MoD and Public Sector

[LondonManc]

ehh, so youre telling me Cap couldn't hire a contractor and place them on site at a PS client?

CG could hire a contractor but said contractor would have to treat the contract as inside IR35 (if they haven't been paid by CG as such already). The only get-out for the consultancies to get contractors on board is a decent day rate and expenses covered, which would be very appealing to those who work away from home.

[smalldog]

Of course not. But that contractor would be deemed to be caught by IR35 and so CAP would have to pay them as a permie.

why do you assume that? Surely they could enter into a contract that does not fall inside IR35. so Cap get their double day rate and pay the contractor their day rate outside IR35.

[MrMarkyMark]

why do you assume that? Surely they could enter into a contract that does not fall inside IR35. so Cap get their double day rate and pay the contractor their day rate outside IR35.

We are not assuming anything, we have actually read the proposals / regulations?

I suggest you do the same.

[gables]

Of course not. But that contractor would be deemed to be caught by IR35 and so CAP would have to pay them as a permie.

With the added bonus of the employer NI coming out if the day rate.

We are not assuming anything, we have actually read the proposals / regulations?

I suggest you do the same.

IIRC there is exactly this scenario in the proposals

[smalldog]

We are not assuming anything, we have actually read the proposals / regulations?

I suggest you do the same.

you are missing an important point. The contractor working for CAP is part of say a fixed price contract not an explicit day rate. So they aren't bodyshopping, they are providing resources to deliver a work package and CAP are paying them a day rate not the PS paying CAP a day rate. The individual is removed from the supply chain in this case. That's the scenario Im talking about, not bodyshopping day rate with the individual in the supply chain, agree in that case its no different to an agency worker.

[eek]

you are missing an important point. The contractor working for CAP is part of say a fixed price contract not an explicit day rate. So they aren't bodyshopping, they are providing resources to deliver a work package and CAP are paying them a day rate not the PS paying CAP a day rate. The individual is removed from the supply chain in this case. That's the scenario Im talking about, not bodyshopping day rate with the individual in the supply chain, agree in that case its no different to an agency worker.

You had best go and read the consultation document especially Example 3 on I think page 19...

[smalldog]

You had best go and read the consultation document especially Example 3 on I think page 19...

ok so just seen example 3, I was looking at a 3 pager. Probably out of date. still stand by what I said CAP will be rubbing their hands together, making a tidy profit on lots more work coming their way.

I would imagine there is some nice creative sub contracting that could take place.

[eek]

ok so just seen example 3, I was looking at a 3 pager. Probably out of date. still stand by what I said CAP will be rubbing their hands together, making a tidy profit on lots more work coming their way.

I would imagine there is some nice creative sub contracting that could take place.

Given that there is no documentation yet beyond the initial consultation document that Example 3 is valid.

Also every consultancy I know would love to find a means to apply pressure on contractors for them to join that consultancy permanently.

[gables]

ok so just seen example 3, I was looking at a 3 pager. Probably out of date. still stand by what I said CAP will be rubbing their hands together, making a tidy profit on lots more work coming their way.

I would imagine there is some nice creative sub contracting that could take place.

CAP may well be if they can resource the requirements, us contractors (if we engage) will be taxed under IR35 so will lose out unless day rates increase but presumably CAP's rate might increase.....

So the ironic thing is that by endeavouring to get more tax revenue from us, the PS might ending up spending more, so I wonder if the net effect for the treasury would be loss?

[Lance]

So the ironic thing is that by endeavouring to get more tax revenue from us, the PS might ending up spending more, so I wonder if the net effect for the treasury would be loss?

If this happens the end net effect will be greater GDP (if measured in £ anyway). Maybe that's the plan - spend more, get more tax.

Net effect for treasury.. Who knows. With dividend tax up by 7% they're gaining anyway.