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Markel Tax

Private Sector

HMRC issued a consultation in March 2019 and looks to be refining the public sector rules to ensure that there is a better transfer of information down the recruitment chain, and have raised the spectre of the transfer of debt back up the chain.  It will be some time before we know the outcome of the consultation, let alone see the final draft legislation.

However, what is patently clear is that end clients, agencies, PSC clients and accountants all need to get ready for the changes coming in April 2020.  All will be affected and the issues facing the various parties are well summarised in this recent review of the consultation.

Many PSCs will soon find themselves in a position where their engagements will cross the April 2020 date, and some end clients will be applying their processes under the new regime well before that date. Therefore, if a PSC wants to offer clear evidence to an end client or agency that an engagement is ‘not caught by IR35’, then there is no better starting point than a comprehensive and independent contract review. We will review your clients’ contracts, along with their working practices, to determine whether or not they are operating outside of IR35. 

They will receive a written report with suggested contract amendments where appropriate, together with an opinion on their status. Whilst HMRC are at liberty to challenge the opinion, it does demonstrate that your client has undertaken the appropriate level of due diligence. 
 
If a contract is deemed ‘outside of’ or ‘not caught by’ IR35, Markel Tax can also offer tax losses insurance to your contractor (personal service company) clients, which will pay any tax, interest and even penalties, if HMRC is successful in arguing that IR35 applies.

In order to have the tax losses insurance, they will also need tax enquiry protection, which means that if you are offering a tax investigations package to your client base, they will need to subscribe to your service.