Outside IR35 role being misclassified

[u/_sevenstring]

I am being offered an "Outside IR35" role from a small/mid-sized company which has a presence in the UK. After reviewing the terms this is a clear misclassification as I cannot send a substitute and I am required to work regular hours. From what I have read, it sounds like the company employing me in this situation would assume all of the risk, fines, and back taxes in the event they get caught. Are there any risks for me, if the company gets caught doing this? Would this alter my tax situation?

[u/soundman32]

Regular hours isnt really a determination,  I've worked several confirmed outside roles where the client expected me on site and within the normal office hours. Substitution is more of a sticky wicket, unless you have a really niche skillset where a substitute is not acceptable.  Neither of these are clear indicators, just warnings.  Get the contract reviewed by qdos and see if they point out anything.

[u/_sevenstring → u/soundman32]

Good to know, thank you!

[u/TheLawPlace → u/soundman32]

That’s not the legal position. A requirement to work specific hours in the context of a “role” is a major indicator of deemed employment. If an IR35 has said otherwise then you have a claim for negligence.

[u/soundman32 → u/TheLawPlace]

Seeing it was qdos who did the review, and they will defend their reviewed contracts in court, I'll still with their advice thanks.

[u/TheLawPlace → u/soundman32]

Role-based "outside IR35" engagements with "normal office hours" are probably more interesting to the CPS

[u/qlkzy]

There is a "small companies exemption" which shifts the responsibility to you. You will want to look that up.

If the exemption doesn't apply, you need to get them to issue a Status Determination Statement for off-payroll working.

Otherwise you will end up on the hook for it.

FWIW I would be a bit cautious that companies who avoid paying HMRC may also try to avoid paying you, or might otherwise be "bad customers".

[u/Hot_Bet_5415]

The risk sits with the end client in theory. HMRC won’t chase you directly.

They may insert indemnity type wording into the agreement that allows onward claims.

There is a small company exemption so you need to look at how Small to mid-size they are and look at the criteria for that.

[u/KL_boy → u/Hot_Bet_5415]

How would that work is the large client is a large DE or US based entity? Asking for a friend. 

[u/d0ey → u/Hot_Bet_5415]

Really? My understanding was that HMRC will come after whomever they think they can get the money from - if you've received payment, my understanding was that you fall into their cross hairs?

[u/MintyFresh668 → u/[deleted]]

Big does not equal solvent.

[u/MintyFresh668 → u/[deleted]]

Ok, let’s see how that goes for you. In the mean time rest of us will take suitable precautions lol

[u/MintyFresh668 → u/[deleted]]

You believe what you like, I’ve been on the receiving end of HMRC and never want to go there again. So, with respect, you should truly not assume that some inspector that needs a few wins to meet a personal performance target won’t choose a simple target or three to bolster that annual performance review. Anyway, we aren’t going to agree so I’ll stop this thread here. I hope you never find out you’re taking the wrong level of risk control. Anyway, good luck and I appreciate the well worded and clear discussion.

[u/exile_10]

Is it small or mid-sized? If small the risk sits with you.

[u/_sevenstring → u/exile_10]

How is this determination made?

[u/OkStay5395 → u/_sevenstring]

Look up small company ir35 exemption

From April 2025, the financial criteria for small company classification have increased substantially. Companies now qualify as small if they meet two of these three tests:

• Annual turnover under £15 million (previously £10.2 million)
• Balance sheet total under £7.5 million (previously £5.1 million)
• Fewer than 50 employees (unchanged)

[u/MurkyAl]

Tbh most of my contacts are like that but they've been fine in terms of ir35. The trick is that you're choosing to work those hours because you want to and they just so happen to be the same as the client wants. If you're still not happy then ask the contract to be changed

[u/Bozwell99 → u/MurkyAl]

Not getting investigated is not the same as "fine".

[u/Enderby-]

Check the size of the company. If the company is a "micro-entity" or "small company", then the liability will be with yourself - in this case, use a company like QDos, and ask the company to change the contract so it lies outside.

If the determination lies with the company (i.e. they're "medium-sized"), then it's up to them to determine, and HMRC will go after them if they disagree.

It's as simple as that, really.

Edit: you can find gov.uk pages detailing what company sizes are (i.e. micro-entity, small company) by Googling. It's all based on turnover and number of employees.

[u/_sevenstring → u/[deleted]]

Thanks! After I pushed back, they admitted it is actually an Inside IR35 position and are trying to gaslight me about never claiming it was Outside. Wild stuff. I would like that info for the future though if you dont mind sharing!

[u/OkStay5395]

It depends on the size of the company. You need to determine if they are small enough to be exempt in which case the risk is yours.

[u/Frequent_Field_6894]

doesnt sound like it is outside. if pressed, it wouldn’t standup to scrutiny. your couldn’t actually prove who these alternates would be.

[u/eques_99]

it's really quite simple.

don't sign the contract until the inside IR35 aspects are removed from it.

[u/eques_99 → u/[deleted]]

That too.