So I think its finally dawned on IPSE's management

[eek]

Private companies cannot afford to pay the big boys fees or to have us as 'employees'.

And they won't need to unless this is fought correctly. Come April 2019 contractors will still be able to contract but companies will be answering the question "is this role inside IR35" with the definitive answer Yes.

For answering Yes doesn't cost said end client / agency anything (assuming you don't try for employee rights) but answering No has the risk of a tax tribunal (lots of expense, work, sidetracking you from the day job) and £10-50,000 of your company's money riding on it.

Yep it's Eek's broken record again. But at some point it may start getting through to people....

[mudskipper]

From IPSE's CEO's email to members yesterday

Make no mistake we will be seeking legal advice to find out if we can challenge whether it’s fair for a contractor to be taxed like an employee – without receiving employee rights.

From IPSE's response to the consultation

The cost of defending a claim at tribunal vary depending on the case, but they are rarely insignificant. If only one determination is challenged at tribunal, it is likely to use a significant proportion of the £500,000 that HMRC has earmarked for implementing the new rules.

...

Further tribunal costs will result from those seeking employment rights, as a result of being taxed like an employee. (Section 10 explores this point in more detail.)

From IPSE's post earlier in this thread

It is early days and we'll be working on a full analysis and response, and we'll be continuing to lobby with evidence-based research and hand-in-hand with other industry bodies. However "We can't be treated as businesses and taxed as employees." is a pretty good starting point.

IPSE spent nearly £1m backing a member all the way to the House of Lords before, and we'd be prepared to do the same again (to the Supreme Court).

I'm unsure where the idea that IPSE has ruled out fighting for employment rights for IR35 caught PS roles has come from. It is very much on the table.

To repeat my earlier post - no matter how often you repeat that IPSE are not considering this, it remains untrue. It is very much on the table.

[eek]

To repeat my earlier post - no matter how often you repeat that IPSE are not considering this, it remains untrue. It is very much on the table.

Would you like me to post the links to comments on the IPSE forums... but that's beside the point.

I'm waiting for when IPSE grasps that that's just about the only game in town - the other options (while I know they need to be covered) have already been war gamed with responses prepared.

[malvolio]

Would you like me to post the links to comments on the IPSE forums... but that's beside the point.

I'm waiting for when IPSE grasps that that's just about the only game in town - the other options (while I know they need to be covered) have already been war gamed with responses prepared.

Loving the idea that you at nothing to do with IPSE while also posting on their forums criticising every proposal on the table. You can't have it both ways...

[youngguy]

I think expecting action now is unfair, they are in shock and immediate action won't work nor is it sensible until we see the detail on December 5th.

.

Agreed. Given April is 5 months away I'd like to see some evidence of a plan this side of Xmas,with a view to action from Jan onwards.

[eek]

Loving the idea that you at nothing to do with IPSE while also posting on their forums criticising every proposal on the table. You can't have it both ways...

What posts on their forums criticising anything? My only post today was what is the default response to a FOI regarding business relationships.

I am, however, finding it highly amusing how its slowly dawning on people how few options there are...

[jonnyboy]

So I am trying to get my head around this all....

1) We are PSC companies, so working in the PS means we are caught by IR35 - have to pay full PAYE tax on both sides of the fence. - yes?
2) In 2019 (ish) it goes private - all PSCs are caught by IR35 regardless of where they work, so pay full tax on both sides of the fence - yes?
3) A PSC is a company where (following the flow chart) the person owning the company has to do the work and is under SCD - yes?
4) And the broad definition of a PSC is service rather than product - this 20% materials consumed - yes?

So what I am having a problem with is...

1) Plumber bob turns up with Bobs Plumbing Ltd, and is told to fit that leaky pipe. How are they under the rules not a PSC and under SCD?
2) I employ Mini-me. I now have the option to not do the work myself. So am I no longer a PSC? When is a PSC not a PSC?
3) What about if I send some of the coding overseas to Cheapy-Indian-Coders Ltd - not doing the work myself, passes test Number 1?
4) The consultation document gives the example of a consulancy putting 6 or 20 (whatever) bods in to do a project and each is treated as a IR35 risk - so how are the big consulancy groups or even say large software houses who as part of their service send consultants to site (they sell say a pathology software package and provide 10 days installation and training) not inside IR35?
5) If its cos there is software being purchased, what is the difference between me writing software (bespoke) and the company selling it (4)

What am I missing?

[NigelJK]

is this role inside IR35" with the definitive answer Yes.

That's the crux tho' isn't it? What if the 'agency' were to tell the end client that there were 2 options on the table.

1. They engage the 'resource' as an outside IR35 for £X, and their contract with the end client stipulates they will only provide said outside resources and that should be sufficient test for HMRC for those that have to make the 'decision'.

2. They roll over (and take a significant hit on their profits) and and engage on an always inside basis for £X + 30%.

This allows the agency to promote their business on the basis that the decision actually is forgone and everyone knows where they stand.

BTW I'm on your side eek. I never needed help from the IPSE ancestors and did plenty of face/palm when they promoted the 'opt out' mechanism as a great win.

It is interesting to see the amount of scaremongering going on tho'. Personally I think we are too good a cash cow to let go from the agency point of view, and know of a few seasoned recruiters who have some idea how to sell us properly, even given the poor media coverage of our situation.

[bobspud]

So because I like talking to strangers I have been having a chat to one of the owners of a large contract agency. Not the biggest but big enough. His view is the employee entitlements will be just another cost they pass direct to the end client. I suggested he's going to find that the market won't be as passive as he is expecting and showed a few reasons why.

I think the next chink in the armour of this mess is convincing a few of the agency's that they will be in a far better position if they can start offering contracts based on outcomes going forward as despite all the people on the market the real talent is slim and being in a position where you can beat capita because you can attract that talent will be a real growth opportunity...

Greed is good.

[youngguy]

That's the crux tho' isn't it? What if the 'agency' were to tell the end client that there were 2 options on the table.

1. They engage the 'resource' as an outside IR35 for £X, and their contract with the end client stipulates they will only provide said outside resources and that should be sufficient test for HMRC for those that have to make the 'decision'.

2. They roll over (and take a significant hit on their profits) and and engage on an always inside basis for £X + 30%.

This allows the agency to promote their business on the basis that the decision actually is forgone and everyone knows where they stand.

BTW I'm on your side eek. I never needed help from the IPSE ancestors and did plenty of face/palm when they promoted the 'opt out' mechanism as a great win.

It is interesting to see the amount of scaremongering going on tho'. Personally I think we are too good a cash cow to let go from the agency point of view, and know of a few seasoned recruiters who have some idea how to sell us properly, even given the poor media coverage of our situation.

Will agencies do that and will Gov accept every contractor getting a 30% rise though?

I suspect agencies will also be trying to put their margins up given they will have a lot more admin and accounting to do.