Reply to: Client decides role is inside IR35 but then fails to deduct any taxes

[eek]

I already appealed including evidence of use of multiple substitutions (along with documentary evidence of their acceptance of substitutes). My appeal was rejected without any reasons being provided.

Just goes to show how the whole process is flawed.

If you believe an assessment is still factually incorrect there is nothing further you can do - other than perhaps take them to an employment tribunal when you leave the gig!! I doubt HMRC would ever hand the taxes paid back though!

There is no formal mechanism of appeal.

Personally if I had been told my contract was inside IR35 I would have left in April for there would be very big problems were HMRC to come calling.

[dingdong]

I already appealed including evidence of use of multiple substitutions (along with documentary evidence of their acceptance of substitutes). My appeal was rejected without any reasons being provided.

Just goes to show how the whole process is flawed.

If you believe an assessment is still factually incorrect there is nothing further you can do - other than perhaps take them to an employment tribunal when you leave the gig!! I doubt HMRC would ever hand the taxes paid back though!

[jamesbrown]

At least if he appeals he can explain to those involved that they can't have their cake and eat it - they choices were do you want a company providing a service or an individual.

And if its the latter you are going to have to manage holidays and other leaves of absence without any external support.

Right, true. Client does sound a bit clueless and unprepared/panicked, at least their HR (shock horror).

[eek]

Agree, but it's hard to know what the OP can do beyond the client-led status disagreement process which, at best, might come back with something like "yeah, asking for a substitute was a mistake, we didn't mean that and want you to deliver the services personally at all times and going forwards that will happen". It's unclear what action can be taken beyond that.

At least if he appeals he can explain to those involved that they can't have their cake and eat it - they choices were do you want a company providing a service or an individual.

And if its the latter you are going to have to manage holidays and other leaves of absence without any external support.

[jamesbrown]

Agree, but it's hard to know what the OP can do beyond the client-led status disagreement process which, at best, might come back with something like "yeah, asking for a substitute was a mistake, we didn't mean that and want you to deliver the services personally at all times and going forwards that will happen". It's unclear what action can be taken beyond that.

[eek]

I'd not, unless i was ready to walk (or be walked). We all know these determinations are risk-based (ie. making someone outside is more than someone is willing to risk their job for), rather than role-assessment-based.

But not in this case - this is a slam dunk case of abuse of process given the request that a substitute is wanted for next week - and providing a substitute is confirmation that the role is outside IR35.

[Paralytic]

I would be appealing the Status Determination based on the request - as it would be very hard to continue the argument that the rule is inside given that request.

I'd not, unless i was ready to walk (or be walked). We all know these determinations are risk-based (ie. making someone outside is more than someone is willing to risk their job for), rather than role-assessment-based.

[jamesbrown]

I'm not sure i'd necessarily agree that the money isn't rightfully mine given their incorrect inside rating.

Assume that is tongue in cheek, because that isn't going to work out well, otherwise. Mistakes by one or other or both parties are a routine situation in contract law and there's plenty of case law on them. Same for an employment contract, incidentally (if your employer overpays you accidently).

Anyhow I will now go explain the brave new world to their HR department again. Thanks all for your comments.

That's about all you can do. Talk to them like children and pat them on the head.

[NotAllThere]

You'd imagine they would seems you've kept money knowing full well it's not yours. Can't work out if that's theft or fraud?

If you receive money and you know it's not right, then it's theft.

[eek]

If i were forced to go inside and then this happened, I'd be asking for a finders fee for doing so.

Have you asked them how they propose to pay the substitute?

I would be appealing the Status Determination based on the request - as it would be very hard to continue the argument that the rule is inside given that request.

[Paralytic]

Particularly given the email I've also just received asking if I can send my substitute again when i'm away on holiday next week. You couldn't make it up!

If i were forced to go inside and then this happened, I'd be asking for a finders fee for doing so.

Have you asked them how they propose to pay the substitute?

[northernladuk]

I'm not sure i'd necessarily agree that the money isn't rightfully mine

That's what everyone that receives money that isn't theirs and wants to keep it says.

[dingdong]

I'm not sure i'd necessarily agree that the money isn't rightfully mine given their incorrect inside rating.

Particularly given the email I've also just received asking if I can send my substitute again when i'm away on holiday next week. You couldn't make it up!


Anyhow I will now go explain the brave new world to their HR department again. Thanks all for your comments.

[northernladuk]

Third time lucky Hobnob

[jamesbrown]

Thanks both, and apologies for giving out incorrect information. Here's the ITEPA legislation that jamesbrown mentioned:
Income Tax (Earnings and Pensions) Act 2003 (legislation.gov.uk)
That specifically mentions public authorities, but presumably there's similar legislation for the private sector after this year's changes.

The most important part seems to be 61O(1)(b): "the worker has a material interest in the intermediary."
According to 51(4)(a) in chapter 8, that includes "beneficial ownership of, or the ability to control, directly or through the medium of other companies or by any other indirect means, more than 5% of the ordinary share capital of the company;"

I.e. that would be the case for your own limited company, but (probably) not for an umbrella.

First, you're not accounting for all the changes made in recent FAs, as listed in the outstanding changes.

Second, if you're working through an umbrella, then it's all irrelevant - neither chapter 8 nor chapter 10 apply in substance because you are under PAYE employment.

Regardless, I don't think any of that is relevant to the hypothetical case described by the OP who is asking about whether they can retain an overpayment by the client and the answer to that is "no" but it has nothing to do with IR35, which remains the responsibility and liability of the supply chain above the OP's company.