Reply to: Public sector retrospectively reviewing

[mudskipper]

what I was trying to say is that IPSE themselves could decide to advise the claimant that their case couldn't be supported because it would be unlikely to succeed, thus not passing a claim to the insurers for their opinion.

And what I'm trying to say is that that is steaming male bovine excrement. IPSE do not make claim decisions - they simply pass on the claim to the insurer.

[JohntheBike]

That's just complete bollocks. The idea that IPSE would maliciously or otherwise veto your claim is paranoid delusion. However, if your trust in them is that far eroded, it probably is best that you have found yourself another provider.

what I was trying to say is that IPSE themselves could decide to advise the claimant that their case couldn't be supported because it would be unlikely to succeed, thus not passing a claim to the insurers for their opinion.

and yes, my trust in them had been seriously eroded to the point where I decided not to renew my membership this year. Given that you have no idea of the accumulated details which led me to this conclusion, I guess your opinion has no merit.

[ComplianceLady]

That's the crux really, what is informal today can become very formal tomorrow with the right strategy (with money and resources) in place.

I don't trust HMRC any further than I can throw them on this.

I get that, I think the fact they're all 'on the same side' plays a big part in this. My experience of being on that side was it held much more water what one org said to another, if the other org was in the private sector it was more changeable.

[mudskipper]

...there could always be a chance that IPSE would veto any claim made by a member even before it got as far as the insurers.

That's just complete bollocks. The idea that IPSE would maliciously or otherwise veto your claim is paranoid delusion. However, if your trust in them is that far eroded, it probably is best that you have found yourself another provider.

[cojak]

Kind of yes. The intent at this point is to just switch contracts and HMRC have given an informal nod to the fact they won't pursue the public sector body (as the idea is HMRC didn't have enough time/resource to fully support each body with guidance) but there's no mention of contracts ongoing now that flip from outside to inside that were in place pre-2017 (when the contractor was liable).

That's the crux really, what is informal today can become very formal tomorrow with the right strategy (with money and resources) in place.

I don't trust HMRC any further than I can throw them on this.

[ComplianceLady]

Any links about this? Its quite a sweeping statement.. does the whole of the public sector act in unison like this?

I can't share the detail I'm afraid. I've seen confirmation issued across two specific public sector bodies, within which it was specifically referenced that they have checked that the same process is underway 'across the public sector'. Reference is made to different levels of progression but it is pretty clear that the process is the same across all public sector bodies.

[CheeseSlice]

I'm aware that the public sector have confirmed they have started to re-review the contracts assessed since 2017 with the understanding that those judged outside will be inside.

Any links about this? Its quite a sweeping statement.. does the whole of the public sector act in unison like this?

[ComplianceLady]

I wonder if any re-review with guidance from HMRC will also uncover contracts blanket deemed inside that should be outside. I won't hold my breath on that.

At least the retrospective aspect of active contracts is being covered in that the change of status doesn't affect the contract prior to the new review date due to 'new guidance' from HMRC, so a new contract is offered to differentiate between the old and new status.

Seems fair to me, hopefully they're learning from the fallout of the loan charge retrospective action, and fits with the conceptual practice of not needing to apply a status change mid contract (causing retrospective tax for the period prior to the change) as the contract is terminated and a new one issued.

I wonder if any changes to CEST would also trigger a re-review situation (otherwise what is this 'new guidance'?), and if so how often HMRC are changing CEST to create more work and uncertainty amongst those using it for the initial status determination.

I'm not certain (it's not referenced in the official stuff I've seen) but I get the feeling they are tying the changes in CEST to this 'new guidance' - it's been oft mentioned how can they change CEST and still stand by previous decisions so I think this is how they're dressing that up. That's just my inference though.

I am now considering whether the higher tax levels predicted in Y1 are actually due to most contracts being inside and they drop off in Y2 due to a predicted drop in contracting. Previously I thought they were looking at historical gains but I'm not as sure. Looking at the Queen's Speech, whilst brief, it does seem to indicate a desired progression towards 1 form of 'work' in all aspects.

[JohntheBike]

Why do you think that I’ve stuck with IPSE for the last 4 years and will do so for the next 2?

I was a member for almost 20 years, but didn't renew this year. I've bought IR35 investigation insurance directly. However, what I learnt and hadn't realised, is that the legal insurance policy holder is IPSE itself. So, there could always be a chance that IPSE would veto any claim made by a member even before it got as far as the insurers. Given my acrimonious relationship with IPSE, that was a possibility that I couldn't risk. The additional perks that were being offered were of little use to me. I'm now the policyholder, so that scenario doesn't exist any more.

[Hobosapien]

I wonder if any re-review with guidance from HMRC will also uncover contracts blanket deemed inside that should be outside. I won't hold my breath on that.

At least the retrospective aspect of active contracts is being covered in that the change of status doesn't affect the contract prior to the new review date due to 'new guidance' from HMRC, so a new contract is offered to differentiate between the old and new status.

Seems fair to me, hopefully they're learning from the fallout of the loan charge retrospective action, and fits with the conceptual practice of not needing to apply a status change mid contract (causing retrospective tax for the period prior to the change) as the contract is terminated and a new one issued.

I wonder if any changes to CEST would also trigger a re-review situation (otherwise what is this 'new guidance'?), and if so how often HMRC are changing CEST to create more work and uncertainty amongst those using it for the initial status determination.

[ComplianceLady]

But that's going to be based on HMRC's biased view of IR35 - the case laws hasn't changed. Surely somebody at some point is going to challenge this inside review in the courts.

There isn't a mechanism to do so as far as I'm aware. You can challenge HMRC giving a retrospective decision by refusing to pay and going to court but if they deduct tax at source for a new contract I'm not sure how it can be challenged?

[BoredBloke]

But that's going to be based on HMRC's biased view of IR35 - the case laws hasn't changed. Surely somebody at some point is going to challenge this inside review in the courts.

[ComplianceLady]

This gives the impression that there will be no retrospective consequences if you are forcibly flipped outside -> inside. Did I understand that correctly?

Kind of yes. The intent at this point is to just switch contracts and HMRC have given an informal nod to the fact they won't pursue the public sector body (as the idea is HMRC didn't have enough time/resource to fully support each body with guidance) but there's no mention of contracts ongoing now that flip from outside to inside that were in place pre-2017 (when the contractor was liable).

I'm not sure how many there'd be and how palateable pursual would be for HMRC either commercially or legally.

I didn't and don't see the risk as being retrospective pursuit of tax, the main take I got from it was that it seems all those public sector clients that did case by case assessments and have contractors working outside are being 'corrected' and told that they're aligned with all other public sector clients plus private sector (thus allaying fears of contractors moving en masse). Seems like a strategic move in my view.

[TwoWolves]

This gives the impression that there will be no retrospective consequences if you are forcibly flipped outside -> inside. Did I understand that correctly?

[cojak]

What's irksome about this is that anyone who had IR35 tax investigation for a previous period and who did not have it now, then they couldn't claim. It almost means that you'd have to maintain such insurance for the maximum period that HMRC could investigate retrospectively for.

Why do you think that I’ve stuck with IPSE for the last 4 years and will do so for the next 2?