Small Company Exemption

[ladymuck]

You said that there was a lot of scaremongering going on. True if your client is small or you are switching client in Feb/March. Or you are staying with client and they are declaring you outside April onwards. Otherwise it's not scaremongering. HMRC see you as sitting ducks.

And then you stopped reading.

I'm not saying there's aren't risks but they're being peddled as facts and as events that are definitely going to happen to everyone.

The way you talk is like absolutely everyone is going to be screwed over and that is not true and it makes people panic and do stupid things.

But, hey, you know more than me. I guess you must work at HMRC and have the inside track on their plans for you to have such certainty.

[NeedTheSunshine]

Don't want to scare people but despite the exclusion hmrc might put more effort into looking if someone is truly outside. Client and agent conveniently, might not care, as the responsibility has shifted.

Why would they do that? They'll have a raft of people going outside to umbrella/perm at the same client. I know several. Generic letter sent out. Job done. Anyone who wants to go to tribunal can but that costs ££££, drags on for years and if HMRC win then they'll use it to sweep up all the former contractors at the same company who are now umbrella/perm. It's a no brainer. Even easier than the loan charge.

The client and agent won't care. Not their responsibility.

How many people affected by the changes will be going to the protest next week? If you don't make some noise then no changes will get made.

[NeedTheSunshine]

That wasn't what I said.

Never mind.

You said that there was a lot of scaremongering going on. True if your client is small or you are switching client in Feb/March. Or you are staying with client and they are declaring you outside April onwards. Otherwise it's not scaremongering. HMRC see you as sitting ducks.

[jamesbrown]

Don't want to scare people but despite the exclusion hmrc might put more effort into looking if someone is truly outside. Client and agent conveniently, might not care, as the responsibility has shifted.

In terms of outside contracts, there are two things changing in April. One is that there will be fewer of them and more of them will be at small companies. Another is that the client is perfectly aligned with the contractor. One of those things may increase risk (fewer people to investigate), but the cost/benefit is also smaller (more individual investigations). The other clearly reduces risk (client aligned). Attention then moves to investigations of outside --> inside contracts at the same large client/agent, large companies with a high fraction of outside contracts, and nudge letters to large clients in general.

So, overall, I'd say it's the opposite of what you're suggesting.

[ladymuck]

Ask the loan charge folk how their dealings with HMRC are going. There's a reason HMRC have been collecting data. Anyone changing client is fine. Anyone going from outside to umbrella/perm at the same client is going to be on the list. Generic letter going out in brown envelopes sooner or later. And HMRC aren't fast acting. It's easy money from low hanging fruit. Remember how lots of people were optimistic that the public sector rules wouldn't be rolled out to the private sector? It was inevitable.

That wasn't what I said.

Never mind.

[GigiBronz]

Sorry about that I should rephrase:
There will be a small pool of people, self declared outside. If they want to take action, with same allocated resource it is a higher probability to reach those individuals.
Caution should be the word, working practices, contract reviewed etc insurance if still available.
Until we see someone pioneering an outside contract, more widespread adoption we don’t know how hmrc will react post April.

If they decide to look into the ones ouside-inside in same role, that should be an easy fight as client is serving them on a platter. Round of letters and it’s all sorted.

[NeedTheSunshine]

I can't help but think that there's a heck of a lot of scaremongering going on. A friend mine was messaging me, stressing over everything they're reading about all the companies making blanket declarations, HMRC sending threatening letters to companies etc.

Some of it is true. Some of it is heresay. There's a very fine line between causing panic and being informative.

Ask the loan charge folk how their dealings with HMRC are going. There's a reason HMRC have been collecting data. Anyone changing client is fine. Anyone going from outside to umbrella/perm at the same client is going to be on the list. Generic letter going out in brown envelopes sooner or later. And HMRC aren't fast acting. It's easy money from low hanging fruit. Remember how lots of people were optimistic that the public sector rules wouldn't be rolled out to the private sector? It was inevitable.

[ladymuck]

I can't help but think that there's a heck of a lot of scaremongering going on. A friend mine was messaging me, stressing over everything they're reading about all the companies making blanket declarations, HMRC sending threatening letters to companies etc.

Some of it is true. Some of it is heresay. There's a very fine line between causing panic and being informative.

[NeedTheSunshine]

Don't want to scare people but despite the exclusion hmrc might put more effort into looking if someone is truly outside. Client and agent conveniently, might not care, as the responsibility has shifted.

HMRC are going to be busy dealing with the inside to umbrella/permie people for the time being. I'd go with a small company for a while but be fully aware that the exemption will be going soon

[GigiBronz]

Don't want to scare people but despite the exclusion hmrc might put more effort into looking if someone is truly outside. Client and agent conveniently, might not care, as the responsibility has shifted.

[LondonManc]

It's very simple. Where the end-client meets two or more of the above criteria, responsibility for determining the IR35 status of a contract remains with ContractorCo and the changes do not apply.
This doesn't mean that IR35 doesn't apply at all, simply that the new changes do not apply - you may still be inside if you're simply a project admin type doing the bidding of a few PMs.

[Lance]

Hi All,

First post so hello and I'm just doing some more reading around this subject.

I just had a conversation with a recruiter about some work and he was claiming that if the clients turnover is less than £10.2 million it is automatically outside IR35.

The three possible exemption clauses are:

Annual turnover is no more than £10.2 million
Balance sheet total is no more than £5.1 million
No more than 50 employees.

To my mind this doesn't automatically make it outside IR35, it means my client doesn't have to do the SDS, I do.

Surely then I can just ensure the contract is sound in terms of being outside IR35 and life goes on as normal?

Or am I being overly simplistic here?

BTW Guys, thank you for a brilliant resource on this subject. I've been reading this forum for a few days on and off now and it's really good stuff in here.

Thanks,

James

You are correct in that it isn’t automatically outside. It’s you that makes the determination.
For this there is no change to the status quo.

[northernladuk]

You are correct and quite right to question the garbage agents come out with.

Just be aware thst the small business exemption could be the next thing that is removed in future.

[jammer]

Hi All,

First post so hello and I'm just doing some more reading around this subject.

I just had a conversation with a recruiter about some work and he was claiming that if the clients turnover is less than £10.2 million it is automatically outside IR35.

The three possible exemption clauses are:

Annual turnover is no more than £10.2 million
Balance sheet total is no more than £5.1 million
No more than 50 employees.

To my mind this doesn't automatically make it outside IR35, it means my client doesn't have to do the SDS, I do.

Surely then I can just ensure the contract is sound in terms of being outside IR35 and life goes on as normal?

Or am I being overly simplistic here?

BTW Guys, thank you for a brilliant resource on this subject. I've been reading this forum for a few days on and off now and it's really good stuff in here.

Thanks,

James