The Agent Decides - Could This Be a Good Thing

[pjt]

So the current suggestions are that the engager will decide weather SDC is a factor for our gigs. Could this maybe end up as a positive for us? In reality what will an agent care or know about SDC for a particular role other than whats currently down in the contract. I'm assuming some clients actually use agency contracts when taking on contractors. If these are IR35 (SDC) friendly then whats to stop the agent deaming us outside IR35?

[Pondlife]

So the current suggestions are that the engager will decide weather SDC is a factor for our gigs. Could this maybe end up as a positive for us? In reality what will an agent care or know about SDC for a particular role other than whats currently down in the contract. I'm assuming some clients actually use agency contracts when taking on contractors. If these are IR35 (SDC) friendly then whats to stop the agent deaming us outside IR35?

Nothing. Until HMRC decide that a contractor was under SDC and goes after the agency for the deficit in tax/NIC

[MarkT]

True though this is - what's the chances of them getting us all? We get insurance against being caught by IR35, make ourselves or the agency the beneficiaries, as required, and let them go for it. How many people are HMRC going to be losing again?

They can't even answer the phone in time, let alone look through 200,000 IR35 cases!

Yeah I know - I like to clutch at straws....but the 24th is a long, long way away

[TheFaQQer]

Nothing. Until HMRC decide that a contractor was under SDC and goes after the agency for the deficit in tax/NIC

That's the key thing - the agency could well be on the hook for tax liability if they declare you outside when you are inside.

Plus with the mooted mechanism for determination, it makes it a heck of a lot easier for you to be classified inside than outside.

[jamesbrown]

So the current suggestions are that the engager will decide weather SDC is a factor for our gigs. Could this maybe end up as a positive for us? In reality what will an agent care or know about SDC for a particular role other than whats currently down in the contract. I'm assuming some clients actually use agency contracts when taking on contractors. If these are IR35 (SDC) friendly then whats to stop the agent deaming us outside IR35?

FWIW, I agree with Lisa's post here insofar as the agency won't be in a position to make a determination. However, there's an issue with transfer of liability. I don't think HMRC will want a liability resting with the PSC alone, even if they have an agency reporting requirement to follow-up. Instead, while I think the mechanics could work as Lisa describes above, there's likely to be joint and several liability so that HMRC can pursue anyone in the chain. In principle, this could lead to a complex web of transferred liabilities via the contracts, but the PSC is the weakest link in the chain. In other words, either the client or the agent ultimately carry that risk, regardless of what the contract says (HMRC aren't party to the contract). In practice, the agency would probably require that the liability rests with the end client and, on that basis, the end client would only offer something not subject to SDC in the most clearcut of cases, and even then it's questionable...

[Pondlife]

That's the key thing - the agency could well be on the hook for tax liability if they declare you outside when you are inside.

Plus with the mooted mechanism for determination, it makes it a heck of a lot easier for you to be classified inside than outside.

Pondlife liked this post

Liked is obviously the wrong word but we don't have an agree option.