-
Hi – I am looking for some advice. I have just been offered a piece of work to help with bid writing for a large international org. As often is the case there’s a need for an IR35 determination. However, I am being asked to pay for the determination assessment which is a new one on me. Does anyone know if this is accepted practice, and if it is, are there any implications for me if I’m the fee payer? I feel uncomfortable, but have only raised eyebrows so far, rather than pushing back, as I’d like to know t if there are any impacts except for an expense I wasn’t expecting. Any thoughts gratefully received. Thank you! Arabella
16 Comments-
I haven’t heard of this before if you are dealing directly with the big client. My thought is that you shouldn’t be asked to pay this fee as It is the client’s responsibility to determine the status and is the client’s liability if they get it wrong. So I am surprised that they ask for it as it looks quite bad on them.
If you are not dealing directly with the end client, I wouldn’t know how agencies usually handle it. But I can easier imagine that a small agency or recruiter is asking you to pay as they may have promised the big client that they will take care of IF35 within their fee. I can’t comment on any legal consequences of you paying the fee.
-
Hi Arabella Nairne as far as I now, the IR35 is absolutely the engaging employers’ responsibility and I have never heard of the contractor/interim being charged. However, it might just be as is advised by the regulations that they deem IR35 to be the default position and you will then have to either accept or decline the fee rate unless of course you can neg. a gross up.
-
Likewise – this is the client’s responsibility to ensure that the engagement doesnt stray to the wrongside of the IR35 line.
-
Thanks to Kevin Withane Zarir 'Zed' Vakil Pete Domican Dimitris Protogirou Ella Bernie. I’ve taken expert advice. What’s absolutely clear, which you all pointed out, is that they are ultimately responsible in the event of an incorrect determination. What I’ve been advised is that they are not flouting any rules by asking the contractor to pay for the determination, but that it makes no difference to who is ultimately responsible . So now the decision is for me to make, whether I am willing to pay the £150 fee in order to get the contract. It feels very wrong, but I know that they are a reputable company as I have done some work with them before a number of years ago. Thank you all for your input.
-
Hi Arabella Nairne it’s worth taking a look at https://www.gov.uk/guidance/check-employment-status-for-tax – which I used to good effect with a certain large and bureaucratic org. The online determination errs on the side of caution, according to my accountant, so you can be fairly confident if you get a pass here. Large org still required their CFO to sign off but it got done sans IR35.
-
-
My interpretation is that it would sit outside of IR35 for the following reasons:
1. Its a piece of work with a set beginning and end
2. The interpretation is that they do not have an inhouse team / person to assist with that artefact creation
3. They aren’t asking you to sit in house and write multiple proposals, its 1 piece relating to a specific bid
Hope this assists.
Jonny Frostick
-
Thank you. It’s not so much the determination itself that I am querying , but the fact that the client is passing on their costs to me to establish their determination – that’s the new one on me and I wanted to check it didn’t change any of the liabilities or responsibilities – which it doesn’t seem to. But rather cheeky of them to get me to foot their bill.
-
Hi Arabella, that’s a new one on me also, sounds a bit cheeky if you ask me. Presumably you can increase your charge rate to compensate – else things like this tend to put me off a potential client.
-
Yes – and I don’t buy into the line that everyone else has accepted it so therefore I should too. If no-one pushes back then it becomes the default. Am still contemplating – they’ve been a good client in the past but they’ve not responded well to the change in IR35 so it would seem!
-
-
-
-
Hi Arabella, its very cheeky of them. I would be wary of other things that may not be professional.
-
Hi Arabella,
I agree with several of the above comments- it isn’t for you to do and cheeky at the very least. I would push back.
If you do decide to push back I would be interested to know how the corporation reacted.
-
Hi Arabella, pitching in as I’ve done a few IR35 assessments in the past and learned some lessons in the process. I hope I’m not too late to help you, just joined the Collective today.
The most important point here is liability. In summary, I don’t believe that you paying for your own IR35 assessment changes liability in any way. I’m reading this situation as the company being a bit cheeky on costs and misunderstanding how IR35 works. If they are indeed a large corporate, then the latest HMRC rules shifted the liability to them. If they hire you, there is an investigation, and you are deemed inside IR35, the company is liable to pay the tax difference (not you). If they understood that, they would want to run their own IR35 assessment, since it’s their risk to manage.
Having said the above, if you were to be investigated (and that could happen regardless of the IR35 assessment), it’s a hassle and may carry legal costs. So I would advise you to have business insurance that covers legal costs in the event of an IR35 investigation. There are plenty of insurance providers in the market that cover that (Qdos and Hiscox come to mind) and who also give you advice.
Regarding cost. The last time I did my own IR35 assessment I paid something like £40, so it’s not worth a fight especially if your client is acting out of ignorance rather than malice. I used Crunch (https://crunch.ir35.io/contractor-assessment/0). You could use the free HMRC assessment tool, but I’d ask your client if they accept that.
Hope it helps!
-
Thanks so much Carlos Silva. Lots of sense in here. The client is vert risk averse and has set up their own arrangements with regards to determination which carries a heavier price tag than the £40 you point to. (I’ve previously used my accountant to assess without cost). I concluded the same as you mentioned, that regardless of who pays for the assessment, where the liability sits does not change. Ceema Namazie, I did push back, and my choice was either to pay or walk away.I decided to accept the assignment purely because it’s a good bid work refresher, and I’ve worked with this company before some years ago, and know that they are pretty decent and very thorough and compliant. I’ve convinced myself it’s a cost of sale (!) But I’m pretty sure I wouldn’t have done it if the client wasn’t already known to me.
While I’ve always had insurance to cover legal costs in case of an investigation, I’ve now discovered there’s a new insurance to cover any tax liability as well as legal costs. This covers all the players in the chain – contractor, client and any intermediary. This could be purchased by any one of the organisations in the chain. Only Kingsbridge and QDos offer this currently from what I understand. Thanks to everyone for your contributions – it’s been an interesting scenario.
-
Hi Arabella, great question, Dene Heywood, Vic Mistry, Zarir 'Zed' Vakil, Issam Abu-Aisheh, MBA (Oxon), Dimitris Protogirou, Kevin Withane, Vanessa Zampiga, Yasmin Gregory, Francesca Laursen, Ben Legg might be able to give you some advice