Reply to: IR35 deductions - breach of contract

[eek]

I'm really surprised that no one has yet attempted this, particularly when you consider the bills that some BBC presenters are faced with.

This is so off topic that I really should be replying to it.

The reason why you wouldn't use an employment tribunal is that you wouldn't do that until all appeals on the tax side of things have been completed and you have a final determination.

I don't believe anyone has got to that absolute final determination yet.

[JohntheBike]

you perceiving it as a good strategy for you is not the same as it being good advice for others.

I accept that. All I'm trying to do, and have always tried to do, is to make people aware of possible choices or avenues of approach. Clearly each person's circumstances are unique and they must make up their own minds what is the best course of action for them. If you were not aware of some issue in life which would have been advantageous to you, I guess you and many would say "I wish I'd known that, I could have done -"

HMRC consistently say that being subject to IR35 in the FTT doesn't automatically assign employment rights. That is correct, but it is propaganda. If the factors used in the FTT are the same as would be used by the ET, and I've asked that question several times, but received no answer, then it is likely that an ET would come to the same conclusion as the FTT. HMRC's propaganda tries to conceal that principle.

I cannot see that an ET would come to a different conclusion even if it were purely for political reasons, i.e. one court wouldn't want to come to a different conclusion to the other. But granted, adopting such a strategy would depend entirely on the individuals' personal circumstances. I'm really surprised that no one has yet attempted this, particularly when you consider the bills that some BBC presenters are faced with.

[Lance]

Not so, litigation has been very profitable for me. In any event, each individual will need to decide their own strategy.

you perceiving it as a good strategy for you is not the same as it being good advice for others.

[JohntheBike]

Don't do this.
JtB is very quick to give legal advice from a position of very little (**** all) knowledge. Mostly it consists of litigation which is very inadvisable.

Not so, litigation has been very profitable for me. In any event, each individual will need to decide their own strategy.

[Lance]

yes, but there is still the issue of deductions in April 2020 for work done in March under the existing contract. Posters here claim that most outfits in the public sector ensured that payments for work done in March were made before the 6th of April. I can't see that the sector was that efficient. There must have been some who were subject to this. I'd be contemplating a small claims court action.

Don't do this.
JtB is very quick to give legal advice from a position of very little (**** all) knowledge. Mostly it consists of litigation which is very inadvisable.

Nope, it's worth asking now what the plan is otherwise you may need to leave early.

You don't want your final payment to be attached to a notice to HMRC from the client we thought he was inside IR35 all the time.

This has partially answered another newbie question.

The other day I told the boss I don't want the company to make a determination and I will leave the contract early (end Feb) - they seem sympathetic and agreed with my plan (but who knows what the company will say to that).

Is my request even necessary if I'm leaving within the self assessed period?

[JohntheBike]

I have a 'gentlemans agreement' with the consultancy I work via to settle March before 5 April if the client makes an inside determination. Normal payment terms are 30 days.

My PO runs out on 20th March anyway.

yes, the determination is the key. My client, through Qdos, is in the process now of assessing the contracts. I'm keeping my head down for the moment and waiting to see what transpires. Abbey Tax has assessed my contract as outside, so I hope Qdos will come to the same conclusion.

[eek]

ok, thanks. So I guess its worth asking nearer the time what provisions are being made if contracts are up until the end of March, as mine is.

Nope, it's worth asking now what the plan is otherwise you may need to leave early.

You don't want your final payment to be attached to a notice to HMRC from the client we thought he was inside IR35 all the time.

[ladymuck]

ok, thanks. So I guess its worth asking nearer the time what provisions are being made if contracts are up until the end of March, as mine is.

I have a 'gentlemans agreement' with the consultancy I work via to settle March before 5 April if the client makes an inside determination. Normal payment terms are 30 days.

My PO runs out on 20th March anyway.

[JohntheBike]

No because agencies did everything they could to avoid such situations occurring - for fear of unimaginable pain and and a large bill that they themselves would have to foot

ok, thanks. So I guess its worth asking nearer the time what provisions are being made if contracts are up until the end of March, as mine is.

[ComplianceLady]

The current hot topic at industry events is indeed the timing. There is NO WAY an agency will run the risk of having to pay ERNIC on top.

I heard an interesting example yesterday - if the end client deems the contract outside but the agency knows it's false, the agency has to appeal. If the agency does and the client says 'oh yes quite correct' the time between the first decision and the appeal decision the agency is liable for any difference in tax that should have been paid (as long as client took reasonable care).

There are so many ways agencies could be on the hook so they simply will not risk it.

[eek]

so do we know of anyone in the public sector who fell foul of this issue, i.e. had monies paid into their LTD CO. in April for work done in March and had PAYE deducted? I'd guess that before they'd be able to do that, the agency would have to know the NI no. of the contractor and I guess this could be a lever to ensure the agency pays before the 6th of April.

No because agencies did everything they could to avoid such situations occurring - for fear of unimaginable pain and and a large bill that they themselves would have to foot

[JohntheBike]

Agency's are very efficient when the only other option is unimaginable pain and a large bill that they themselves have to foot.

so do we know of anyone in the public sector who fell foul of this issue, i.e. had monies paid into their LTD CO. in April for work done in March and had PAYE deducted? I'd guess that before they'd be able to do that, the agency would have to know the NI no. of the contractor and I guess this could be a lever to ensure the agency pays before the 6th of April.

[eek]

yes, but there is still the issue of deductions in April 2020 for work done in March under the existing contract. Posters here claim that most outfits in the public sector ensured that payments for work done in March were made before the 6th of April. I can't see that the sector was that efficient. There must have been some who were subject to this. I'd be contemplating a small claims court action.

Agency's are very efficient when the only other option is unimaginable pain and a large bill that they themselves have to foot.

[JohntheBike]

Expect your contract to be terminated and a new one with the new payment terms to be provided for you to sign or walk away from.

yes, but there is still the issue of deductions in April 2020 for work done in March under the existing contract. Posters here claim that most outfits in the public sector ensured that payments for work done in March were made before the 6th of April. I can't see that the sector was that efficient. There must have been some who were subject to this. I'd be contemplating a small claims court action.