Reply to: HMRC off payroll decision service

[youngguy]

The agency might then go after the contractor? Those who have QDOS or IPSE are protected, the rest may or may not give in and pay up.

I suppose agencies may have new clauses in their contract which states any liability found in the future comes back on the contractor.

As for insurance, I'd guess there may be some changes in their clauses as well....or at least a rather large hike in cost.

[northernladuk]

The agency might then go after the contractor? Those who have QDOS or IPSE are protected, the rest may or may not give in and pay up.

They are? I can't believe any existing products will payout in the same way with such a massive change? Surely the T&Cs will change now the risk factor has changed so much?

But I'm not sure the comment about coming after the contractor is true though.

[MPwannadecentincome]

The different is right now if a contractor is caught, they foot the bill. Come April that will either be the ps or the agency and neither is likely keen on taking the risk, for fear of HMRC then looking at ALL contractors on their books.

The agency might then go after the contractor? Those who have QDOS or IPSE are protected, the rest may or may not give in and pay up.

[LondonManc]

Dare I say this is quite clever of old Hector. No resources to police, so move liability, which increases the risk for ps and agencies, resulting in a behavioural change from them.

Let's hope said agencies and ps recognise if they want decent people and to keep projects running they will have to alter rates.

The TFL case is going to be interesting in terms of how many stay and suck it up/bend over and how many walk

The TFL case still won't turn the heads of most BoS contractors in the PS who will be getting their own shafting in due course. How many happily drop into PAYE probably depends on their expenses.

[youngguy]

But HMRC have had these for a while now. Nothing in IR35 has changed, just from April (or sooner TFL) will organisations just change their models with regards to contractors through LTD companies. Majority will have to be brollys now.

The different is right now if a contractor is caught, they foot the bill. Come April that will either be the ps or the agency and neither is likely keen on taking the risk, for fear of HMRC then looking at ALL contractors on their books.

[youngguy]

They just need agencies and PSEC bodies to fear being caught to force the majority inside. Previously they had no skin in the game, they do now.

Dare I say this is quite clever of old Hector. No resources to police, so move liability, which increases the risk for ps and agencies, resulting in a behavioural change from them.

Let's hope said agencies and ps recognise if they want decent people and to keep projects running they will have to alter rates.

The TFL case is going to be interesting in terms of how many stay and suck it up/bend over and how many walk

[eek]

But HMRC have had these for a while now. Nothing in IR35 has changed, just from April (or sooner TFL) will organisations just change their models with regards to contractors through LTD companies. Majority will have to be brollys now.

You are missing something - currently they have NI details but no idea where people are actually working or what they are doing - that list has little value and still isn't being used by anything as shown by the fact my FOI requests asking for data collected from said system still aren't being answered (because they aren't using the data).

Come April they will have new list (tax payers perceived by their end client to be inside IR35) and that is a far more interesting list to play with especially when you merge it with the previous one...

Now I do know slightly more on the grapevine than I'm letting on here so I'll leave it at that...

[Semtex]

They now have the NI numbers (and from that the names and addresses) of those people in a readily accessible report.....

Write scary letter (or 3), run mail merge and your done....

But HMRC have had these for a while now. Nothing in IR35 has changed, just from April (or sooner TFL) will organisations just change their models with regards to contractors through LTD companies. Majority will have to be brollys now.

[eek]

Sorry don't get it.

What has changed? HMRC has always known about circa 14,000 PS contractors? IR35 hasn't changed....

They now have the NI numbers (and from that the names and addresses) of those people in a readily accessible report.....

Write scary letter (or 3), run mail merge and your done....

[Semtex]

I think its worth being clear here.

HMRC only need to send out letters. Even if 50% of people object and pass the letter to IPSE or others to deal with that still gives them a 50% success rate as those without advice pay up.

And if HMRC swamp IPSE and others with more work than they can handle that to HMRC would be a win as well...

The thing to remember here is that HMRC can take what was once a lot of work individually identifying cases and instead adopt the blanket approach they nowadays prefer...

Sorry don't get it.

What has changed? HMRC has always known about circa 14,000 PS contractors? IR35 hasn't changed....

[jamesbrown]

Only hmrc could come up with a system where the tax status of A is determined by C and the liability is held by B.

So true.

[BoredBloke]

Only hmrc could come up with a system where the tax status of A is determined by C and the liability is held by B.

[eek]

No to open an enquiry all they have to do is have evidence that they suspect the contract isinside IR35 not outside and send a kick off letter. Currently its difficult to identify IR35 cases full stop, but come April there is a readily available dataset of cases worth investigating...

I think its worth being clear here.

HMRC only need to send out letters. Even if 50% of people object and pass the letter to IPSE or others to deal with that still gives them a 50% success rate as those without advice pay up.

And if HMRC swamp IPSE and others with more work than they can handle that to HMRC would be a win as well...

The thing to remember here is that HMRC can take what was once a lot of work individually identifying cases and instead adopt the blanket approach they nowadays prefer...

[LondonManc]

Andy,

Potentially another service you could sell in to PS - IR35 determination based on experience. While you've possibly in the past made contracts more IR35-friendly and let the contractor worry about the working practices, you're in a better position than the PS to say which contracts should and shouldn't be inside IR35.

I'd imagine (and it's purely a finger in the wind) that 60-80% of all contractors who are declared outside at the moment should actually be inside. I'd also suspect that you could provide sample contracts and a list of roles combined with experience levels to give better guidelines to PS bodies as to which, say, 65% of those contracts would be inside. Hector gets his pound of flesh and we all have to accept that some have had it too good for too long. There are people in the office that I am in that are outside IR35 that I'd suspect should be inside IR35.

[eek]

But last time I checked HMRC aren't judge, jury and executioner - there will have to abide by the existing policies and procedures for opening an enquiry.

No to open an enquiry all they have to do is have evidence that they suspect the contract isinside IR35 not outside and send a kick off letter. Currently its difficult to identify IR35 cases full stop, but come April there is a readily available dataset of cases worth investigating...