The All Things IR35 Related Thread

Django x2 · 5 Oct 2019 at 21:32

Sounds like they sealed their own fate then and along with it, their contacting community. Give it 5 months before the realise they can't work with outsourced Indian companies, standards have slipped, although probably only slightly, and work is piling up quicker than they can fill the positions required to do the work. There's a much simpler route these companies could have taken, but fear and leaving it to the last minute has taken its toll.

One other action would be to simply flood HMRC with appeals. They don't have the workforce to handle their current workload, let alone dealing with a load of appeals. I can see the government overturning this decision if they suddenly realise the coffers are bare and along with Brexit, a large proportion of UK businesses cease to trade.

Steedie · 30 Oct 2019 at 15:33

How are we all feeling contractors of OcUK?

Got to say, I'm a lot more positive about it all than I was a couple of months ago from speaking to a few recruiters. Sounds like April-June will be a bit rocky, which suits me as it will force me to have some well earned time off

18 days in 5 years has nearly done me in!

Certainly not going to be as easy to be a contractor from next year, but as long as you're one of the better ones and willing to look, sounds like they'll be plenty out there. Also, I think when the market is suddenly screwed when, as mentioned above, people realise they suddenly can't get the staff any more, they'll be some clever loopholes discovered or appeals.

I think the worry is for those who probably should be permanent anyway but somehow fell in to contracting even though, and it sounds horrible to say, they are really not that good.

Jokester · 30 Oct 2019 at 17:26

Murmurings of one of the big contractors in Aberdeen taking a blanket position of making everyone PAYE regardless of their IR35 position. It might blow up in their face though as the job market is increasingly tight here and that would just incentivise people to go elsewhere.

Just playing the waiting game here, my agent and client at the moment both seem to be reasonable in the course they are taking so I’m hoping it won’t impact me.

wonder_lander · 13 Nov 2019 at 13:44

I recently started a new contract which takes me through to mid April, I was 4 days between my contract ending and this one being lined up. I feel that I'll be extend come April so that takes me over the initial hump of the new legislation.

With a general election about to take place there's a possibility, slim from what I understand, that this legislation may well be bounced down the road again!

NVP · 13 Nov 2019 at 13:47

There's been a rumour it's going to be pushed again for a while now, seems likely.

Steedie · 14 Nov 2019 at 20:40

NVP said:
There's been a rumour it's going to be pushed again for a while now, seems likely.

As much as I'd like to think that's true, I think it's extremely unlikely. Only hope is the budget being cancelled until December, but I think it will just get passed through then

Django x2 · 25 Nov 2019 at 18:23

So Barclays now have failing IT projects. They've bought in an IT company to shore up the lack of skill and that company has re-employed the contractors that were just binned off, and they're all on higher rates than when direct to Barclays.

Do not allow to be blanket assessed. HMRC themselves have said that is rule one. The end client cannot blanket assess.

Don't wait either, because currently, some people are disengaged about what/who constitutes the "end client". They'll keep that ball rolling until April and advise you at the last minute. Why would they tell you now and fear you swapping out before April.

The only consolation right now is that those challenging legacy cases, are winning against HMRC with even simple tactics like mutuality of obligation. The most recent was even decided by the courts in favour of the contractor because they created their own invoices as opposed to using a client based invoice raising system.

flibbage0 · 26 Nov 2019 at 14:01

I wonder how this would affect me, I locum for different pharmacies so a mix of different companies? Will IR35 affect me?

peterwalkley · 26 Nov 2019 at 14:06

EDIT Ignore.

Seearbe · 26 Nov 2019 at 15:33

flibbage0 said:
I wonder how this would affect me, I locum for different pharmacies so a mix of different companies? Will IR35 affect me?

Unlikely. IR35 only applies if you would be seen as an employee if it weren't for the Personal Services Company and that wouldn't normally be the case where you are working for multiple clients, aren't intending to create an employment relationship etc etc.

Django x2 · 27 Nov 2019 at 08:04

flibbage0 said:
I wonder how this would affect me, I locum for different pharmacies so a mix of different companies? Will IR35 affect me?

No, you'll be fine. You have a constantly changing end client and no mutuality of obligation.

Steedie · 27 Nov 2019 at 14:16

Labour announced today that they would be scrapping IR35 reforms for the private sector following on from the same announcements from the Lib Dems. I'd imagine they'll be a fair bit of pressure for the Tories to delay the reform at the very least or consider scrapping it

ChrisD. · 27 Nov 2019 at 14:41

Seearbe said:
Unlikely. IR35 only applies if you would be seen as an employee if it weren't for the Personal Services Company and that wouldn't normally be the case where you are working for multiple clients, aren't intending to create an employment relationship etc etc.

Not true, it doesn't matter how many clients, it's the contract and working arrangements with those clients.

Django x2 said:
No, you'll be fine. You have a constantly changing end client and no mutuality of obligation.

How could you possibly know that without seeing his/her contract or having any idea about the working relationship?

Seearbe · 27 Nov 2019 at 14:47

ChrisD. said:
Not true, it doesn't matter how many clients, it's the contract and working arrangements with those clients.

Re-read my post and point out the "not true" bits. Clue: note the words "unlikely" and "wouldn't normally" and "etc etc."

Surely you're not saying that you think a locum arrangement would be caught?

If you're being pedantic about what's said, nobody has said he's even using a PSC.

Jokester · 27 Nov 2019 at 20:58

Seearbe said:
Re-read my post and point out the "not true" bits. Clue: note the words "unlikely" and "wouldn't normally" and "etc etc."

Surely you're not saying that you think a locum arrangement would be caught?

If you're being pedantic about what's said, nobody has said he's even using a PSC.

The question that would be asked is, is there something the locum does business wise outside his part time contracts that differentiates himself from a staff member that has his employers take care of, eg training, uniforms, potential for financial liabilities etc. If the locum can show there is a business supporting his work then sure he's outside IR35, but if his 9-5 is his total work probably not. The IR35 regs are pretty clear about it, even as far as being inside IR35 for some work and concurrently outside IR35 on other jobs (and you can see why it's a total mess).

Not saying you would ever likely come under the sight of HMRC as there is undoubtly bigger fish to catch so to speak, but if your locum work is basically you work in different pharmacies on different days of the week, then yeah. But yeah this obviously only applies if he is operating as some sort of client/contractor relationship as a limited company (or other entities covered by IR35).

Edit:
To the original question, if you are operating as a limited company contractor and you are inside IR35 in your work practises - from April your clients will be responsible for any unpaid taxes.

As a contractor, this is great!

Jokester · 28 Nov 2019 at 12:40

Was going to do this as an edit, but I think it’s worth a post of it’s own:-

Also, it’s worth noting the updated IR35 only applies to medium/large businesses (250+ staff), if the pharmacies you work for are smaller then this change doesn’t apply to you so conceivably you would still be potentially liable for any unpaid tax.

Django x2 · 30 Nov 2019 at 17:53

Complete nonsense. There are only 3 key indicators to IR35 status.

Mutuality of Obligation:
A locum pharmacist would certainly be clear on this. If the client has no work, they aren't going to pay the locum, they aren't even going to contact them, therefore, with MO alone, they would be deemed outside.

Substitution:
More than likely a locum could offer a substitute. The end client doesn't have to accept the substitute, however, the fact the locum has offered one (or the option of one is contracted), they would be outside.

Control:
The client engages the locum and their specialist skills and tells them when and where the job needs doing. The locum provides the service with no dependency on the end client instructing them on how to do their job. Such a scenario would be deemed outside.

In all but the most extreme cases, just one of these would win a tribunal case, exercising two of them would be a non starter and all 3, HMRC wouldn't even entertain the idea of challenging.

Then there are all the other "fringe" cases such as staff IT, use of staff carpark, using the employer time recording system, etc

flibbage0 · 30 Nov 2019 at 22:04

I appreciate all of your help but I'm just as confused as I was before, why does the Government have to mess with people that are just trying to make a living? We're not using offshore accounts, we're not being paid cash in hand. Genuinely annoys me. I hope the economy tanks, they deserve it for the amount of stupid **** they come up with and the amount of unnecessary debt that people have got themselves into, people earning £20k p/a yet they are financing designer clothes and poverty spec BMW's

Rant over

Gornall · 2 Dec 2019 at 11:05

flibbage0 said:
I appreciate all of your help but I'm just as confused as I was before, why does the Government have to mess with people that are just trying to make a living? We're not using offshore accounts, we're not being paid cash in hand. Genuinely annoys me. I hope the economy tanks, they deserve it for the amount of stupid **** they come up with and the amount of unnecessary debt that people have got themselves into, people earning £20k p/a yet they are financing designer clothes and poverty spec BMW's

Rant over

I think there is also an element of the average employee who gets a massive wedge of their income taxed, feeling a touch aggrieved. I support the aim for fairer tax systems, but agree there are plenty of bigger fish to go at.

Not sure this is the right approach, but I can see why HMRC is doing something.

Pudney · 2 Dec 2019 at 11:35

Django x2 said:
Complete nonsense. There are only 3 key indicators to IR35 status.

Mutuality of Obligation:
A locum pharmacist would certainly be clear on this. If the client has no work, they aren't going to pay the locum, they aren't even going to contact them, therefore, with MO alone, they would be deemed outside.

You'd be surprised, I certainly know of pharmacies that use locums whether or not there is any work to do...

Substitution:
More than likely a locum could offer a substitute. The end client doesn't have to accept the substitute, however, the fact the locum has offered one (or the option of one is contracted), they would be outside.

Possibly, depends on the contract. This can even be a weaker indicator depending on the circumstances (certainly its industry specific as to how strong this indicator can be).

Control:
The client engages the locum and their specialist skills and tells them when and where the job needs doing. The locum provides the service with no dependency on the end client instructing them on how to do their job. Such a scenario would be deemed outside.

You'd be surprised, I certainly know of pharmacies owned and operated by experienced pharmacists who cannot be at all their locations at once. But they certainly exercise a level of control whilst on site...

In all but the most extreme cases, just one of these would win a tribunal case, exercising two of them would be a non starter and all 3, HMRC wouldn't even entertain the idea of challenging.

Then there are all the other "fringe" cases such as staff IT, use of staff carpark, using the employer time recording system, etc

I think the only thing you can really say is that without seeing the contract and details of the actual working practices (legal terms that don't reflect the commercial reality can generally be ignored for this) I wouldn't ever say with certainty someone is inside or outside IR35.