UTT gives HMRC another spanking.

[DaveB]

This time on their application of MOO.

UTT decision so it's binding, which could have knock on effect on the CEST.

Employment status: HMRC gets a red card | AccountingWEB

[elsergiovolador]

If think they will appeal it again and win this time.

This is because without IR35, big companies will lose access to cheap flexible workforce needed after transition period ends. When changes come into force, they can replace perm staff with inside contracts.

The agenda is also that everyone needs to be on PAYE.

[Lance]

This time on their application of MOO.

UTT decision so it's binding, which could have knock on effect on the CEST.

Employment status: HMRC gets a red card | AccountingWEB

Seeing as the CEST doesn't represent either legislation, or current case law, I can't see this judgement forcing a change.

[malvolio]

If think they will appeal it again and win this time.

This is because without IR35, big companies will lose access to cheap flexible workforce needed after transition period ends. When changes come into force, they can replace perm staff with inside contracts.

The agenda is also that everyone needs to be on PAYE.

Whereas...

Hiring good people will need two things, attractive rates and outside IR35. Otherwise you get a workforce that is under skilled, undermotivated and more expensive than a genuine contractor. Since cashflow will be vital to recover their lost incomes, adding costs to your revenue budget is not a good idea, whereas funding it from project work takes it off the bottom line.

IR35 is not a consideration for BigCo, revenue, efficiency and risk management is. Whatever happens, Off Payroll is not happening until April next year, if then. They need warm bodies starting in the next month.

HMRC's agenda may be everyone on PAYE, but nobody else's is.

[elsergiovolador]

Whereas...

Hiring good people will need two things, attractive rates and outside IR35. Otherwise you get a workforce that is under skilled, undermotivated and more expensive than a genuine contractor. Since cashflow will be vital to recover their lost incomes, adding costs to your revenue budget is not a good idea, whereas funding it from project work takes it off the bottom line.

IR35 is not a consideration for BigCo, revenue, efficiency and risk management is. Whatever happens, Off Payroll is not happening until April next year, if then. They need warm bodies starting in the next month.

HMRC's agenda may be everyone on PAYE, but nobody else's is.

I disagree with you. Getting anyone on outside IR35 contract is just a liability that any company can't have. Getting someone on inside contract involves no risk, it is also easier as you don't have to prepare outcome based contracts, deal with substitutes and so on.
Moving existing staff into inside contracts also helps, because company doesn't have to worry about sick pay, equal pay, minimum wage and other protections of employment law.
Another huge benefit for BigCo is that all the staff moved onto inside contracts will not be able to unionise.
This gives true workforce flexibility and no more worry about workers rights.

[Lance]

I disagree with you. Getting anyone on outside IR35 contract is just a liability that any company can't have. Getting someone on inside contract involves no risk, it is also easier as you don't have to prepare outcome based contracts, deal with substitutes and so on.
Moving existing staff into inside contracts also helps, because company doesn't have to worry about sick pay, equal pay, minimum wage and other protections of employment law.
Another huge benefit for BigCo is that all the staff moved onto inside contracts will not be able to unionise.
This gives true workforce flexibility and no more worry about workers rights.

BS.......

getting the right skills isn't easy. Any contractor, with niche skills and plenty of experience, and a track record of adding value, will still continue to operate outside IR35.
As for the risks.... It depends.... If you're just another bum on seat they're not going to wear it. If however, you are one person, doing one critical 'job' then they'll accept the risk
The don't want the risk of being shafted for a hundred contractors, they'll cope for one or two.

[elsergiovolador]

BS.......

getting the right skills isn't easy. Any contractor, with niche skills and plenty of experience, and a track record of adding value, will still continue to operate outside IR35.
As for the risks.... It depends.... If you're just another bum on seat they're not going to wear it. If however, you are one person, doing one critical 'job' then they'll accept the risk
The don't want the risk of being shafted for a hundred contractors, they'll cope for one or two.

When the changes get implemented, contractor will no longer be able to choose how he or she operates. It will be up to the client to decide how the engagement is going to look like and there is no incentive for clients to be on the hook for potentially getting the IR35 wrong. That means majority of work going forward will be deemed inside, as it is just easier and risk free.

[DaveB]

Seeing as the CEST doesn't represent either legislation, or current case law, I can't see this judgement forcing a change.

Not quite. HMRC's position is that if a contract exists, there is defacto MOO. Until now this has not been challenged in a tribunal so HMRC have been able to dodge the question.. This ruling establishes that this is not the case, therefore the basis on which CEST omits it is incorrect. Even if they appeal this case, I can't see anyway they can overturn that specific ruling, which means CEST is incorrect in law, which up until now has not been established.

[ladymuck]

When the changes get implemented, contractor will no longer be able to choose how he or she operates. It will be up to the client to decide how the engagement is going to look like and there is no incentive for clients to be on the hook for potentially getting the IR35 wrong. That means majority of work going forward will be deemed inside, as it is just easier and risk free.

That's not strictly true. The determination is made by the client, yes, but there are many out there (some of us have even worked with them!) who get engagement right and will involve the professional(s) they are seeing to work with at an early stage in the process.

[elsergiovolador]

That's not strictly true. The determination is made by the client, yes, but there are many out there (some of us have even worked with them!) who get engagement right and will involve the professional(s) they are seeing to work with at an early stage in the process.

If think this will be an exception rather than the rule. Only way I can see companies invest time in preparing outside engagement is if they won't be able to find talent inside.
That depends how much reserves contractors have to wait it out.
I am not as optimistic as you and I hope I am wrong on this one.