So I think its finally dawned on IPSE's management

[LondonManc]

Does IPSE's IR35 protection/insurance hold up for contractors who stay in the PS and find themselves suddenly inside IR35, on the assumption HMRC go fully 'retrospective'?

I've floated the question among some people I know who are still there, and planning to work inside IR35 (if it happens). The sentiment I'm getting is that IPSE will be there to protect them should the tulip hit the fan. Reasonable enough? IPSE's silence would suggest so. Either that or they are afraid to spook the herd by saying otherwise.

They're not going to exactly confirm that their insurance is worth diddly squat are they? Given that we're not sure (although eek's indicating a 95% chance of retro-action), it's probably wise that IPSE have kept their powder dry. Could this lead to another PPI-style rebate from IPSE if the insurance proves worthless? Unfair to speculate. Buckle up and grab the popcorn but I think the advice to get your last payment before April is absolutely valid.

[teapot418]

Does IPSE's IR35 protection/insurance hold up for contractors who stay in the PS and find themselves suddenly inside IR35, on the assumption HMRC go fully 'retrospective'?

I've floated the question among some people I know who are still there, and planning to work inside IR35 (if it happens). The sentiment I'm getting is that IPSE will be there to protect them should the tulip hit the fan. Reasonable enough? IPSE's silence would suggest so. Either that or they are afraid to spook the herd by saying otherwise.

My understanding is that IPSE/QDOS insurance is tax investigation cover. So if HMRC go 'retrospective', you're covered. If you want to challenge your current status, the insurance isn't going to cover you, as it isn't a tax investigation (which I think the forum question was about). But IPSE have said that they will be looking for cases to support.

[eek]

One of my bugbears with IPSE is their inability to grasp that HMRC does not regard VAT (unless you are selling directly to the general public) as a tax in their eyes its cost neutral (yep that isn't true for banks and the public sector but HMRC's view in both cases is meh).

One of the other things I know from running consultations over the years (and chats elsewhere confirm that HMRC very much follow this logic) is that if someone gets something fundamentally wrong, you start discounting the rest of what they've written as equally invalid..

Now I'm writing a FAQ for the Public sector changes (as clearly no one else is going to) and I go and double check a point to find:-

https://www.ipse.co.uk/news/ir35-pub...rnment-changes

How will VAT be affected?

PSCs will still have to charge and pay VAT, even if they are caught by the new rules. This means the exchequer will be getting significantly more tax than if the worker were engaged as an employee.

give me strength....

[Fred Bloggs]

For those who don't frequent the IPSE forums and are members - someone (not me) has just posted a real question. Wait a few hours I suspect the answer will be illuminating...

Illuminating as in -

We aren't answering that, it is confidential

or

We aren't allowing this post without moderation

or

We aren't allowing this post because it is against "add your own obscure rule that nobody ever read before here"

or

We aren't allowing that post here as it is insulting to one of TPTB

or maybe just plain old -

We aren't allowing that post here because there is a notice up there saying so (that you can't actually see the notice because the link to the page you clicked on doesn't actually show it, but you are still expected to have read it anyway)

[SimonMac]

One of my bugbears with IPSE is their inability to grasp that HMRC does not regard VAT (unless you are selling directly to the general public) as a tax in their eyes its cost neutral (yep that isn't true for banks and the public sector but HMRC's view in both cases is meh).

One of the other things I know from running consultations over the years (and chats elsewhere confirm that HMRC very much follow this logic) is that if someone gets something fundamentally wrong, you start discounting the rest of what they've written as equally invalid..

Now I'm writing a FAQ for the Public sector changes (as clearly no one else is going to) and I go and double check a point to find:-

https://www.ipse.co.uk/news/ir35-pub...rnment-changes



give me strength....

Not sure how VAT is revenue neutral for HMRC it brings in over £120bn to the treasure, behind only NI and income Tax

https://www.gov.uk/government/upload...etin_Final.pdf

[eek]

Not sure how VAT is revenue neutral for HMRC it brings in over £120bn to the treasure, behind only NI and income Tax

https://www.gov.uk/government/upload...etin_Final.pdf

At best VAT is utterly irrelevant to any IR35 argument. At worst it leaves the rest of the consultation response being treated as ill-informed gibberish...

Looking at the contempt with which IPSE's arguments were listened to I suspect the latter is what happened.

[Fred Bloggs]

Let's cut to the chase here. Over the next year or two as contracts end or people get fed up and move, the majority of public sector contractors are going to be employees. Do employees need IPSE? TPTB there pretend they have lots of other super duper stuff to offer so people will flock to join anyway, tax protection or not. However, the apparently absent rush of all those millions of self employed people who they thought would join just hasn't happened. Has it? TPTB won't disclose that. It is confidential information, of course.

[Fred Bloggs]

At best VAT is utterly irrelevant to any IR35 argument. At worst it leaves the rest of the consultation response being treated as ill-informed gibberish...

Looking at the contempt with which IPSE's arguments were listened to I suspect the latter is what happened.

I know employment taxes in the UK are insidious and extremely high, but since when did an employer pay VAT on an employee's salary?

[eek]

I know employment taxes in the UK are insidious and extremely high, but since when did an employer pay VAT on an employee's salary?

Now that is a valid argument - its not however the one IPSE has down there. The mitigating comment from HMRC would be that VAT is not actually our money but something we collect on behalf of HMRC...

Also the logic goes - Local authority pays £100 VAT to Agency, Agency pays £80 VAT to contractor - we pay £80 to HMRC, Agency pays £20 to HMRC the local authority claims the £100 back from HMRC see https://www.gov.uk/government/public...ess-activities

Hence in this world its a accounting issue more than actual revenue....

[Fred Bloggs]

Surely, once you are all on the agency or umbrella payroll, there will be no VAT to pay to the employee? When I was an employee of VeryBigCo PLC, they never paid me any VAT with my salary?