Reply to: View from Clients so far

[jamesbrown]

Many thanks for keeping us informed ComplianceLady; it's much appreciated.

Yup. Very useful - thanks.

[cojak]

Move to umbrella I expect or via Agencies and then either direct or via umbrella. There's no appetite for clients to start payrolling that I've seen.

Many thanks for keeping us informed ComplianceLady; it's much appreciated.

[ComplianceLady]

do you have any insight into how clients intend to handle RTI and payslips for contractors declared inside IR35 from next April? Are there any signs of a mass move to umbrellas, or any other structure?

Move to umbrella I expect or via Agencies and then either direct or via umbrella. There's no appetite for clients to start payrolling that I've seen.

[ComplianceLady]

It certainly looks that way. I'm building up the war chest to see how the land lies towards the end of next year. I'm sure my current gig will declare me outside and they may even fall in the small business exemption but who knows who things will go.

For those inside there's no appetite for inside IR35 via PSC from what I've seen. It'll be PAYE direct or Umbrella (likely the latter).

[ComplianceLady]

I thought there was some requirement on agencies to report who is on their books and what they've paid them? Maybe someone in HMRC has started looking at the data...

EDIT: this is what I'm thinking of
Submit an employment intermediary report - GOV.UK

Agencies reort everyone paid off payroll. So should anyone paying people off payroll (though compliance is varied for those direct).

They report individual (Name, address, NINO or Gender + DOB), PSC, value & payment vehicle.

I don't believe we report the end client (though I'd have to check) so the question for me is where they got that part of the puzzle (unless they're direct).

[ladymuck]

...

How does the HMRC know who you are with anyway? It’s only if they investigate you.

I thought there was some requirement on agencies to report who is on their books and what they've paid them? Maybe someone in HMRC has started looking at the data...

EDIT: this is what I'm thinking of
Submit an employment intermediary report - GOV.UK

[northernladuk]

Matters not. I’m outside now, and happy to fight the case. The problem is more if the client is lazy and blanket assesses everyone inside. Then gives HMRC more ammunition.

How does the HMRC know who you are with anyway? It’s only if they investigate you.

Looking at the news that Glaxo contractors are being targeted it looks like they will go for a client and everyone there. Or use the old method of having a gander when something flags like problem with your returns etc.

[BABABlackSheep]

wont switching to an umbrella because of ir35 whilst staying with the same client leave you wide open to a retrospective tax attack?

Matters not. I’m outside now, and happy to fight the case. The problem is more if the client is lazy and blanket assesses everyone inside. Then gives HMRC more ammunition.

How does the HMRC know who you are with anyway? It’s only if they investigate you.

[mrdonuts]

Ah, what I meant was that most of the contractors have been here a while now, so an inside IR35 decision everyone will leave just in case HMRC investigate why they deemed themselves out previously now the client has said in.

Why I said I may stay, is because if they force everyone to go umbrella, then this takes IR35 out of the equation. .

wont switching to an umbrella because of ir35 whilst staying with the same client leave you wide open to a retrospective tax attack?

[northernladuk]

I still think you'll be surprised. Those that don't have a clue what IR35 is or just don't care won't understand the retrospective aspect either.

[BABABlackSheep]

So you've said yourself you might stay so declaring everyone inside may not be suicide at all.

Ah, what I meant was that most of the contractors have been here a while now, so an inside IR35 decision everyone will leave just in case HMRC investigate why they deemed themselves out previously now the client has said in.

Why I said I may stay, is because if they force everyone to go umbrella, then this takes IR35 out of the equation. I have enough money in my company to get a nice low tax payoff for closing it. That extra money will offset the loss in income in the short term, and then I can just start another company in the future if I want.

[northernladuk]

I've heard the company and the agency(sole provider) are just in consultation. One of the options being discussed is to form a separate entity(company) for all the contractors to work through, so assuming an umbrella type model.

Didn't happen in the public sector. The client doesn't care how the contractor is set up, they just want the bod on site. The agent deals with that and with them being able to offer PAYE or just farm it off to an umbrella there is no need to set anything up. They just change the remuneration model i.e. from contract with LTD paying gross to contract with brolly, pay gross and brolly does the PAYE. Anything else adds extra work and no addition benefit (except pushing the agents margins up so we get less)

Also the agency already has a list of "approved" umbrella companies that contractors can go through, so might insist everyone goes to one of those.

Very standard. If you have a dig through the umbrella threads and some in the IR35 ones you'll see a raft of threads asking for advice on the agenies list and which one to go with. POsts like these
https://www.contractoruk.com/forums/...ml#post2297178

https://www.contractoruk.com/forums/...mbrella-2.html

Given a lot of the contractors are on 12(or at least 6) month contracts, deciding that the contractors would be inside IR35 would be suicide as I and everyone else would head toward the exit well before April 2020.

You'd think so but you are probably going to be surprised. I was on a PS at the time of the changes and I left because of it but I was very surprised how many stayed and are still there. There wasn't the mass exodus everyone predicated. They got an uplift to soften the blow which helped but to local people it may not be worth leaving. There are a good number of people at my current gig who are prepared to stay if they get moved inside as long as there is an uplift. I would have stayed myself to be honest, except they gave me notice this month (Mehhh). A good local gig you enjoy can make the inside determination not the deal breaker you imagine.

Add to that if many other companies go inside they'll be leaving for what? A long sting on the bench with everyone else gunning for a reduced number of outside roles? Possibly not the best business move that.

My contract is up in a 3 months. I'm waiting to see what happens. If nothing by then, I'm either going to leave and try and find somewhere that has got its act together and deemed outside IR35 roles or stay but dissolve my ltd company and go into an umbrella for a while. I have a decent war chest so can take a nice sum out at 10% tax.
.

So you've said yourself you might stay so declaring everyone inside may not be suicide at all.

[JohntheBike]

I've heard the company and the agency(sole provider) are just in consultation. One of the options being discussed is to form a separate entity(company) for all the contractors to work through, so assuming an umbrella type model.

Also the agency already has a list of "approved" umbrella companies that contractors can go through, so might insist everyone goes to one of those.

Given a lot of the contractors are on 12(or at least 6) month contracts, deciding that the contractors would be inside IR35 would be suicide as I and everyone else would head toward the exit well before April 2020.

My contract is up in a 3 months. I'm waiting to see what happens. If nothing by then, I'm either going to leave and try and find somewhere that has got its act together and deemed outside IR35 roles or stay but dissolve my ltd company and go into an umbrella for a while. I have a decent war chest so can take a nice sum out at 10% tax.

Also looking at creating another company with friends, but that's discussed elsewhere here.

thanks for this. All I've heard through the grapevine from my client is that they are considering the issues carefully. I'll just have to wait and see what transpires.

[BABABlackSheep]

have you seen or heard anything which leads you to believe this? It may be that others might observe similar patterns with their clients and take this into account when assessing their future.

I've heard the company and the agency(sole provider) are just in consultation. One of the options being discussed is to form a separate entity(company) for all the contractors to work through, so assuming an umbrella type model.

Also the agency already has a list of "approved" umbrella companies that contractors can go through, so might insist everyone goes to one of those.

Given a lot of the contractors are on 12(or at least 6) month contracts, deciding that the contractors would be inside IR35 would be suicide as I and everyone else would head toward the exit well before April 2020.

My contract is up in a 3 months. I'm waiting to see what happens. If nothing by then, I'm either going to leave and try and find somewhere that has got its act together and deemed outside IR35 roles or stay but dissolve my ltd company and go into an umbrella for a while. I have a decent war chest so can take a nice sum out at 10% tax.

Also looking at creating another company with friends, but that's discussed elsewhere here.

[JoJoGabor]

I've been interested to follow a few discussions on here about Clients approach, potential impacts and 'solutions' to OPR, I wanted to share my experience from speaking to end clients over the past few months.

I've now met with c.75% of our client base at least once and I've thus far only spoken to one client who has been 100% that the contractors they're using will be inside IR35 from next year (and they should be inside now).

There are some clients whose contractors are likely on the edge and every one of them has been comfortable with making some changes to make a clear outside status determination possible.

I've not spoken to a client who has wanted to use any form of blanket determination (though every client is of the view that contractors in the main will logically have the same status).

They are consistently saying that contractors are fundamentally valuable and important to the business and they see a robust approach that minimises risk and retains the ability to use contractors as the correct approach.

This is completely different to the public sector, all of those clients have had a blanket type approach - generally assume they're inside and if it's a problem then re-think that based on the importance of the project.

I've also seen a difference from enterprise level clients - there is much more fear around the risk from them and a follow the leader type approach where they're all waiting for one another to declare their approach.

I've seen some comments about agency fees going up or contractor rate being squeezed. I can't speak for every Agency (thank goodness!) but those I speak to are seeing this as an opportunity to help clients continue to engage contractors and to justify the fee, not to increase them.

I'm not in favour of the changes and I can see some negative impacts but in the main the past couple of months of speaking to clients have left me feeling more positive about the impact.

That sounds reassuring, I'm starting to ask around a bit too and seems a fair chunk of clients are doing things properly and defining quite a few of their roles outside of IR35. Can I ask what field you are in to get this view?