Reply to: What are your clients doing with IR35 reform?

[cojak]

No. These things change or get delayed for one reason or another. It gives you time to look for another contract before pulling the plug on this one.

[BABABlackSheep]

It's a rumour - who knows if it will happen.

I would hand my notice in within the hour of the announcement...

If you knew it was coming would you hand in before?

[jamesbrown]

possibly, and I'd have to examine the T&C before I accepted. However, I'm more concerned about my historical position and based on what Markel Tax have said, as long as I continue paying the insurance, then they would represent me for any historical challenge by HMRC. I just need to decide how long after I close MyCo down, should I continue paying the insurance to ensure that I'm covered.

I don't think the artist formerly known as AbbeyTax does tax loss insurance that is written on a "claims made" basis(?) I think it's for a specific contract/period. So you shouldn't need to maintain it. However, they used to be tied up with IPSE, so it may rely on IPSE+, which you may need to maintain as a precondition. Check the T&Cs before you waste money.

[JohntheBike]

Why would the client want to give you a false inside assessment? Surely the client would be better to mandate that you used an umbrella? What reasons are they going to give? "Dear jtb, here is your SDS, which says that you're inside for reasons XYZ, but we all know the truth, wink, wink." Remember that IR35 status can change over time as the WP change, so their earlier assessment, when they we not required to do so by law, may not reflect other periods in the past. Either way, the reality is what it is. But it would be wrong to think that a status change without a WP change was insignificant. The whole basis for IR35 is to establish a hypothetical contract based on the WP and other garnish (like the actual contract wording).

Surely the client would be better to mandate that you used an umbrella?

possibly, and I'd have to examine the T&C before I accepted. However, I'm more concerned about my historical position and based on what Markel Tax have said, as long as I continue paying the insurance, then they would represent me for any historical challenge by HMRC. I just need to decide how long after I close MyCo down, should I continue paying the insurance to ensure that I'm covered.

[ComplianceLady]

Can you elaborate on this?

All large orgs have a HMRC 'advisor', a letter came from them recently asking for details on IR35 prep, name of contact, numbers of contractors that type of information.

[jamesbrown]

That argument might have held water if it were not for the fact that the same organisation had already assessed some time ago that my current contract and working practises were not subject to the IR35 rules.

Why would the client want to give you a false inside assessment? Surely the client would be better to mandate that you used an umbrella? What reasons are they going to give? "Dear jtb, here is your SDS, which says that you're inside for reasons XYZ, but we all know the truth, wink, wink." Remember that IR35 status can change over time as the WP change, so their earlier assessment, when they we not required to do so by law, may not reflect other periods in the past. Either way, the reality is what it is. But it would be wrong to think that a status change without a WP change was insignificant. The whole basis for IR35 is to establish a hypothetical contract based on the WP and other garnish (like the actual contract wording).

[Paralytic]

I know that all large organisations got their phishing letters for IR35 recently so expect this has sharpened minds and left people in no doubt as to HMRC's approach.

Can you elaborate on this?

[JohntheBike]

If there's a change in WP, there's no reason it would cause problems. Indeed, it might even help. If there isn't a change in WP, then I doubt you interpreted their advice correctly. Think about it. "You admit that you're inside now, and you always worked in exactly the same way before now." Good luck with that.

If there's a change in WP

in reality there is unlikely to be, although I guess the contract will change. So we come back to the old chestnut, which takes precedent, the contract or the reality of the engagement?

"You admit that you're inside now, and you always worked in exactly the same way before now."

That argument might have held water if it were not for the fact that the same organisation had already assessed some time ago that my current contract and working practises were not subject to the IR35 rules.

[ComplianceLady]

The FS company I'm currently with will go public in about 3 weeks' time to declare that from April 2020 all contractors will have to go through an umbrella - so effectively an inside decision.

My question: I read somewhere else on this forum (think it might have been James Brown) that once a client declares like this, it becomes a matter of record that HMRC might subsequently use to say that pre-Apr 2020 the contractor was also really inside. And the client, having declared inside, would be arguing against the contractor in any court case.

So, never mind working into Q1 2020 and getting your last invoice cleared before 01 April. Would you actually leave before client makes the announcement, thus severing the bread crumb trail?

If they think about it though they can do it in a way that doesn't jeapordise or influence the historical risk. They don't have to make a determination for anyone engaged umbrella (PAYE), so if they say 'all contractors must workthrough umbrella X as we don't want to have to invest in an assessment process' it doesn't create any risk.

I know that all large organisations got their phishing letters for IR35 recently so expect this has sharpened minds and left people in no doubt as to HMRC's approach.

[jamesbrown]

I've clarified a similar situation with Markel Tax (previously Abbey Tax) with regards to my IR35 insurance. They have confirmed that if I accept an inside determination for the role that I currently have after April 2020, it will not prejudice my historical situation. So if HMRC come calling, they will handle it. Also, they have provided an assessment of my current contract and role, as being outside of IR35. So clearly, they would not be taking much risk if they did represent me.

If there's a change in WP, there's no reason it would cause problems. Indeed, it might even help. If there isn't a change in WP, then I doubt you interpreted their advice correctly. Think about it. "You admit that you're inside now, and you always worked in exactly the same way before now." Good luck with that.

[JohntheBike]

The risk isn't zero or high, but greyscale. For example, what is the risk when you leave before an SDS but you have the same contract and WP of those who remained and received a negative SDS? Is it zero? The client would presumably argue against you under investigation. But, sure, once you have an actual negative SDS on record, then that is probably an increased risk. A separate issue is the hooks available to HMRC to join dots. This also increases risk. But it isn't as though there are zero hooks right now versus many hooks post April 2020. For example, there's the onshore intermediaries legislation that applies now (aka, agency reporting requirements). The only thing you can really control is your own WP and gathering of evidence to support them. That will always come in handy in all negative scenarios.

I've clarified a similar situation with Markel Tax (previously Abbey Tax) with regards to my IR35 insurance. They have confirmed that if I accept an inside determination for the role that I currently have after April 2020, it will not prejudice my historical situation. So if HMRC come calling, they will handle it. Also, they have provided an assessment of my current contract and role, as being outside of IR35. So clearly, they would not be taking much risk if they did represent me.

[jamesbrown]

The FS company I'm currently with will go public in about 3 weeks' time to declare that from April 2020 all contractors will have to go through an umbrella - so effectively an inside decision.

My question: I read somewhere else on this forum (think it might have been James Brown) that once a client declares like this, it becomes a matter of record that HMRC might subsequently use to say that pre-Apr 2020 the contractor was also really inside. And the client, having declared inside, would be arguing against the contractor in any court case.

So, never mind working into Q1 2020 and getting your last invoice cleared before 01 April. Would you actually leave before client makes the announcement, thus severing the bread crumb trail?

The risk isn't zero or high, but greyscale. For example, what is the risk when you leave before an SDS but you have the same contract and WP of those who remained and received a negative SDS? Is it zero? The client would presumably argue against you under investigation. But, sure, once you have an actual negative SDS on record, then that is probably an increased risk. A separate issue is the hooks available to HMRC to join dots. This also increases risk. But it isn't as though there are zero hooks right now versus many hooks post April 2020. For example, there's the onshore intermediaries legislation that applies now (aka, agency reporting requirements). The only thing you can really control is your own WP and gathering of evidence to support them. That will always come in handy in all negative scenarios.

[cojak]

The FS company I'm currently with will go public in about 3 weeks' time to declare that from April 2020 all contractors will have to go through an umbrella - so effectively an inside decision.

My question: I read somewhere else on this forum (think it might have been James Brown) that once a client declares like this, it becomes a matter of record that HMRC might subsequently use to say that pre-Apr 2020 the contractor was also really inside. And the client, having declared inside, would be arguing against the contractor in any court case.

So, never mind working into Q1 2020 and getting your last invoice cleared before 01 April. Would you actually leave before client makes the announcement, thus severing the bread crumb trail?

It's a rumour - who knows if it will happen.

I would hand my notice in within the hour of the announcement...

[Swamp Thing]

A very large financial services company.

1. Go Permie
2. Go under their agreed Umbrella provider
3. Go home

The FS company I'm currently with will go public in about 3 weeks' time to declare that from April 2020 all contractors will have to go through an umbrella - so effectively an inside decision.

My question: I read somewhere else on this forum (think it might have been James Brown) that once a client declares like this, it becomes a matter of record that HMRC might subsequently use to say that pre-Apr 2020 the contractor was also really inside. And the client, having declared inside, would be arguing against the contractor in any court case.

So, never mind working into Q1 2020 and getting your last invoice cleared before 01 April. Would you actually leave before client makes the announcement, thus severing the bread crumb trail?

[simes]

A very large financial services company.

1. Go Permie
2. Go under their agreed Umbrella provider
3. Go home

Are we allowed to know who?