Asked to pay for IR35 Assesment

[eek]

The IR35 Contract Assessments we have offered and continue to offer free to policyholders and the paid-for services we provide are separate from the off-payroll assessments we make on behalf of clients. Whilst the basis of making the assessments remains the same in terms of case law and so on, the off-payroll assessments require an extra level of management and involvement from the client in the process. The client has the responsibility for verifying the accuracy of any assessment and ultimately making the determination, but a rounded and inclusive basis for the decision is important.

We feel it is vital to include the contractor in the process to enable us to cover all nuances and factors that are specific to each PSC, however the ultimate responsibility still lies with the client.

When it comes to the payment of those assessments - we found that allowing the client to require the fees paid by the contractor encouraged more (particularly those on the fence with PSC bans) to take a fair and compliant approach to their assessments as opposed to using the likes of CEST or banning contractors altogether. However this is entirely a commercial or policy decision on the part of the client. In some cases these fees will be borne by the contractor and in others it is borne by the client or even the fee-payer. There is no bearing on status for who pays the fee however.

We do appreciate that for some, particularly those who have used our services directly in the past, this will feel like doubling up - but it is important to remember that we are dealing with two different sets of rules and responsibilities here at the same time.

I can see the value in the client or the fee-payer / agency paying the fee - they are the people responsible for the decision and I can see valid reasons for a client to pass it down to the fee payer levels as they are the intermediaries closest to the decision. That logic would very much fit into the typical end client approach of I have £x,000 budget for this project all costs are borne by the agency.

But passing the request down to the contractor him/herself just feels wrong - after all when he/she makes the decision to pay the bill for the assessment who is making the decision - is it the contractor as the director of the PSC that would be used if the contract is outside or the contractor himself (which it would be if the contract is inside and the money is deducted from his first wage packet).

Until now that decision wasn't an issue because it was always the PSC paying for the check to protect itself from a claim but I can see an issue come April. What justification would a PSC have to pay for that compliance check and how can you bill someone when you don't know if the person paying for the check will be the PSC (assuming it's outside IR35) or the contractor (were it inside).

Would you care to comment as to me that looks like a problem requiring either a payment from the worker either before the work commences (problem in law) or a deduction from the first pay pocket (which means two key information document from the umbrella company or a risk of illegal deductions).

[Qdos Contractor]

I actually would be interested in QDOS's viewpoint on this - I cannot see them being happy being paid by an interested (and biased) party that isn't the one directly responsible for the determination or the consequences of that determination.

The IR35 Contract Assessments we have offered and continue to offer free to policyholders and the paid-for services we provide are separate from the off-payroll assessments we make on behalf of clients. Whilst the basis of making the assessments remains the same in terms of case law and so on, the off-payroll assessments require an extra level of management and involvement from the client in the process. The client has the responsibility for verifying the accuracy of any assessment and ultimately making the determination, but a rounded and inclusive basis for the decision is important.

We feel it is vital to include the contractor in the process to enable us to cover all nuances and factors that are specific to each PSC, however the ultimate responsibility still lies with the client.

When it comes to the payment of those assessments - we found that allowing the client to require the fees paid by the contractor encouraged more (particularly those on the fence with PSC bans) to take a fair and compliant approach to their assessments as opposed to using the likes of CEST or banning contractors altogether. However this is entirely a commercial or policy decision on the part of the client. In some cases these fees will be borne by the contractor and in others it is borne by the client or even the fee-payer. There is no bearing on status for who pays the fee however.

We do appreciate that for some, particularly those who have used our services directly in the past, this will feel like doubling up - but it is important to remember that we are dealing with two different sets of rules and responsibilities here at the same time.

[eek]

I have quite happily taken on the responsibility and liability until now. Hence having the insurance in place. Seems strange having both the responsibility and liability taken away, but still expected to pay, and for something that I have already paid for, indirectly.

Also the six monthly recheck seems like a license for someone to print money. Currently I only get the contract reviewed if there are substantial changes, (normally a new client).

I actually would be interested in QDOS's viewpoint on this - I cannot see them being happy being paid by an interested (and biased) party that isn't the one directly responsible for the determination or the consequences of that determination.

[northernladuk]

I have quite happily taken on the responsibility and liability until now. Hence having the insurance in place. Seems strange having both the responsibility and liability taken away, but still expected to pay, and for something that I have already paid for, indirectly.

Also the six monthly recheck seems like a license for someone to print money. Currently I only get the contract reviewed if there are substantial changes, (normally a new client).

I agree with what eek is saying about the client is incorrectly discharging their responsibility. It also adds another level of risk as it relies on the contractor to provide information, particularly around working practices, and we are well away many contractors have less than a clue about IR35 so high risk of generating an incorrect determination.

I think I'd be looking for a new gig if I was in the OP's position.

[daydream]

Actually as a thought experiment it's quite simple.

After April the end client is the person responsible for the determination - so they should be the people paying for that determination.

By asking the contractor to pay for the determination I would argue they are opening themselves up to a charge of not doing due diligence.

I have quite happily taken on the responsibility and liability until now. Hence having the insurance in place. Seems strange having both the responsibility and liability taken away, but still expected to pay, and for something that I have already paid for, indirectly.

Also the six monthly recheck seems like a license for someone to print money. Currently I only get the contract reviewed if there are substantial changes, (normally a new client).

[ladymuck]

It's one of those things where I can see why they wish to use the approach they are adopting - I just don't think they have thought through the consequences of asking for the lowest part of the chain (and the person from which responsibility has been removed) to pay for it

I do agree, just poking fun

[eek]

Spoilsport.

It's one of those things where I can see why they wish to use the approach they are adopting - I just don't think they have thought through the consequences of asking for the lowest part of the chain (and the person from which responsibility has been removed) to pay for it

[ladymuck]

Actually as a thought experiment it's quite simple.

After April the end client is the person responsible for the determination - so they should be the people paying for that determination.

Spoilsport.

[eek]

As a thought experiment it's quite interesting. I don't have any answers, sadly.

If outside IR35, I'd see that as a cost of doing business. If inside IR35, I'd wonder how I could be a disguised employee if I'm subject to fees in order to obtain work that a person directly on the client's payroll would not incur.

I know there's way more to IR35 determination than being asked to pay a fee in order to obtain work from that client but there's an implication that, by being treated differently, my status with the client is different.

Actually as a thought experiment it's quite simple.

After April the end client is the person responsible for the determination - so they should be the people paying for that determination.

By asking the contractor to pay for the determination I would argue they are opening themselves up to a charge of not doing due diligence.

[ladymuck]

As a thought experiment it's quite interesting. I don't have any answers, sadly.

If outside IR35, I'd see that as a cost of doing business. If inside IR35, I'd wonder how I could be a disguised employee if I'm subject to fees in order to obtain work that a person directly on the client's payroll would not incur.

I know there's way more to IR35 determination than being asked to pay a fee in order to obtain work from that client but there's an implication that, by being treated differently, my status with the client is different.

[eek]

Normal for a business working outside IR35 as a business expense

Are you really inside IR35 all this time as a permie tractor?

What makes you outside ?


Sent from my iPhone using Contractor UK Forum

A better question would be exactly how long has the OP been working for the same client as I suspect any idea that he is outside IR35 is just in his mind.

[GhostofTarbera]

Normal for a business working outside IR35 as a business expense

Are you really inside IR35 all this time as a permie tractor?

What makes you outside ?


Sent from my iPhone using Contractor UK Forum

[daydream]

At the start of the year, my end client informed all their contractors that they would be using QDOS for their IR35 assessment process. I was happy with this, as I am a QDOS Client, and have used their IR35 Contract Assessment process to assess the Client contract in the past.

The process dragged on, and no-one had received their assessment results by the time IR35 went away in March.

Preparing for the resurrection next year, the client has confirmed they will again be engaging QDOS. This time however, there is a twist - the contractors are expected to pay for their own assessments upfront. Also they are expected to pay for a re-assessment every six months.

Is this fairly normal?

The QDOS Tax Enquiry Insurance and Tax Liability Cover products include a "Free" Contract Assessment. With the Tax Liability moved from the Contractor to the Client, and the Contract Assessment done on behalf of the client, (whether or not they or the contractor pays), these products seem to me to become worthless.