PCG article about War on public sector contractors

[Old Greg]

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.

Public sector organisations are not that united. Everyone hates the treasury.

[bobspud]

Public sector organisations are not that united. Everyone hates the treasury.

They also went to HMRC in the first place to ensure that their PSC practices where legit...
So when all of a sudden there is a massive tizzy about the very same personal service companies being a rotten dodge and are now faced with the horror of watching all their independents walk off site because of another departments behaviour they will be less than helpful to HMRC. For one thing there are exec bonuses about to go down the pan when IT refresh hits a brick wall.

[centurian]

Ok, so having read the document, there is nothing that forces the contractor to change their IR35 status, only to provide assurances that tax/ni have been accounted for - what does that mean - that you have registered for PAYE and submitted the appropriate returns - what am I missing here

I suppose the devil will be in the detail here:-

4.7 The details of the contractual provisions to be included and the assurance process for departments to carry out will be finalised and implemented within three months of the publication of the review.

[BolshieBastard]

Public sector organisations are not that united. Everyone hates the treasury.

But when the Treasury holds the purse strings...........................................

[Old Greg]

But when the Treasury holds the purse strings...........................................

.... they are disliked all the more.

[bobspud]

Ok, so having read the document, there is nothing that forces the contractor to change their IR35 status, only to provide assurances that tax/ni have been accounted for - what does that mean - that you have registered for PAYE and submitted the appropriate returns - what am I missing here

I suppose the devil will be in the detail here:-

Well done you read the document. now you see what I am saying. The government departments went to a lot of trouble to ensure that they were not producing contracts that would trap contractors on IR35. Ironically they were quite happy with the point of having a business on it's own account and equally happy that they could be free to buy every waking business hour from that service if they wanted it.

So if you are in a government contract and have a review that says this contract passes IR35 as long as you follow its working practices. Then you are in that position because thats what the department that drafted the contract for you wanted. You are fine to be a PSC, and use its advantages...

[RasputinDude]

By the time that the departmental legal bods and HR teams have mangled it and then passed it to the grubby mitts of the agencies with their legal people adding a bit more gold plating, you can be fairly sure that it'll read something along the lines of "I declare that I am operating this contract inside IR35".

That way, they are sure that they have done the right thing for them and that there will be no come back on them for not doing it right. It is the path of least resistance with the minimal risk. They don't care about the what the document actually states or what the law is, they will do whatever makes life easy and keeps their job secure.

[malvolio]

By the time that the departmental legal bods and HR teams have mangled it and then passed it to the grubby mitts of the agencies with their legal people adding a bit more gold plating, you can be fairly sure that it'll read something along the lines of "I declare that I am operating this contract inside IR35".

That way, they are sure that they have done the right thing for them and that there will be no come back on them for not doing it right. It is the path of least resistance with the minimal risk. They don't care about the what the document actually states or what the law is, they will do whatever makes life easy and keeps their job secure.

Working as being inside IR35 doesn't meet the reuirement. They are demanding all contract income is subject to PAYE and NICs. At least IR35 allows some expenses plus 5%...

The only effective way to make this work is for them to insist all contractors come via umbrellas. But that's far too simple.

[RasputinDude]

Good point.

That raises an interesting question. I make quite a lot of money now from my Plan B. Would I also have to subject the income from that to PAYE and NI as well?

Glad I'm not in the public sector.

[LisaContractorUmbrella]

Working as being inside IR35 doesn't meet the reuirement. They are demanding all contract income is subject to PAYE and NICs. At least IR35 allows some expenses plus 5%...

The only effective way to make this work is for them to insist all contractors come via umbrellas. But that's far too simple.

The simplest ideas are often the best Mal