
And an inside IR35 contract isn't a big disaster - use them to top the pension up - the only issue is if every contract you get is inside IR35 and you have little savings.
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Originally posted by jamesbrown View Post
Supply chains are clearly under the impression that clawback clauses are important and will work (I think they're optimistic, but we'll see).
Otherwise we will be left in a situation like being outside Agency Regulations where no one has a clue if they really are or not and agencies use that grey area to continue to abuse things.
Remember one reason why Agencies love umbrellas is because it allows them to claim to be outside the regulations which they cannot do if you are on agency payroll.Last edited by eek; 31 October 2021, 13:00.
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Originally posted by Cookielove View PostHmmm what a muddle. Rightly or wrongly I assumed if a client makes an outside determination then there is no risk that the contractor can find themselves on the hook for taxes ...as they had no part in the decision whatsoever ...simple as that...if there is an SDS done and contract states role is outside IR35 surely the contractor can’t take the hit if client got it wrong...that’s common sense ...if they can then it’s very difficult to see where you can take an outside role workout this potentially happening albeit you had no say in the determination....I get it that HMRC would want the taxes if it’s wrong and they don’t care who’s pocket that comes out of...hey ho! Maybe permie looking a better option ....☺️
It will take a while for the dust to settle on this one, but the more the can is opened, the more worms appear, so don't start without an SDS from the client (it's their responsibility to pass this to you directly) and nail your contractual terms because that's about all you can control (other than choosing an umbrella). Supply chains are clearly under the impression that clawback clauses are important and will work (I think they're optimistic, but we'll see).
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Hmmm what a muddle. Rightly or wrongly I assumed if a client makes an outside determination then there is no risk that the contractor can find themselves on the hook for taxes ...as they had no part in the decision whatsoever ...simple as that...if there is an SDS done and contract states role is outside IR35 surely the contractor can’t take the hit if client got it wrong...that’s common sense ...if they can then it’s very difficult to see where you can take an outside role workout this potentially happening albeit you had no say in the determination....I get it that HMRC would want the taxes if it’s wrong and they don’t care who’s pocket that comes out of...hey ho! Maybe permie looking a better option ....☺️
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Originally posted by Cookielove View PostI don’t see how I could be liable for repaying any taxes as I’ve had nothing to do with the determination. That is solely the client deciding. Agency touting the role as outside. If client gives an outside SDS then surely that’s it the onus is on them...how can I be liable as I’ve had zip all to do with it ....surely if clients get to wrong contactless can’t in the frame that makes no sense to me...
Remember the scenarios you need to watch out for are:-
1) Agency assumes contract is outside IR35 without seeing the actual SDS determination on paper.
2) "Agency appeals" outside IR35 determination and an inside determination is given prior to the client making the first payment.
3) HMRC decides that the contract is inside IR35, chasing payment from the fee payer (agency) who then chases you for the money.
As for James Brown's argument - while I wouldn't be willing to sign a contract that has clawback clauses I can see a scenario where an agency / the liquidator of an agency could try to pass the bill back to the contractor either via court or via HMRC (in the latter case that seems to be how the agency is trying to play it). Just because a contract doesn't have explicit claw back clauses in it, I wouldn't trust them to not try and argue there is an implicit clause.
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Originally posted by Cookielove View PostIf contractors are going to be liable for a clients decision what’s the point...we are fall guys either way ?. As I said won’t proceed til a definitive answer and SDS, I suspect agency may be misleading people advertising it as outside ...we’ll see...
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If contractors are going to be liable for a clients decision what’s the point...we are fall guys either way ?. As I said won’t proceed til a definitive answer and SDS, I suspect agency may be misleading people advertising it as outside ...we’ll see...
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Originally posted by Cookielove View PostI don’t see how I could be liable for repaying any taxes as I’ve had nothing to do with the determination. That is solely the client deciding. Agency touting the role as outside. If client gives an outside SDS then surely that’s it the onus is on them...how can I be liable as I’ve had zip all to do with it ....surely if clients get to wrong contactless can’t in the frame that makes no sense to me...
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It’s not at that stage yet, no contracts as agency waiting on client to do the determination. Job advertised as outside, agency waiting on confirmation....
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I won’t proceed until it’s decided either way. Surely if a client gives an outside IR35 determination and it’s mentioned in the contract as outside there can be no come back on the individual...?
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Originally posted by Cookielove View PostI don’t see how I could be liable for repaying any taxes as I’ve had nothing to do with the determination. That is solely the client deciding. Agency touting the role as outside. If client gives an outside SDS then surely that’s it the onus is on them...how can I be liable as I’ve had zip all to do with it ....surely if clients get to wrong contactless can’t in the frame that makes no sense to me...
Leave a comment:
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I don’t see how I could be liable for repaying any taxes as I’ve had nothing to do with the determination. That is solely the client deciding. Agency touting the role as outside. If client gives an outside SDS then surely that’s it the onus is on them...how can I be liable as I’ve had zip all to do with it ....surely if clients get to wrong contactless can’t in the frame that makes no sense to me...
Leave a comment:
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