Reply to: Here's a thing...

[SouWester]

The part I found most interesting about the article is that he got his law qualification from Dunelm. They seem to sell pretty much everything but I never expected that.

They do a fine range of mattress protectors, perfect for when HMRC tulips the bed.

[LondonManc]

The part I found most interesting about the article is that he got his law qualification from Dunelm. They seem to sell pretty much everything but I never expected that.

It could be a cover up......

[Snooky]

CEST assessment rejected by judge as contractor recoups unlawfully deducted tax

Apologies if posted elsewhere.

The part I found most interesting about the article is that he got his law qualification from Dunelm. They seem to sell pretty much everything but I never expected that.

[eek]

Hint: ClientCo can afford better lawyers than PSC

Yep but the payoff is £bns once HMRC have won the first case - might be worth it.

And the issue here is that IR35 doesn't solve the gig economy fake self-employment racket and that's what the end game is about because the obvious approach of moving employer NI into income tax can't occur, it has to be hidden.

[LondonManc]

True, but if HMRC want money which side is more likely to pay up - the large firm that while it will fight is fighting over a very large sum of money or the individual against a PSC that has already closed.

While in theory it's the latter - to HMRC the former is a far easier target to hit (and one we've never even thought about#)..

Hint: ClientCo can afford better lawyers than PSC

[eek]

Pre-April, it's not the client's determination, it's the contractor's. The liability is therefore with the MyCo, not the ClientCo. While I understand your point, I cannot see it happening. That said, clients who don't get IR35 will have brought this upon themselves if they do get stiffed.

True, but if HMRC want money which side is more likely to pay up - the large firm that while it will fight is fighting over a very large sum of money or the individual against a PSC that has already closed.

While in theory it's the latter - to HMRC the former is a far easier target to hit (and one we've never even thought about#)..

[LondonManc]

I don't think it's moot -

1) remember our biggest concern is retrospective action.
2) Barristers have to have some reason beyond asking for money for saying this thing is plausible.
3) If the client is saying that post April the contractor is inside what changed before - if the client think he is inside, surely he always been inside and therefore Employer NI (if no else) is due. That to me sounds like a case HMRC could more profitably chase compared to individual contractors..

Pre-April, it's not the client's determination, it's the contractor's. The liability is therefore with the MyCo, not the ClientCo. While I understand your point, I cannot see it happening. That said, clients who don't get IR35 will have brought this upon themselves if they do get stiffed.

[eek]

Point 1 is moot - it wasn't a ClientCo determination beforehand.

There are several options here though:

• The client could/should significantly change the contract
• The client could/should significantly change the working practices
• The contractor could/should alter their working practices

Not only that, but if a contractor has a QDOS reviewed contract and working practices from before, then there's little issue, especially if those working practices are signed off by the client.

As has been said elsewhere, though, it looks like clients will simply abdicate all future responsibility on engagement of PSCs. The model is deda except for those specialists who should have been outside all along and will remain so. I would expect outside contracts and inside FTCs to be the future operating model.

I don't think it's moot -

1) remember our biggest concern is retrospective action.
2) Barristers have to have some reason beyond asking for money for saying this thing is plausible.
3) If the client is saying that post April the contractor is inside what changed before - if the client think he is inside, surely he always been inside and therefore Employer NI (if no else) was due. That to me sounds like a case where HMRC could more profitably chase companies (we have 700 other cases to take into account) compared to individual contractors..

[Paralytic]

No, but I'll bet he'd have a few interesting tales to tell us about his experiences if he was a member here!

I imagine an experience like that might send you a bit crazy and you'd end up posting about it all the time, so it is probably best that that does not happen.

[Snooky]

I also notice reference to a 2002 case with for John Williams. Does anyone know whatever happened to him?

No, but I'll bet he'd have a few interesting tales to tell us about his experiences if he was a member here!

[LondonManc]

Point 1 is a nasty one there that even I hadn't thought about...

Point 1 is moot - it wasn't a ClientCo determination beforehand.

There are several options here though:

• The client could/should significantly change the contract
• The client could/should significantly change the working practices
• The contractor could/should alter their working practices

Not only that, but if a contractor has a QDOS reviewed contract and working practices from before, then there's little issue, especially if those working practices are signed off by the client.

As has been said elsewhere, though, it looks like clients will simply abdicate all future responsibility on engagement of PSCs. The model is deda except for those specialists who should have been outside all along and will remain so. I would expect outside contracts and inside FTCs to be the future operating model.

[eek]

This was brought up in the latest round of the HoL committee, I think by the meeja person.

If HMRC goes after the employer, the employer will then seek to recoup the costs from the contractor, who might have closed his LtdCo by this time.

How?

This is HMRC chasing the agency / end client for money from a contract that finished in say March 2020 and was signed in April 2019. You would be very hard pushed to transfer employment NI down to the contractor as there would be nothing in that contract that could be used - and while I know there are transfer conditions appearing in newer contracts the terms I've seen would probably be thrown out of court as you can't contract for something that isn't legal.

[SimonMac]

Point 1 is a nasty one there that even I hadn't thought about...

This was brought up in the latest round of the HoL committee, I think by the meeja person.

If HMRC goes after the employer, the employer will then seek to recoup the costs from the contractor, who might have closed his LtdCo by this time.

[SimonMac]

CEST assessment rejected by judge as contractor recoups unlawfully deducted tax

Apologies if posted elsewhere.

They have updated CEST to v2 since then, so in HMRC's view problem solved

[ladymuck]

IR35 - Risk to Client / Business

"The IR35 test is the same test as the common law test for employment."

Thanks for sharing that, I hadn't seen it. Definitely food for thought. Simply written but not a simple topic.