Reply to: Blanket IR35 Determination / "HR Policy Against PSC's"

[GhostofTarbera]

I just want to be able to sleep at night with no issues of retro checks but I guess the onus is on the client to determine my status, not me.

I think a lot of clauses in contracts vs WPs are potentially hear say, especially where sub is concerned. If you're a key man on a project and are balls deep in it, then one day you need to go away for whatever reason, are the client really going to be open / happy with you supplying someone whose never set foot in the door before or has had no input to said project - always easier said than done.

Liability on client after April

Sleep easy


Sent from my iPhone using Contractor UK Forum

[CompoundOverload]

If they use it, it comes outside and the give you a written determination the gig is outside then away you go.

I'm still skeptical about the situation if you get on site and find it's not, I. E. They won't let you sub when they said you could on CEST but the greater voice says its their problem not yours.

I just want to be able to sleep at night with no issues of retro checks but I guess the onus is on the client to determine my status, not me.

I think a lot of clauses in contracts vs WPs are potentially hear say, especially where sub is concerned. If you're a key man on a project and are balls deep in it, then one day you need to go away for whatever reason, are the client really going to be open / happy with you supplying someone whose never set foot in the door before or has had no input to said project - always easier said than done.

[northernladuk]

Had I have been asked to complete CEST myself, I would have refused to hence my point in the initial post about it having a lot of critics, so I wanted to know if it had any bearing when the client does/did it themselves with an outside determination.

If they use it, it comes outside and the give you a written determination the gig is outside then away you go.

I'm still skeptical about the situation if you get on site and find it's not, I. E. They won't let you sub when they said you could on CEST but the greater voice says its their problem not yours.

[CompoundOverload]

Yep I assumed the same. I just don't like it when contractors run it themselves and are convinced it's gospel so wanted to make the point.

Had I have been asked to complete CEST myself, I would have refused to hence my point in the initial post about it having a lot of critics, so I wanted to know if it had any bearing when the client does/did it themselves with an outside determination.

[CompoundOverload]

I assumed it was the client doing it given



and the way the rest of the post shows a lack of knowledge

Not sure if you're asking me if the client did this or not. Yes they did, I did not do complete the CEST assessment, it was the client. They did a similar review in Feb last year before it got put back another year, and again that showed as an outside assessment.

[northernladuk]

I assumed it was the client doing it given



and the way the rest of the post shows a lack of knowledge

Yep I assumed the same. I just don't like it when contractors run it themselves and are convinced it's gospel so wanted to make the point.

[eek]

Absolutey but IMO this is only if the client has done it as in this case. When contractors run it themselves I wouldn't trust the determination as far as I can spit as its the contractors view on a perfect engagement which is rarely how the client would see it.

I assumed it was the client doing it given

However, HR / tax team have advised that I am out of scope for IR35 based on their "SDS". But what worries me is that their decision is based upon the CEST tool result. Is this something I can rely on as I know that there is a lot of criticism of this and would this meet the "reasonable care test"?

and the way the rest of the post shows a lack of knowledge

[northernladuk]

The CEST tool is biased towards inside verdicts - if CEST is saying you are outside you really our outside.

Absolutey but IMO this is only if the client has done it as in this case. When contractors run it themselves I wouldn't trust the determination as far as I can spit as its the contractors view on a perfect engagement which is rarely how the client would see it.

[eek]

Interested in this thread as I've been advised by my client that I am being kept on after April (outside) - currently been with the client since Dec 2019, via my Ltd.

They are a reasonably sized house and don't have many contractors on site. I think I'm probably one of about four in the UK business. This bodes well as I've placed myself quite nicely in that if I was to leave they would struggle to find a quick replacement, which they are aware of(due to skillset and how they hire, they are very fussy- I had three interviews for the gig!).

However, HR / tax team have advised that I am out of scope for IR35 based on their "SDS". But what worries me is that their decision is based upon the CEST tool result. Is this something I can rely on as I know that there is a lot of criticism of this and would this meet the "reasonable care test"?

I am with them via an agency, so if I accept and run with this into the new tax year am I covered for any retro action if they have got it wrong, or will the agency pass this on to me? Also, do I also open myself to be looked into for the work prior to the extension where I deemed myself outside IR35 (having had contract etc reviewed and given thumbs up by Qdos - with insurance)?

Or would it be best to jump ship and seek another gig.. but the market at the moment is quite slow.

Any thoughts / advice would be highly appreciated.

The CEST tool is biased towards inside verdicts - if CEST is saying you are outside you really our outside.

[CompoundOverload]

The main risk is for those who continue at the same contract, who self-classed as "outside" via PSC but now the client is forcing them to work either inside, or via umbrella/PAYE model due to the mass hike in NI payments (and likely income tax).

Interested in this thread as I've been advised by my client that I am being kept on after April (outside) - currently been with the client since Dec 2019, via my Ltd.

They are a reasonably sized house and don't have many contractors on site. I think I'm probably one of about four in the UK business. This bodes well as I've placed myself quite nicely in that if I was to leave they would struggle to find a quick replacement, which they are aware of(due to skillset and how they hire, they are very fussy- I had three interviews for the gig!).

However, HR / tax team have advised that I am out of scope for IR35 based on their "SDS". But what worries me is that their decision is based upon the CEST tool result. Is this something I can rely on as I know that there is a lot of criticism of this and would this meet the "reasonable care test"?

I am with them via an agency, so if I accept and run with this into the new tax year am I covered for any retro action if they have got it wrong, or will the agency pass this on to me? Also, do I also open myself to be looked into for the work prior to the extension where I deemed myself outside IR35 (having had contract etc reviewed and given thumbs up by Qdos - with insurance)?

Or would it be best to jump ship and seek another gig.. but the market at the moment is quite slow.

Any thoughts / advice would be highly appreciated.

[drob1984]

Nope as every contract is different and requires an individual investigation.

The only edge case would be long running contract that the client decides is outside in April 21 and HMRC argues that it is inside (and wins). But that is very unlikely.

The main risk is for those who continue at the same contract, who self-classed as "outside" via PSC but now the client is forcing them to work either inside, or via umbrella/PAYE model due to the mass hike in NI payments (and likely income tax).

[eek]

Very fair point, the burden is on the end-client.

Though... no doubt agencies etc will have clauses in the contract along the lines of any such remedial fine or action by HMRC would have to be paid for by the contractor/consultancy business etc. Plus, in my mind, with less "outside" engagements, it'll be easier for HMRC to see those who are outside and surely, even if the client has to pick up the bill this time, the fact they used your PSC for a service, doesn't that then open up your PSC further for retrospective investigation for contracts prior to the updated off-payroll legislation taking effect?

Nope as every contract is different and requires an individual investigation.

The only edge case would be long running contract that the client decides is outside in April 21 and HMRC argues that it is inside (and wins). But that is very unlikely.

[drob1984]

Nope anyone outside Ir35 (as a contractor) won't have much to worry about as the responsibility is at the end client level

Very fair point, the burden is on the end-client.

Though... no doubt agencies etc will have clauses in the contract along the lines of any such remedial fine or action by HMRC would have to be paid for by the contractor/consultancy business etc. The first PAYE contract that was sent my way (which I rejected altogether) had this in it. Plus, in my mind, with less "outside" engagements, it'll be easier for HMRC to see those who are outside and surely, even if the client has to pick up the bill this time, the fact they used your PSC for a service, doesn't that then open up your PSC further for retrospective investigation for contracts prior to the updated off-payroll legislation taking effect?

In addition, if you've been at the client say 1 year, 2 years, or whatever it is, even if the burden is now "on them", the time prior to April 2021 is on you/your PSC. When I did the calculation last year, based on a day rate of mid 500s, it worked out at approx £1k a month. So 18 months = £18K of tax to be paid.

[eek]

Reminds me of a thread I was very active in this time last year. Similar thing, PSC ban, PAYE or Umbrella only etc etc.

Ultimately.. same agency, same NI number is submitted to HMRC (yours) but this time via an Umbrella/PAYE as opposed to PSC. As a result, higher NI (or generally you will start to pay NI) for the same role you were doing previously via your PSC. Its a risk and fairly easy to be seen. This wasn't a risk I could sleep with, so I walked from a good contract I was happy with in Feb 2020, then in March the legislation got canned, blanket ban still in-place, caused a lot of upset. I then took a new contract elsewhere in April 2020 (outside via my PSC), not a great contract tbh, but its outside and its gotten me through Covid. Expecting the same conversations to be happening with this contract in the coming weeks and I'll likely have to walk again.

Then I consider... do I just suck it up and take a new gig via Umbrella. Entertain the possibility of being a drone (employee) to an organisation, re-emigrate or seriously look at starting something new, i.e. a takeaway or mobile-based business. I think anyone operating "outside" from April 2021 onwards will be on HMRCs radar like never before.

Nope anyone outside Ir35 (as a contractor) won't have much to worry about as the responsibility is at the end client level

[drob1984]

Reminds me of a thread I was very active in this time last year. Similar thing, PSC ban, PAYE or Umbrella only etc etc.

Ultimately.. same agency, same NI number is submitted to HMRC (yours) but this time via an Umbrella/PAYE as opposed to PSC. As a result, higher NI (or generally you will start to pay NI) for the same role you were doing previously via your PSC. Its a risk and fairly easy to be seen. This wasn't a risk I could sleep with, so I walked from a good contract I was happy with in Feb 2020, then in March the legislation got canned, blanket ban still in-place, caused a lot of upset. I then took a new contract elsewhere in April 2020 (outside via my PSC), not a great contract tbh, but its outside and its gotten me through Covid. Expecting the same conversations to be happening with this contract in the coming weeks and I'll likely have to walk again.

Then I consider... do I just suck it up and take a new gig via Umbrella. Entertain the possibility of being a drone (employee) to an organisation, re-emigrate or seriously look at starting something new, i.e. a takeaway or mobile-based business. I think anyone operating "outside" from April 2021 onwards will be on HMRCs radar like never before.