IR35 scrapped ... is this for real?

[GitMaster69]

Good news. I'm not following this much since I've got life stuff going on at the moment but I have 2 questions:

- is ir35 scrapped for public sector contracts too?
- if it is indeed scrapped for public sector contracts from April 2023, what happens to contracts started before that date? I'm starting a contract in PS in a few weeks and it's inside ir35; so what happens in this case? Does it stay inside until April 2023 and then at the first renewal it's not inside anymore?

I think it's similar to as if you were employed and tried to go contracting with the same client. ir35 red flag and hard to defend, but possible

[sadkingbilly]

Good news. I'm not following this much since I've got life stuff going on at the moment but I have 2 questions:

- is ir35 scrapped for public sector contracts too?
- if it is indeed scrapped for public sector contracts from April 2023, what happens to contracts started before that date? I'm starting a contract in PS in a few weeks and it's inside ir35; so what happens in this case? Does it stay inside until April 2023 and then at the first renewal it's not inside anymore?

1 - no
2 - no

[Lance]

Absolutely happy about the news,
Finally we will be able to work for public sector again
Lots of high paying London jobs might be outside again

totally stunned it happened but was long overdue, that ir35 was a sham and stunned UK's growth.

scrapping highest tax rate is a good decision too, might make permament route profitable again for some, rather than being forced to go contracting, and pay 10% effective rate

carrot rather than a stick!

I think you're overestimating the harm.
It has in no way stunted any UK growth. Brexit, Covid, financial crisis and lack of investment in critical infrastructure, coupled with desperately bad productivity, are the causes of poor growth, not IR35. If anything, increased rates over the last 3 years has improved GDP.

It has harmed the pockets of many contractors. But none of them were put on the breadline.
And in reality all that's changing is the responsibility for the decision making. Granted that many clients were overcautious in their assessments, but don't forget that plenty of other clients were far more pragmatic. All my clients, public and private, in that timeframe were happy with determining me outside because a) I really was, and b) they wanted me but didn't want to pay 30% more).

[northernladuk]

Good news. I'm not following this much since I've got life stuff going on at the moment but I have 2 questions:

- is ir35 scrapped for public sector contracts too?
- if it is indeed scrapped for public sector contracts from April 2023, what happens to contracts started before that date? I'm starting a contract in PS in a few weeks and it's inside ir35; so what happens in this case? Does it stay inside until April 2023 and then at the first renewal it's not inside anymore?

IR35 isn't scrapped. It's been rolled back to pre legislation days so you'd assume that includes PS
It stays inside until the work has been done. Just because the person making the decision has changed it doesn't mean the gig changes. If the PS did the right checks and deemed it inside then April won't change anything, it's inside. All that changes is you now make the decision and by changing from inside to outside you'd be incorrectly determining the status.

If something fundamentally changes about the engagement then there is a chance it will go outside but I very much doubt it. If it does just so you can say outside then something is going to be a sham and it's likely it will be your outside determination.

Not all the answers are there but if you understand what is happening and apply to your situation sensibly then they can be found.

[eek]

IR35 isn't scrapped. It's been rolled back to the prior to 2017 public sector changes so you'd assume that includes PS
It stays inside until the work has been done. Just because the person making the decision has changed it doesn't mean the gig changes. If the PS did the right checks and deemed it inside then April won't change anything, it's inside. All that changes is you now make the decision and by changing from inside to outside you'd be incorrectly determining the status.

If something fundamentally changes about the engagement then there is a chance it will go outside but I very much doubt it. If it does just so you can say outside then something is going to be a sham and it's likely it will be your outside determination.

Not all the answers are there but if you understand what is happening and apply to your situation sensibly then they can be found.

- slight fix in bold and as I haven't posted on this thread - I'll post the same here again and sort out a sticky once Cojak knows where to post it

1) if the contract is currently inside IR35 and you have a SDS saying that it's inside it will be after April because that's what the client thinks
Now you could argue that the reasons why the decision is incorrect are valid but it's going to be a hard argument to win with HMRC when the end client doesn't agree with you.

2) if the contract is inside because of a refusal to work with Personal Service Companies then it depends on how the end client wishes to play things.
They may feel that the ban should continue - in which case nothing will change.
They may feel they can allow Personal Service Companies to be used - in which case you will need to decide if your working practices make the contract inside or outside.

If your current contract is inside IR35 and you want an outside contract come 6th April 2023 - the safest approach is going to be to leave your current contract and find a new one...

[northernladuk]

- slight fix in bold and as I haven't posted on this thread - I'll post the same here again and sort out a sticky once Cojak knows where to post it

Good point.

1) if the contract is currently inside IR35 and you have a SDS saying that it's inside it will be after April because that's what the client thinks
Now you could argue that the reasons why the decision is incorrect are valid but it's going to be a hard argument to win with HMRC when the end client doesn't agree with you.

2) if the contract is inside because of a refusal to work with Personal Service Companies then it depends on how the end client wishes to play things.
They may feel that the ban should continue - in which case nothing will change.
They may feel they can allow Personal Service Companies to be used - in which case you will need to decide if your working practices make the contract inside or outside.

Coverd both situations nicely there. We've already seen a raft of posts not understanding number 1) and I am sure every single inside contractor is now thinking they are outside and it just won't be the case. This is great news for us but April the 6th does not fix everything for every inside gig. It's going to get very tedious explaining this to people. It's not rocket science so I'm hoping some will work that out for themselves.

[PCTNN]

IR35 isn't scrapped. It's been rolled back to pre legislation days so you'd assume that includes PS
It stays inside until the work has been done. Just because the person making the decision has changed it doesn't mean the gig changes. If the PS did the right checks and deemed it inside then April won't change anything, it's inside. All that changes is you now make the decision and by changing from inside to outside you'd be incorrectly determining the status.

If something fundamentally changes about the engagement then there is a chance it will go outside but I very much doubt it. If it does just so you can say outside then something is going to be a sham and it's likely it will be your outside determination.

Not all the answers are there but if you understand what is happening and apply to your situation sensibly then they can be found.

Thanks, makes sense.

So, would it be an option to let the currently inside ir35 contract finish after April and then ask the client to issue another different (and differently worded) contract where now the ir35 status is not deemed inside by the client? Or would that also be a red flag and something hmrc would probably pick up?

[northernladuk]

Thanks, makes sense.

So, would it be an option to let the currently inside ir35 contract finish after April and then ask the client to issue another different (and differently worded) contract where now the ir35 status is not deemed inside by the client? Or would that also be a red flag and something hmrc would probably pick up?

If the working practices are the same then nothing has changed. This is IR35 101 and we've said this from the first day it came in. WP trumps contract so doesn't matter what contract you have, if you are working the same as before and the clients expecation of the gig hasn't changed then your status has not changed.

My experiences on PS gigs is they won't allow subs and generally want you to do what you are told. They want a temp not an outsourced specilist. That isn't going to change so nor will the status. You need to get a new gig that is looking for an outside person.

[Lance]

Thanks, makes sense.

So, would it be an option to let the currently inside ir35 contract finish after April and then ask the client to issue another different (and differently worded) contract where now the ir35 status is not deemed inside by the client? Or would that also be a red flag and something hmrc would probably pick up?

and this is where it falls down.

Asking the client issue a differently worded contract....
- fails to understand who owns/issues outside IR35 contracts
- fails to understand the difference between employee and supplier
- fails to understand enough about IR35 to risk staying with the same client even if they were happy (why wouldn't they be? It's no longer their problem) IMO


IANAL

[northernladuk]

and this is where it falls down.

Asking the client issue a differently worded contract....
- fails to understand who owns/issues outside IR35 contracts
- fails to understand the difference between employee and supplier
- fails to understand enough about IR35 to risk staying with the same client even if they were happy (why wouldn't they be? It's no longer their problem) IMO


IANAL

It was bad enough in the old days trying to get experienced contractors to understand the basics. We've got 2 years of contractors that have never had to give a thought to it to advise now. Maybe current way of doing it was the best way