Some questions for IT Contractors please

[Nazbit]

So we've talked in this thread about the future of IR35, when the client has to make the determination as to whether a contract is inside or outside of the rules and the possibility that they may be tempted to apply an arbitrary blanket judgement of "inside" to reduce their own liability.

This article published today uses the word "unlawful" to describe this practice in relation to Network Rail.

However it does not elaborate on how or why this illegal or provide any basis for that determination.

https://www.contractorcalculator.co.uk/unlawful_network_rail_blanket_approach_550010_news.aspx

Is anyone aware of why, if the client is responsible for the decision, applying a blanket decision of inside IR35 would be unlawful? Undesirable yes, immoral...maybe, but I can't find anything to say unlawful.

 

[fezster]

So we've talked in this thread about the future of IR35, when the client has to make the determination as to whether a contract is inside or outside of the rules and the possibility that they may be tempted to apply an arbitrary blanket judgement of "inside" to reduce their own liability.

This article published today uses the word "unlawful" to describe this practice in relation to Network Rail.

However it does not elaborate on how or why this illegal or provide any basis for that determination.

https://www.contractorcalculator.co.uk/unlawful_network_rail_blanket_approach_550010_news.aspx

Is anyone aware of why, if the client is responsible for the decision, applying a blanket decision of inside IR35 would be unlawful? Undesirable yes, immoral...maybe, but I can't find anything to say unlawful.

The legislation is here:

https://www.legislation.gov.uk/ukpga/2017/10/schedule/1/enacted?view=plain

But this article provides a much more readable summary: https://www.contractorcalculator.co.uk/legal_analysis_shows_why_hmrc_blanket_547610_news.aspx

Blanket assessment claims defeated at Judicial Review
Recent legal action taken after HMRC appeared to incite the blanket assessment of locum workers within the NHS has also reinforced the unlawfulness of the approach. During an IR35 webinar delivered to NHS Trusts by HMRC and NHS Improvement (NHSI), HMRC stated that they expected all healthcare contractors, apart from GPs, to fall within the Off-Payroll rules, and taking a blanket role-based approach was acceptable.

Consequent NHSI guidance, stating that all locum and agency workers should be deemed ‘inside IR35’ and placed on a payroll, was subject to a Judicial Review (JR) lodged by the Independent Health Professionals Association (IHPA) on the grounds that it wasn’t legally accurate. At the pre-action stage, NHSI conceded and amended its guidance, stating:

‘An assessment of whether or not IR35 applies should be carried out in a fact-specific way; that is, it should be applied on a case-by-case basis, rather than by a broader classification of roles.’

Despite the conclusive outcome of the JR, IHPA head of legal, Stephen Mhiribidi, is unsurprised that the taxman has since continued to issue similar misleading guidance:

“Based on the experience within the NHS, we have no doubt that HMRC’s intention is to force as many contingent workers as possible onto a payroll, regardless of their true tax status. The webinar was designed to look like it was sharing impartial HMRC advice but, in reality, it was a directive to Trusts to blanket almost all healthcare contractors into IR35, backed up by threats of Treasury fines.”