Reply to: Judge rejects CEST assessment

[Yorkie62]

Can't find reference to this yet.... very interesting?

Is this the reference you were looking for?

https://assets.publishing.service.go...00977.2018.pdf

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[Hobosapien]

Do you have highly specialised skills hobosapien? What prevents a prospective client from saying no thanks to your 'suitable rate' ?

There will be a fairly complex calculation used to determine if a rate is above an acceptable threshold, partly based on location (no expenses within IR35), duration (rate not as important if contract likely to yield under or around £40k as I intend putting as much as I can into pension pot pre-tax, for now), skills usage and potential to upskill on the job officially or unofficially.

Paltry rates such as those under £300/day inside IR35 are non-starters. I intend upskilling to follow the money where possible, to avoid languishing too long where rates look to be going south rather than yet to peak.

Alternatively I may finally crack a plan B and be done with the whole contracting thing, though 20 years and counting I should already have been able to retire if I'd not blown my early years stash on failed plan Bs and 'entertainment'.

[theroyale]

Nope. Been outside IR35 with contract review and insurance, until PS client deemed me inside to cover their arses as part of a blanket determination. Accepted a new contract (after a decent break from old world to new) when they uplifted my old rate to offset IR35 (mostly), and pay for hotel costs when they want me on site, rest of time I'm 100% WFH.

But with the way things are looking I don't want the hassle of the HMRC bogeyman knocking on the door years down the line, even if confident of being outside and backed up by a contract review. So will only accept inside IR35 roles with a suitable rate to compensate. Much less stress that way. In an industry where consultancies charge silly money to provide absolute numpties I no longer care about fleecing the clients. They've made their own bed by going along with HMRC's bad policies and trying to offload their tax liabilities to contractors by saying yes they were disguised employees. I'll just say I'm a consultant on my CV, no longer a contractor.

Do you have highly specialised skills hobosapien? What prevents a prospective client from saying no thanks to your 'suitable rate' ?

[Hobosapien]

So you’ve been holding back and contracting for lower rates until now?

Nope. Been outside IR35 with contract review and insurance, until PS client deemed me inside to cover their arses as part of a blanket determination. Accepted a new contract (after a decent break from old world to new) when they uplifted my old rate to offset IR35 (mostly), and pay for hotel costs when they want me on site, rest of time I'm 100% WFH.

But with the way things are looking I don't want the hassle of the HMRC bogeyman knocking on the door years down the line, even if confident of being outside and backed up by a contract review. So will only accept inside IR35 roles with a suitable rate to compensate. Much less stress that way. In an industry where consultancies charge silly money to provide absolute numpties I no longer care about fleecing the clients. They've made their own bed by going along with HMRC's bad policies and trying to offload their tax liabilities to contractors by saying yes they were disguised employees. I'll just say I'm a consultant on my CV, no longer a contractor.

[mudskipper]

What is interesting is the route used to the courts.




Employment Tribunal Claim..... Perhaps why IPSE are a little quiet is they never thought of this.

Did you miss the Susan Winchester case?

[Lance]

What is interesting is the route used to the courts.

“Submitting an employment tribunal claim is free and, as this case has shown, can be used to secure almost undeniable proof over an individual’s IR35 status.”

Employment Tribunal Claim..... Perhaps why IPSE are a little quiet is they never thought of this.

[jamesbrown]

If enough projects struggle, fail, or go way over sensible budgets

That would require HMG to admit that there’s a problem, which they won’t do. The whole history of IR35 is fingers in ears. Companies will pay more and contracting will become more binary.

Until then I'll contract inside IR35 but at a higher threshold rate than previously, to offset the lack of expenses and additional taxes.

So you’ve been holding back and contracting for lower rates until now?

[Maslins]

Also I imagine that would just shift the argument from "is this role inside/outside IR35?" to "is this role in the IT sector?".

[eek]

The only way contractors can rest easy is if they give specific sectors a free pass.

If enough projects struggle, fail, or go way over sensible budgets, and they can't rely on largely inferior foreign resource or outsourcing companies then maybe they'll start to see that giving the IT sector exemption from IR35 and related 'disguised employee' legislation is the sensible way of not only getting the work done on time but at a reasonable cost.

Until then I'll contract inside IR35 but at a higher threshold rate than previously, to offset the lack of expenses and additional taxes.

Not sure which other sectors would warrant a free pass due to the nature of the short term work where flexible resource at a reasonable cost should be paramount. Construction seems an obvious one. Otherwise if it's TV presenters or general dogs bodies forced to be 'self-employed' by companies shirking their tax liabilities, then they are fair game to being penalised.

Has AIPSE or any other 'voice' of contracting even thought of trying this approach and if so why did they fail?

Construction already has the CIS system and we don't want to go near that...

[Hobosapien]

The only way contractors can rest easy is if they give specific sectors a free pass.

If enough projects struggle, fail, or go way over sensible budgets, and they can't rely on largely inferior foreign resource or outsourcing companies then maybe they'll start to see that giving the IT sector exemption from IR35 and related 'disguised employee' legislation is the sensible way of not only getting the work done on time but at a reasonable cost.

Until then I'll contract inside IR35 but at a higher threshold rate than previously, to offset the lack of expenses and additional taxes.

Not sure which other sectors would warrant a free pass due to the nature of the short term work where flexible resource at a reasonable cost should be paramount. Construction seems an obvious one. Otherwise if it's TV presenters or general dogs bodies forced to be 'self-employed' by companies shirking their tax liabilities, then they are fair game to being penalised.

Has AIPSE or any other 'voice' of contracting even thought of trying this approach and if so why did they fail?

[Maslins]

My expectation is that the private sector will mostly not be using CEST; they will either make it very clear that a contract is inside (umbrella, FTC and/or other appropriate contract wording) or they will make it very clear that it's outside, which means not relying on CEST.

I agree with this. I anticipate big businesses will end up having two types of contracts for contractors that are very different, which lawyers will have carefully drafted with IR35 in mind, and insurers will back. On the basis at least some contractors will be deemed inside IR35 (or be put onto payroll so not contractors at all), hopefully HMRC/Hammond will consider the fight won/over, even if it's not as high a % of contractors as they'd originally have hoped. Then maybe everyone (contractors and clients) can rest easy.

[simes]

Thanks for posting.

Fascinating.

[swamp]

Who benefits? Hammond's mates at the consultancies.

The consultancies will benefit. But I'm hoping that contractors will ultimately benefit as the government will be forced to sort out the IR35 mess once and for all.

[LondonManc]

Hammond is about to open Pandora's box, as I mentioned here

https://www.contractoruk.com/forums/...mployed-7.html

Contractors forced inside IR35 (by risk-averse clients) can and will litigate to get their money back.

Clients will have to take as much care declaring contractors inside as they will declaring them outside.

Who benefits? Hammond's mates at the consultancies.

[mudskipper]

Edit : Looks like they have released a statement on it although it is missing some of the detail from the report the OP posted. Specifically the fact that the claimant is now owed in the region of £9,500 in over paid tax and NI.

ICBW, but I suspect that will need to be claimed separately - the ET would be unlikely to rule on business taxes. Until the judgement is published, we're guessing. HMRC would have a hard time refusing that claim, but the mechanism remains unclear - it should not need to be via SA if it's business taxes.