Reply to: IR35 Implications from April - Converting to work thru Umbrella company

[WordIsBond]

ESI tells me that I am self employed.

I am not self employed.

The ESI is fairly meaningless.

I was advised by a lawyer who said far differently. He said if you run through it as if you were self-employed rather than Ltd, and their own tool says you are not employed by your engager, that it would be very helpful in an IR35 defence. IR35 is based on the argument that your working practices show that you are a hidden employee, so if their own tool says you aren't an employee, he'd love to have that in defending a case. He's killed two enquiries at an early stage with that as the primary tool at his disposal.

FWIW. Probably somewhat depends on the investigator.

[LondonManc]

I am just considering what best to do, knew I'd be ok to leave the decision till late as contracts up just in time to not fall under April 6th deadline.....they want me to stay but to be quite honest I'd be better off just looking at real people jobs closer to home than staying here on Umbrella, and then there's the possibility of this previously outside IR35 contract all of a sudden being in being a big signal to HMRC that they can come and investigate.

They've suggested declaring In well before the changes, not sure I am up for that don't see how that will help....they've suggested a stretch of time off then coming back under a new role under Umbrella, that seems a little more feasible but like I say, the difference in pay would be massive. Most of all I am very keen not to get back taxed for the last 9 months I am not too bothered about staying here....I can make any decisions about accepting in/out new contracts in sound knowledge I'm complying with tax laws then. I guess it could be a lot worse than 9 months looking on the bright side, they'll have a job going back further as the last company has thankfully liquidated. I'd be pretty confident of that being outside anyway.

It's a shame as they really need me and I quite like it here

If it's the expenses that are a big kicker, see if they can do anything about covering them for you - 10% on top of your current day rate plus hotel and return train ticket versus outside IR35 wouldn't be too bad if your expenses are significant.

[Manwell Pablo]

I am just considering what best to do, knew I'd be ok to leave the decision till late as contracts up just in time to not fall under April 6th deadline.....they want me to stay but to be quite honest I'd be better off just looking at real people jobs closer to home than staying here on Umbrella, and then there's the possibility of this previously outside IR35 contract all of a sudden being in being a big signal to HMRC that they can come and investigate.

They've suggested declaring In well before the changes, not sure I am up for that don't see how that will help....they've suggested a stretch of time off then coming back under a new role under Umbrella, that seems a little more feasible but like I say, the difference in pay would be massive. Most of all I am very keen not to get back taxed for the last 9 months I am not too bothered about staying here....I can make any decisions about accepting in/out new contracts in sound knowledge I'm complying with tax laws then. I guess it could be a lot worse than 9 months looking on the bright side, they'll have a job going back further as the last company has thankfully liquidated. I'd be pretty confident of that being outside anyway.

It's a shame as they really need me and I quite like it here

[LondonManc]

I think it is a lot less likely, if you go umbrella, that your historical contracts will be investigated. There will be no formal determination by the client that you are under IR35. Their old contract for your services was with an agency. Their new contract is with a completely different entity, the umbrella.

If you stay Ltd and are determined to be inside, they'll almost certainly look at old contracts. I think there is a risk of it if you go umbrella, especially if a 90% of the contractors at the PSB go brolly -- they'll say, "Ha, it's obvious what was happening here, we'll go after these guys." But the risk is a lot lower if you go brolly, probably.

Should you have been inside? If so, maybe you should just pay your taxes, rather than live in fear that they are going to catch up with you.

+1

I think this is exactly the end game that HMRC want; if you come quietly, they'll accept that you've taken what they see as the right steps. What needs to happen, though, is an appreciation of expenses and that these should be met by the client in terms of travel and accommodation in some way or other, but not to the extent that this results in the candidate nearest the client getting the gig by default.

If you fight, they'll fight back.

[MrMarkyMark]

FTFY

I can see why he's confused. There do seem to be a number of disrespectful tools around.

[RonBW]

Your response sounds a tad disrespectful but I will let that go. I said the EXISTING tool, so ESI.

ESI tells me that I am self employed.

I am not self employed.

The ESI is fairly meaningless.

[northernladuk]

Your response sounds a tad disrespectful but I will let that go. I said the EXISTING tool, so ESI.

I can see why he's confused. There do seem to be a number of tools around.

[Quality]

ESI

What tool are you on about?

The new one?

Your response sounds a tad disrespectful but I will let that go. I said the EXISTING tool, so ESI.

[northernladuk]

If I work through an Umbrella company for same Client , will it be classified as Inside IR35. Would you please advise.

OMG really? And we wonder why HMRC are after us.

[RonBW]

How about if a contractor already has a decision of "self-employed" for their existing contract using the HMRC tool that was available at the time, which commits to being a binding decision if the answers entered are correct? Coming after someone in that instance would not be the low-hanging fruit that HMRC will target.

If you are self employed then you are working directly with the client, paying a different level of NI, but IR35 doesn't affect you.

[WordIsBond]

I think it is a lot less likely, if you go umbrella, that your historical contracts will be investigated. There will be no formal determination by the client that you are under IR35. Their old contract for your services was with an agency. Their new contract is with a completely different entity, the umbrella.

If you stay Ltd and are determined to be inside, they'll almost certainly look at old contracts. I think there is a risk of it if you go umbrella, especially if a 90% of the contractors at the PSB go brolly -- they'll say, "Ha, it's obvious what was happening here, we'll go after these guys." But the risk is a lot lower if you go brolly, probably.

Should you have been inside? If so, maybe you should just pay your taxes, rather than live in fear that they are going to catch up with you.

[MrMarkyMark]

How about if a contractor already has a decision of "self-employed" for their existing contract using the HMRC tool that was available at the time, which commits to being a binding decision if the answers entered are correct? Coming after someone in that instance would not be the low-hanging fruit that HMRC will target.

What tool are you on about?

The new one?

[Quality]

Current HMRC tool

Could be.

Could do.

How about if a contractor already has a decision of "self-employed" for their existing contract using the HMRC tool that was available at the time, which commits to being a binding decision if the answers entered are correct? Coming after someone in that instance would not be the low-hanging fruit that HMRC will target.

[BlueSharp]

Hello, I am currently contracting through my Own limited company for a Public Sector Client.
If I work through an Umbrella company for same Client , will it be classified as Inside IR35. Would you please advise.

Does this involve any potential IR35 investigation for past contracting work, even for going permanent role / through umbrella company for same client.

Thanks & Regards,
Raja

1) You will be paying tax as an employee of the brolly so IR35 status is irrelevant
2) Do you think HMRC will pass the opportunity when they already have evidence to prove you are inside IR35 for investigating your IR35 status prior to the change? (Hint: Yes I think they will)

[MrMarkyMark]

Hello, I am currently contracting through my Own limited company for a Public Sector Client.
If I work through an Umbrella company for same Client , will it be classified as Inside IR35. Would you please advise.

Does this involve any potential IR35 investigation for past contracting work, even for going permanent role / through umbrella company for same client.

Thanks & Regards,
Raja

Could be.

Could do.