Reply to: HMRC announces change to the off-payroll working rules

[eek]

Is this true?

No

[Paralytic]

Is this true?

No

[ContractingBrit]

So if I get a 24 month renewal now I'm good for 2 years

Is this true?

[Unix]

So if I get a 24 month renewal now I'm good for 2 years

[ComplianceLady]

what is your perception of what will happen about contracts which continue after April and which started prior to April? Is there any substance in the report that these contracts won't be subject to the new rules?

Nope - nothing that I've seen. I do think we might see a GDPR style enforcement edict from the HOL review i.e. if you're trying to comply and can be seen to be doing so we won't come down on you so hard but I don't see how that can be squared with a liability being accrued. Just my feeling though.

[eek]

A week ago we didn't know how payments made after 6 April for work before then would be handled. We still don't know if CEST will be tweaked as a result of the reviews.

We did know how it was going to work last week - it was just going to be a very serious clusterf**k which meant it had to be changed to something that required a lot less work.

[eatenrifles]

It's not surprising that the Torygraph might get something wrong on this, but when a publication for accountants gets it badly wrong less than two months before going live, it's obvious that it's been badly mishandled.

Worth noting the Accountancy Daily article has been corrected from:

The government has confirmed that the rules will not be retrospective and changes to the operation of the off-payroll working rules will only apply to payments made for services provided on or after 6 April 2020, and will not be applied to contract work which is ongoing, for example a six-month contract which started in December 2019.

To:

The government has confirmed that the rules will not be retrospective and changes to the operation of the off-payroll working rules will only apply to payments made for services provided on or after 6 April 2020.

This means that the new rules will only affect the contract from 6 April and would not affect the pre-April 2020 element of the contract.

The government reversal means that the rules for medium and large organisations will take effect for work conducted from 6 April 2020 only.

[WordIsBond]

It makes sense for the change to occur at the beginning of the tax year.

Can you imagine the scare stories and untruths we would be seeing if the implementation date was November rather than April.

And while I know it's all going to hell in a handcart at least the experiment will finish soon and a suitable fix rapidly identified for those that need it.

It might make sense for it to occur at the beginning of the 2021-2022 tax year. But really, there's no reason it absolutely has to happen at the beginning of a tax year. Thousands of times, people have gone perm mid-tax year. Thousands of times, they've moved into umbrella roles mid-year. There is nothing complex about switching from outside to inside or vice verse mid-year. It didn't have to align with the tax year.

People are making panic-driven decisions in part because we don't even know exactly what the rules will be. We don't know how it works if you have an overseas client with no UK presence in the chain. We don't know if the contractor has any obligation to communicate with the client about it in such a case.

A week ago we didn't know how payments made after 6 April for work before then would be handled. We still don't know if CEST will be tweaked as a result of the reviews.

It's not surprising that the Torygraph might get something wrong on this, but when a publication for accountants gets it badly wrong less than two months before going live, it's obvious that it's been badly mishandled.

[eek]

Time to get an accountant that doesn't take everything at face value that he reads in Accountancy Daily.

But really, it's not entirely his accountant's fault. It's the fault of the people who are inflicting massive upheaval on an industry without even having legislated the upheaval, less than two months before it all blows up.

This 'reform' is half-witted and half-baked, but if it really had to happen, the legislation for it should have been passed into law by November at the latest, so that accountants would have plenty of time to figure it out.

When the political situation blew up and the budget had to be delayed, this should have been delayed as well. They COULD have simply delayed it six months, they wouldn't even have to wait an entire year, so that preparations could be made with actual legislation in place.

It makes sense for the change to occur at the beginning of the tax year.

Can you imagine the scare stories and untruths we would be seeing if the implementation date was November rather than April.

And while I know it's all going to hell in a handcart at least the experiment will finish soon and a suitable fix rapidly identified for those that need it.

[WordIsBond]

A contractor colleague of mine has just been advised by his accountant to send this to his agency:

Time to get an accountant that doesn't take everything at face value that he reads in Accountancy Daily.

But really, it's not entirely his accountant's fault. It's the fault of the people who are inflicting massive upheaval on an industry without even having legislated the upheaval, less than two months before it all blows up.

This 'reform' is half-witted and half-baked, but if it really had to happen, the legislation for it should have been passed into law by November at the latest, so that accountants would have plenty of time to figure it out.

When the political situation blew up and the budget had to be delayed, this should have been delayed as well. They COULD have simply delayed it six months, they wouldn't even have to wait an entire year, so that preparations could be made with actual legislation in place.

[eatenrifles]

This. Anyone who is reading HMRCs latest update to mean that the IR35 won't apply to the entirety of any contract started before the new tax year need to attend a training course in basic English comprehension.

It's clear it is applying to all services provided in the new tax year.

A contractor colleague of mine has just been advised by his accountant to send this to his agency:

In regard to last week’s reprieve from the Government, in that the new rules will only apply to contracts starting after 6th April 2020 can you confirm whether there is any appetite to issue a contract starting on or before 5th April for 6 months which could then be outside the new rules for a further 6 months. This would take contracts past this years’ budget date when further clarification on the new IR35 rules and their implementation.

The spread of misinformation is getting out of hand.

[Paralytic]

There is no such proposal. Stop reading everything on the internet as though it's true.

The draft bill has simply shifted the effect of the legislation to be against work done on or after 6th April rather than for payments due on or after the 6th April.

This. Anyone who is reading HMRCs latest update to mean that IR35 won't apply to the entirety of any contract started before the new tax year needs to attend a training course in basic English comprehension.

It's clear it is applying to all services provided in the new tax year.

[Lance]

what I was suggesting is that this apparent proposal which seems to indicate that contracts entered into prior to April which run past April, will not be subject to the rules, is likely to be "clarified" or removed, if HMRC realise that it could be used as a loop hole. My contract is up for renewal on the 1st of April for example and I would seek to use it if necessary, if it were still in force.

There is no such proposal. Stop reading everything on the internet as though it's true.

The draft bill has simply shifted the effect of the legislation to be against work done on or after 6th April rather than for payments due on or after the 6th April.

[JohntheBike]

KUATB. There won't be any tweaks. There won't be any backtracking. There is a draft bill. Which will either become law as-is, or if there are any changes they won't be complex, they'll be "rip that section out".
Bear in mind that they are working an a final bill, that matches the budget speech, for which they have very little time.....

what I was suggesting is that this apparent proposal which seems to indicate that contracts entered into prior to April which run past April, will not be subject to the rules, is likely to be "clarified" or removed, if HMRC realise that it could be used as a loop hole. My contract is up for renewal on the 1st of April for example and I would seek to use it if necessary, if it were still in force.

[Lance]

you are probably right. But they'd have to stop this prior to April 6th. However, I guess there will be further "clarification" or backtracking of the rules before then.

KUATB. There won't be any tweaks. There won't be any backtracking. There is a draft bill. Which will either become law as-is, or if there are any changes they won't be complex, they'll be "rip that section out".
Bear in mind that they are working an a final bill, that matches the budget speech, for which they have very little time.....

March 11th is budget day. They they have 3 weeks to get finance bill passed through both houses.

One thing is for sure. There’s not enough time for radical changes to the draft bill.