Agent - "It's that simple"

[LondonManc]

That would be my understanding, yes.

IANAL, but I think it would need to be very carefully worded so that it's not just a case of the agency being able to bypass their statutory responsibilities. I know that some contracts already include clauses like "we have the right to deduct taxes due" in them (bad idea to accept the contract in that case!), so I would be looking carefully to make sure that there isn't anything additionally included in the small print.

Of course, the actual legislation is out on Monday and so the liability may change - what kind of business is there that makes one company liable for the decision made by someone else where they have no input into the decision at all? On the assumption that the legislation doesn't change the liability when it comes out, I would guess that it is more likely for the agency to push the liability for an incorrect determination up the chain to the client (who made the determination and who has lots of money) rather than down the chain to the contractor (who had no input to the determination, doesn't have as much money, and can phoenix relatively easily) - that's the move I would make if I was an agent.

That's my main concern - the agency wriggling out of accepting any responsibility, arm round the shoulder, "don't worry mate, of course it's outside IR35, we'll take the rap for it", then shaft you in the small print.

It's an absolute minefield out there, good luck everybody.

[RonBW]

Following on from that, would it have to be in an agency to limited company contract to allow the agency to recover the costs from the contractor's ltd co if HMRC found an incorrect determination?

That would be my understanding, yes.

IANAL, but I think it would need to be very carefully worded so that it's not just a case of the agency being able to bypass their statutory responsibilities. I know that some contracts already include clauses like "we have the right to deduct taxes due" in them (bad idea to accept the contract in that case!), so I would be looking carefully to make sure that there isn't anything additionally included in the small print.

Of course, the actual legislation is out on Monday and so the liability may change - what kind of business is there that makes one company liable for the decision made by someone else where they have no input into the decision at all? On the assumption that the legislation doesn't change the liability when it comes out, I would guess that it is more likely for the agency to push the liability for an incorrect determination up the chain to the client (who made the determination and who has lots of money) rather than down the chain to the contractor (who had no input to the determination, doesn't have as much money, and can phoenix relatively easily) - that's the move I would make if I was an agent.

[LondonManc]

As I've posted elsewhere, it's also in the guidance from HMG on how to apply the rules.

Following on from that, would it have to be in an agency to limited company contract to allow the agency to recover the costs from the contractor's ltd co if HMRC found an incorrect determination?

[RonBW]

It's in 10(2) of the ITEPA (draft Finance Bill 2017), which deals with IR35, notably draft Clause 61N(3): "The fee-payer is treated as making to the worker, and the worker is treated as receiving, a payment which is to be treated as earnings from an employment". This is all subject to the fraud clauses though.

As I've posted elsewhere, it's also in the guidance from HMG on how to apply the rules.

[northernladuk]

That's the responsibility for deducting the correct taxes though isn't? The responsibility for saying those taxes are to be deducted lies with the client. Or, if the client says the role is outside IR35, the PSC as it is now.

Dunno. You'll have to ask JamesBrown. I just copied his response from the other thread the OP asked the same question in.

[malvolio]

It's in 10(2) of the ITEPA (draft Finance Bill 2017), which deals with IR35, notably draft Clause 61N(3): "The fee-payer is treated as making to the worker, and the worker is treated as receiving, a payment which is to be treated as earnings from an employment". This is all subject to the fraud clauses though.

That's the responsibility for deducting the correct taxes though isn't? The responsibility for saying those taxes are to be deducted lies with the client. Or, if the client says the role is outside IR35, the PSC as it is now.

[northernladuk]

I duplocate my question here, but where exactly in the legislation does it say that?

It's in 10(2) of the ITEPA (draft Finance Bill 2017), which deals with IR35, notably draft Clause 61N(3): "The fee-payer is treated as making to the worker, and the worker is treated as receiving, a payment which is to be treated as earnings from an employment". This is all subject to the fraud clauses though.

[pscont]

The second is already in the legislation - which clearly states that the financial liability for wrong decision falls with the last link in the chain before the PSC - Agency/PSB, not the PSC.

I duplicate my question here, but where exactly in the legislation does it say that?

[sal]

I think it is unlikely that an end client would be willing at this stage to declare that an engagement is outside the new rules for off payroll public sector workers.

Why? IR35 itself hasn't changed. ClientCo can do what most of us has been doing for a while - get the contract and working practices assessed by QDOS etc. and make a decision based on that. No need to wait on HMRC to provide half-ass tool on 06.04. I assume they can even take an insurance just like we do. Not all PSBs are clueless.

I would want a formal declaration that the client has done the assessment of the role, coupled with an agreement that if HMRC later find that the role was in fact incorrectly assessed by the client that the liability falls solely on the payer before I would consider a role.

But you're unlikely to get the first bit, let alone the second.

I have the first in an e-mail from the IT Director and the agency. Some more formal documentation is underway, no idea in what form.

The second is already in the legislation - which clearly states that the financial liability for wrong decision falls with the last link in the chain before the PSC - Agency/PSB, not the PSC.

[RonBW]

I would want a formal declaration that the client has done the assessment of the role, coupled with an agreement that if HMRC later find that the role was in fact incorrectly assessed by the client that the liability falls solely on the payer before I would consider a role.

But you're unlikely to get the first bit, let alone the second.

[Patrick@Intouch]

I think it is unlikely that an end client would be willing at this stage to declare that an engagement is outside the new rules for off payroll public sector workers.

This doesn't mean to say that it isn't true and I have heard of people being given the same reassurances.

It would take something concrete (i.e. in writing and from the end client) to convince me that they had seriously considered the status and come to a reasoned conclusion.

If you manage to get this level of confirmation then take it as the responsibility for getting it wrong then lies further up the chain than you.

[sal]

It's that simple...

All that remains to be seen is how it's going to be documented in advance.

If ClientCo PSB wishes to declare my contract outside IR35 and the agency is on board, all that i need is to start seeing my invoices paid in full and i will be happy bunny. Don't care of the HMRC tool or if the engagement scores high/low enough on it. If HMRC later decides the contract was inside IR35 - it's the PSB and agency on the hook, not me.

[FrontEnder]

Had a call from an agency about a PS gig.

I'd rather wait until things are clearer on the IR35 thing before risking anything in the public sector, so told the agent as much and I wasn't interested. His response was that he'd enquire if it was in scope or not and if it wasn't, then I needn't worry about the changes coming in April.

I said I don't think it's that simple and would rather not take the risk for now. His response was that it is that simple - they'll work with the client and HMRC, there's some tests (presumable the online ones that aren't ready yet) and if they say the role is outside I'll be ok.

Forgive me if I don't share his optimistic view on all this.