PCG article about War on public sector contractors

[Old Greg]

At which point, Mr Old Greg says "You're treating me as an employee, where are my employee rights' protections, pensions fnding, SSP and so son..."

It's different to arguing that IR35 is a tax based on employment criteria. To make these contracts work, they are getting very close to making you a real employee.

I am not sure what the legal basis would be for enforcing these rights, any more than currently occurs for those inside IR35, but working through their Ltd.

[TestMangler]

You could always do what that bloke did with HP a few years ago. Wait until you're finished at a client you know you won't go back to and take them for unfair dismissal. When you lose spectacularly at E.T. you can file it as your IR35 defence.

The legal tests used to determine your IR35 satus are the same as those for Employment Status.

What surprises me is that no one seems to have gone the whole hog and taken someone who has lost an IR35 case and attacked the client for employment status/unfair dismissal etc. Surely that would then leave the two bodies (court & E.T.) to rationalise their tests and criteria.

[malvolio]

I am not sure what the legal basis would be for enforcing these rights, any more than currently occurs for those inside IR35, but working through their Ltd.

It's not obvious, but AIUI IR35 cases are all about tax, the use of employment indicators to deem your position is incidental and there is no linkage. If however the contract is insisting you are treated as an employee, you are suddenly back in the realms of employment law and theoretically can sue for the associated rights..

[kingcook]

What surprises me is that no one seems to have gone the whole hog and taken someone who has lost an IR35 case and attacked the client for employment status/unfair dismissal etc. Surely that would then leave the two bodies (court & E.T.) to rationalise their tests and criteria.

Not sure about unfair dismissal, but WRT tax and NIC's, here is HMRC's stance:

Where the IR35 legislation applies and the worker provides services to the Client there is no obligation on the client to account for the worker’s tax and NICs.

Taken from: HM Revenue & Customs:IR35 - Intermediaries Legislation (IR35) - Working through an intermediary, such as a service company - Consequences/responsibilities for: Worker(s), Intermediary, Client, Composite/Managed Service, Companies, Agencies and Scheme

[malvolio]

Not sure about unfair dismissal, but WRT tax and NIC's, here is HMRC's stance:

Where the IR35 legislation applies and the worker provides services to the Client there is no obligation on the client to account for the worker’s tax and NICs.

Taken from: HM Revenue & Customs:IR35 - Intermediaries Legislation (IR35) - Working through an intermediary, such as a service company - Consequences/responsibilities for: Worker(s), Intermediary, Client, Composite/Managed Service, Companies, Agencies and Scheme

Fine, except these proposed contract changes are making them do exactly that. Go figure...

[BolshieBastard]

Oh look, HMRC wanting it both ways! Who'd ever have thought that.

[Old Greg]

Is it clear whether this applies to direct contracts only?

[SueEllen]

Is it clear whether this applies to direct contracts only?

Nope.

This leaves room for government to back track when it realises that their IT systems etc will fall apart.

[bobspud]

By the way the full treasury proposal is here:

http://www.hm-treasury.gov.uk/d/tax_...iew_230512.pdf

What it appears to say is if you operate a PSC and are operating outside IR35 then its perfectly fine to extract dividends over PAYE. But they want the ability to seek assurance from you that you have paid the correct tax for your situation...

I have a contract and working practices that keep me firmly outside the IR35 problem so in a few months when they ask me am I paying the right rates of tax I will say yes simples!

For those of you interested in doing your own searching there is already an excel spreadsheet of all the posts in the MOD on contracts and the length of term and their rate. It also shows a few key board member positions that are being paid not as a PSC but direct to a personal account!!!

[BolshieBastard]

By the way the full treasury proposal is here:

http://www.hm-treasury.gov.uk/d/tax_...iew_230512.pdf

What it appears to say is if you operate a PSC and are operating outside IR35 then its perfectly fine to extract dividends over PAYE. But they want the ability to seek assurance from you that you have paid the correct tax for your situation...

I have a contract and working practices that keep me firmly outside the IR35 problem so in a few months when they ask me am I paying the right rates of tax I will say yes simples!

For those of you interested in doing your own searching there is already an excel spreadsheet of all the posts in the MOD on contracts and the length of term and their rate. It also shows a few key board member positions that are being paid not as a PSC but direct to a personal account!!!

Well, yes, it would say if you are operating outside IR35 all is fine. The issue is when HMRC start the investigation and with the aid of Departments HR falling over themselves to 'help' HMRC, you might find the ground not so solid.