IR35 letters going out to GlaxoSmithKline contractors

[BlueSharp]

I've a felling, if GSK is anything like another large pharma in the NW, there could be quite a few people there with 4 years plus behind them.

Pandora's box has been opened for private sector ir35.

Agreed.

Look at the numbers.

1500 at GSK.

For at least one year, perhaps closer to two.

Average earnings £70k?

Average tax paid outside IR35, perhaps 20% = £14k

Average tax due inside IR35, perhaps 35% = £24.5k

Say £10k pa difference.

Not all 1500 will be caught but HMRC policy says 1350 will.

That's £13.5m.

Multiply GSK by 113 to get to HMRC's number.

Soon you're talking real money.

HMRC policy says 1350 will be caught, but looking at HMRC's success rates at tribunal that figure is closer to 10. It will be interesting to see if the scare policy increases the number declaring inside ir35 or this new 'BBC' type enforcement approach will produce more results.

[Liberator]

I've a felling, if GSK is anything like another large pharma in the NW, there could be quite a few people there with 4 years plus behind them.

A very brief search on linked in and the first three people come in at 2 years 2 months x 2 and 3 years 6 months.

Very tasty for HMRC

I know someone who's been contracting there for about 15 years

[jamesbrown]

My understanding is that HMRC would have to take a contractor to tribunal for each engagement (single or multiple renewals), they could not go to a single tribunal for different engagements across different clients. Is that correct?

For different clients, generally, yes. Not for renewals at the same client, as that involves a single relationship that could have the hallmarks of a deemed employment. However, I think the recent FTT of the urologist (Mantides?) involved two separate clients/hospitals and received a split decision. There is also case law for a split decision on renewals.

[northernladuk]

Pandora's box has been opened for private sector ir35.



HMRC policy says 1350 will be caught, but looking at HMRC's success rates at tribunal that figure is closer to 10. It will be interesting to see if the scare policy increases the number declaring inside ir35 or this new 'BBC' type enforcement approach will produce more results.

We've to to take a step back and just remember who is involved here. This isn't about just IT contractors. I don't imagine GSK is much different but my client reckons it could be up to an 80% inside determination but that is everyone that's running through a PSC. Here that includes delivery drivers, warehouse pickers, first/second line service desk, customer support desks staff and a raft of general admin bods. They outnumber highly skilled IT staff 3 or 4 to 1.

I very much doubt many of them have any insurances in place and with heading for an inside determination then I'm sure there will be a load that will settle having being (arguable rightly) caught.

Thought it was just worth mentioning in case people are thinking the 1500 are just IT contractors. If there are a load of drivers all on the same contract doing the same thing it would be pretty easy to lump them all into one investigation, or at least test one and then smack the rest with the ruling.

[webberg]

HMRC policy says 1350 will be caught, but looking at HMRC's success rates at tribunal that figure is closer to 10. It will be interesting to see if the scare policy increases the number declaring inside ir35 or this new 'BBC' type enforcement approach will produce more results.

I think that to compare a case involving a BBC journalist/front of camera talent, with a group of IT people doing more generic jobs, is inappropriate.

The ITV case of Ms Kelly said that she was the show and was genuinely self employed.

The BBC case of Ms Ackroyd said that the show would have run with or without her.

Which end of that scale would you put people working at GSK?

[BlueSharp]

I think that to compare a case involving a BBC journalist/front of camera talent, with a group of IT people doing more generic jobs, is inappropriate.

The ITV case of Ms Kelly said that she was the show and was genuinely self employed.

The BBC case of Ms Ackroyd said that the show would have run with or without her.

Which end of that scale would you put people working at GSK?

I agree, hence the single quotes around the BBC. I was more referring to the, go after all the contractors at a single client approach. Having a quick look at Ms Ackoroyds case, it looks like she lost on a lot more than a generic type role. Rather a 7 year fixed term contract with a minimum number of day per year worked, needing permission to work for someone else, clothing allowance, no realistic substitution and no real control over her work. Some items that a GSK contractor would not have as a negative.

Why was Ms Christa Ackroyd deemed inside of IR35? - Clever Accounts Blog

[simes]

……. unless/until we get a government that reigns in HMRC and we get some sanity on this topic.

They do rather seem to be running amok currently.

What with the 20 year back dating of Loan Charges, and then the kicking of a self authored can, that they can neither understand nor police themselves, down the road for multiple entities to fathom under the duress of penalties if they get it wrong.... Must admit, it doesn't seem very British 'n' all that.

I am very disappointed in the country at present.

[webberg]

I agree, hence the single quotes around the BBC. I was more referring to the, go after all the contractors at a single client approach. ]

I agree with most of this.

You have to put this in the context of the whole campaign.

HMRC absolutely knows that disputes around IR35 are all dealt with on a personal level.

However they have assumed - for the purposes of maximising revenue - that a large firm like GSK will have contractors in roles that are broadly similar enough that a Tribunal would decline to hear any case that they decide is essentially a repeat of an earlier one.

Being flippant, if Contractor A is inside IR35 because they are supervised by the head of IT in GSK, but Contractor B says that can't apply because he/she sits on a different floor, the chance of Contractor B getting a hearing are low.

Works the other way as well. If Contractor A is outside, then so is Contractor B.

I suspect HMRC considers both inside and that a "win" against Contractor A will be enough to take out any claim from B, C, D, E, etc.

So yes in theory - all separate. In practice with large departments in large companies, less so.

[ShandyDrinker]

I agree with most of this.

You have to put this in the context of the whole campaign.

HMRC absolutely knows that disputes around IR35 are all dealt with on a personal level.

However they have assumed - for the purposes of maximising revenue - that a large firm like GSK will have contractors in roles that are broadly similar enough that a Tribunal would decline to hear any case that they decide is essentially a repeat of an earlier one.

Being flippant, if Contractor A is inside IR35 because they are supervised by the head of IT in GSK, but Contractor B says that can't apply because he/she sits on a different floor, the chance of Contractor B getting a hearing are low.

Works the other way as well. If Contractor A is outside, then so is Contractor B.

I suspect HMRC considers both inside and that a "win" against Contractor A will be enough to take out any claim from B, C, D, E, etc.

So yes in theory - all separate. In practice with large departments in large companies, less so.

While I can somewhat understand the points above, for some larger IT teams they may have a number of contractors sourced via different agencies, potentially all with different contracts although sure, you have all the nuances of contracts in between and the working practices should ultimately dictate per the look through.

However, I have used the terms of my agency contract to say to more than 1 client in the past that I will, for example, be working from home x-days per week, or that I will refuse work as it isn't what was stipulated in the contract, even under a broad schedule.

What I am driving at with the above is that unless all contractors are engaged via the same agency and all parties within the chain are the same then I struggle to see how HMRC take this approach (or indeed a Tribunal).

If this would (as in many other areas under the current government) yet another way of preventing people seeking a fair hearing or justice then god help us all.

[cojak]

I know someone who's been contracting there for about 15 years

Ooh feck.