Reply to: Help - Outside to Outside - Stay or Go ?

[Lance]

“ I am new to this forum and I apologise if some one else have already asked this question before. I am in a similar situation, been working for same number of years for the client outside IR35.

I think you mean that you have made the determination that are outside IR35. You may also have been working outside IR35 for that period, or you may not

I haven’t heard anything yet from my client and waiting to hear from them soon in a weeks time. What if my company blanket ban all the contractors and treat them inside IR35 and to come through umbrella.

they can't ban contractors and treat them as inside. Those two are mutually exclusive.

1. Should I leave the client and look for another job as it would be a high risk?

Would it? That depends on whether you were actually working truly outside IR35

2. Can I still work work through umbrella?

I'm struggling to answer that....... If you can't see why you need to do a LOT more research.

I am struggling to make a decision as I am not clear about the Risks.

Could you all please advise me on this. I would really appreciate it

Not really. If you're not clear about the risks then you don't understand them. If you don't understand them, you can't articulate them, so how could we advise you?

Read the other threads in this forum is the best advise I think.

[LondonManc]

“ I am new to this forum and I apologise if some one else have already asked this question before. I am in a similar situation, been working for same number of years for the client outside IR35. I haven’t heard anything yet from my client and waiting to hear from them soon in a weeks time. What if my company blanket ban all the contractors and treat them inside IR35 and to come through umbrella.

1. Should I leave the client and look for another job as it would be a high risk?

2. Can I still work work through umbrella? I am struggling to make a decision as I am not clear about the Risks.

Could you all please advise me on this. I would really appreciate it

If you're moving from outside to inside and have been there years, probably better to have your current contract and working practices reviewed by QDOS now to determine your real IR35 status rather than your self-declared status. If you then get back an inside determination, you're going to be seen as low-hanging fruit if you stay and accept the blanket inside determination.

You can still work there - the risk is retrospective action.

[Ahmed]

that would be even better.
But as explained earlier, you're going to be at very low risk anyway. Why would HMRC go after you when your client also agrees that you're outside?

“ I am new to this forum and I apologise if some one else have already asked this question before. I am in a similar situation, been working for same number of years for the client outside IR35. I haven’t heard anything yet from my client and waiting to hear from them soon in a weeks time. What if my company blanket ban all the contractors and treat them inside IR35 and to come through umbrella.

1. Should I leave the client and look for another job as it would be a high risk?

2. Can I still work work through umbrella? I am struggling to make a decision as I am not clear about the Risks.

Could you all please advise me on this. I would really appreciate it

[northernladuk]

Yikes

long time nearly 7 years non-stop

Yikes doesn't even cover it!

Don't ask the client to agree your determination. You're asking them to commit to something they don't need to.

Write down the working practises as you see them and ask the client to agree that they are accurate. That way you are simply asking them to confirm that you all agree with the terms of the contract. Much easier for them to swallow that.

With 7 years on the line this wouldn't fill me with enough confidence I could dodge a 200-400k bill.
Unless I got a rock solid outside SDS that I full understand and is water tight I'd be gone... like fast.
But then I don't do 7 years contracts so would have gone already.

And... if a client gave me outside on a 7 year gig I probably wouldn't believe them either TBH. I'd imagine you are so part and parcel the would manipulate the SDS to suit you staying If they ever looked at a similar role that has no contractor in it I'd be willing to bet the determination would be different.

[Paralytic]

Gonna be very hard for HMRC to win against the client. Unless a contractor stitches them up.
The client simply states that they are willing to accept a suitably qualified substitute. As long as that's not a demonstrable falsehood, it's game over.

Yup, agreed, but its oft-said here that HMRC's first targets post-April 2020 will be those clients that have determined people outside.

And some will simply get it wrong, not having taken advice.

Edit to add: Just seen this, which might back up the idea that HMRC will be having a quiet word with those clients who have said they're determining outside

In the case of HMRC looking at this Client (they will be onsite in April for planned audit) and don't find any issues with post April contracts and working practices, people are concerned that they may look at pre-April too and the Client may say it is not their problem.

[LondonManc]

Last question on this.

Thanks. The reason I kept asking the questions around this is because nearly 40 contractors are happy that the client is making an outside assessment and working practices will be genuinely self-employed, but only from end of March/beginning of April. The client is making sure that there will be no issues post April.

In the case of HMRC looking at this Client (they will be onsite in April for planned audit) and don't find any issues with post April contracts and working practices, people are concerned that they may look at pre-April too and the Client may say it is not their problem.

We are trying to get the Client agree that the current working practices are also Outside IR35.. but if they don't want to sign anything ?

Explain to ClientCo that there is no liability on them for the pre-April work and that HMRC would come for the contractor, which is the whole basis of this IR35 change, i.e. after March it will be on the client instead.

[Lance]

Last question on this.

Thanks. The reason I kept asking the questions around this is because nearly 40 contractors are happy that the client is making an outside assessment and working practices will be genuinely self-employed, but only from end of March/beginning of April. The client is making sure that there will be no issues post April.

In the case of HMRC looking at this Client (they will be onsite in April for planned audit)

Yikes

and don't find any issues with post April contracts and working practices, people are concerned that they may look at pre-April too and the Client may say it is not their problem.

We are trying to get the Client agree that the current working practices are also Outside IR35.. but if they don't want to sign anything ?

Don't ask the client to agree your determination. You're asking them to commit to something they don't need to.

Write down the working practises as you see them and ask the client to agree that they are accurate. That way you are simply asking them to confirm that you all agree with the terms of the contract. Much easier for them to swallow that.

[jamesbrown]

Last question on this.
We are trying to get the Client agree that the current working practices are also Outside IR35.. but if they don't want to sign anything ?

Yes, that would be preferable. Absent that, you can only do your own due diligence, which is to retain your contract review and evidence of your WP. Ideally, you would've had something from the client to begin with, such as a Confirmation of Arrangements letter or a completed CEST, but most people won't have that. I don't think you're in a bad position, providing you completed your due diligence. Afterall, you will presumably be doing the same thing in the same way, post-April, so the client has indirectly confirmed your earlier status by confirming your status under the same terms post April. I understand the concern, given the length of contract, but I would say it's significantly less risky than (e.g., a short-term contract) moving from outside to inside with the same client/agent.

[IASRAM]

You are not a low hanging fruit. There are many lower.

Last question on this.

Thanks. The reason I kept asking the questions around this is because nearly 40 contractors are happy that the client is making an outside assessment and working practices will be genuinely self-employed, but only from end of March/beginning of April. The client is making sure that there will be no issues post April.

In the case of HMRC looking at this Client (they will be onsite in April for planned audit) and don't find any issues with post April contracts and working practices, people are concerned that they may look at pre-April too and the Client may say it is not their problem.

We are trying to get the Client agree that the current working practices are also Outside IR35.. but if they don't want to sign anything ?

[Lance]

Perversely, a client determining someone outside (depending on who you believe) could make it more likely that HMRC would investigate that client, because the number of clients with outside determinations after April will be significantly fewer than the number of clients with contractors who self-determine outside today

Of course, if HMRC then find the client has wrongly determined you outside, then the client is liable. But, all of a sudden, you've got a target on your back for the previous 7 years...

Just something to consider.

Gonna be very hard for HMRC to win against the client. Unless a contractor stitches them up.
The client simply states that they are willing to accept a suitably qualified substitute. As long as that's not a demonstrable falsehood, it's game over.

[jamesbrown]

What if the working practices are reflecting a genuine self-employment when HMRC investigates the client post April ? Will they still look at pre-April ?

You are not a low hanging fruit. There are many lower.

[IASRAM]

Of course, if HMRC then find the client has wrongly determined you outside, then the client is liable. But, all of a sudden, you've got a target on your back for the previous 7 years...

Just something to consider.

What if the working practices are reflecting a genuine self-employment when HMRC investigates the client post April ? Will they still look at pre-April ?

[Paralytic]

that would be even better.
But as explained earlier, you're going to be at very low risk anyway. Why would HMRC go after you when your client also agrees that you're outside?

Perversely, a client determining someone outside (depending on who you believe) could make it more likely that HMRC would investigate that client, because the number of clients with outside determinations after April will be significantly fewer than the number of clients with contractors who self-determine outside today

Of course, if HMRC then find the client has wrongly determined you outside, then the client is liable. But, all of a sudden, you've got a target on your back for the previous 7 years...

Just something to consider.

[northernladuk]

On that note,

1) the first 5 years I was using my old LTD which has been closed. Then opened a new one and operating through that LTD so far. Will it matter at all in terms of length of retrospection ?

Opens a new can of worms as to why you closed it. It wouldn't be too difficult to 'pierce the coporate veil' and look at you as a person irrespective of the companies I would imagine. Can't remember how far they go back for IR35 and tax but either way, Christa Ackroyd worked for Look North for 5 years and was liable for £400k tax. She things 200k. The numbers are enough to not worry if it's 5 or 7.
Will they look at 5 or 7? Who knows.

2) my new LTD has two directors (spouse) and we both contract at the same client... for past 2.5 years... is this making the situation even worse ?

IR35 is on a contract by contract basis. This is IR35 101. The fact you don't know this makes me believe even more there isn't a chance you are really outside.
If HMRC have any sense they will spot her on the company books and investigate that as well but I'm only guessing here.

3) my role has also been changed 2 years ago.. not for the sake of it.. it has changed for real both on the paper and in working.

Makes no difference IMO. They will be looking at you as being part and parcel with MoO and Direction and Control strongly in place rather than per gig.

That said HMRC have a spectacular record for screwing up their cases so even if some of the above might be true, HMRC being able to put an argument together that will stand is another thing.

[Lance]

On that note,

1) the first 5 years I was using my old LTD which has been closed. Then opened a new one and operating through that LTD so far. Will it matter at all in terms of length of retrospection ?

Normally an company closde that long would be safe. If you get investigated though, and they realise what you've done they may dig further back.

2) my new LTD has two directors (spouse) and we both contract at the same client... for past 2.5 years... is this making the situation even worse ?

nope.