Reply to: Potential public sector contractor at renewal time

[ladymuck]

I thought applying penalties was unusual?

Penalties are applied if they think you wilfully withheld tax due rather than made an honest mistake.

[teapot418]

Potential public sector contractor at renewal time

Yes, pcg membership as it was then was critical along with business in own right factors such as marketing materials, insurances etc in making it very hard for them to conclude inside ir35, but they had a damn good go, and put me through it. Ironically the penalties and interest they wanted me to pay grew each year it went on, which was galling as it was them dragging the case/timescales out into years

I thought applying penalties was unusual?

[MonkeyWorld]

Potential public sector contractor at renewal time

Fecking ridiculous. I believe I read somewhere that they have been taken to task about that and are concluding cases more quickly. Good to hear the experts did a good job for you. Well worth having insurance IMO.

Yes, pcg membership as it was then was critical along with business in own right factors such as marketing materials, insurances etc in making it very hard for them to conclude inside ir35, but they had a damn good go, and put me through it. Ironically the penalties and interest they wanted me to pay grew each year it went on, which was galling as it was them dragging the case/timescales out into years

[teapot418]

yeah you never win, I had 3+ years of mental torture and ruined weekends with numerous pages hmrc inspector letters landing on my doorstep most Fridays. Abbeytax were fantastic and guided me through, with hmrc pulling out at tribunal stage without giving reasons. As close to win as you ever really get

Fecking ridiculous. I believe I read somewhere that they have been taken to task about that and are concluding cases more quickly. Good to hear the experts did a good job for you. Well worth having insurance IMO.

[MonkeyWorld]

I imagine win is not the best word. No one wins dragging people through so much crap even if it comes to nothing if you get my meaning.

yeah you never win, I had 3+ years of mental torture and ruined weekends with numerous pages hmrc inspector letters landing on my doorstep most Fridays. Abbeytax were fantastic and guided me through, with hmrc pulling out at tribunal stage without giving reasons. As close to win as you ever really get

[northernladuk]

Agreed. But it would be nice to know the outcome.
(Most people who "win" seem to report that HRMC reluctantly concede that they will not pursue it further, but without admitting you're in the clear)

Indeed. With so little evidence of actual IR35 investigation it would be very good feedback.

[teapot418]

I imagine win is not the best word. No one wins dragging people through so much crap even if it comes to nothing if you get my meaning.

Agreed. But it would be nice to know the outcome.
(Most people who "win" seem to report that HRMC reluctantly concede that they will not pursue it further, but without admitting you're in the clear)

[northernladuk]

How did it pan out? Did you win?

I imagine win is not the best word. No one wins dragging people through so much crap even if it comes to nothing if you get my meaning.

[teapot418]

My contract runs out end Feb in any case hence why renewal is being offered/discussed now (4-5wks before). So best option is probably just to let that run down unless I can get reassurances, and then reconsider options at end of Feb if anymore is known. Would like to stay, but I've had one 3+yr ir35 investigation before and I've no wish to go through anything like that again...So prob better off in private sector proper now

How did it pan out? Did you win?

[MonkeyWorld]

Depends on your payment terms. but I would renew until March 1st to provide time for a handover and for this to settle down.

As DaveB says any payment in April after the 5th, may have tax deducted and may open you up to retrospective investigations - with awkward to answer explanations required.

And if you are inside IR35 you can no longer claim expenses and that may make you contract unprofitable....

My contract runs out end Feb in any case hence why renewal is being offered/discussed now (4-5wks before). So best option is probably just to let that run down unless I can get reassurances, and then reconsider options at end of Feb if anymore is known. Would like to stay, but I've had one 3+yr ir35 investigation before and I've no wish to go through anything like that again...So prob better off in private sector proper now

[DaveB]

Why? who gives a tulip if the department you're contracting for falls apart, surely the more that do would serve to highlight the terrible decision the Tory government have made.

It also makes it clear to the department that the only reason you are leaving is the new rules from HMRC. Makes it clear where the blame lies.

[eek]

Why? who gives a tulip if the department you're contracting for falls apart, surely the more that do would serve to highlight the terrible decision the Tory government have made.

It's an excuse to take a months money rather than sitting on the bench... You can leave now or ask for a months extra money with a just about plausible excuse....

[SlipTheJab]

Depends on your payment terms. but I would renew until March 1st to provide time for a handover and for this to settle down.

As DaveB says any payment in April after the 5th, may have tax deducted and may open you up to retrospective investigations - with awkward to answer explanations required.

And if you are inside IR35 you can no longer claim expenses and that may make you contract unprofitable....

Why? who gives a tulip if the department you're contracting for falls apart, surely the more that do would serve to highlight the terrible decision the Tory government have made.

[eek]

So I'm potentially in the frame as I contract for a major consultancy providing IT solutions to a public sector client, now up for renewal that'd take me past the start of the finyear.

What to do?
My client (the consultancy) will almost certainly toe the line as their contract with the true end client is up for renewal in June.

So do i walk now?
Renew just till 5th April?
Ignore it and renew into May?
Demand 20% increase ?

Depends on your payment terms. but I would renew until March 1st to provide time for a handover and for this to settle down.

As DaveB says any payment in April after the 5th, may have tax deducted and may open you up to retrospective investigations - with awkward to answer explanations required.

And if you are inside IR35 you can no longer claim expenses and that may make you contract unprofitable....

[DaveB]

So I'm potentially in the frame as I contract for a major consultancy providing IT solutions to a public sector client, now up for renewal that'd take me past the start of the finyear.

What to do?
My client (the consultancy) will almost certainly toe the line as their contract with the true end client is up for renewal in June.

So do i walk now?
Renew just till 5th April?
Ignore it and renew into May?
Demand 20% increase ?

Renewing until April won't cover you, the new rules apply to any payments received after April 5th, so your last months income will be caught.
If you want to be paying full PAYE and NI on everything paid after April 5th and leave yourself open to the possibility of a retrospective investigation.
20% won't cut it. Do the sums and allow for the fact that you won't be getting travel and accommodation expenses anymore.