Staying in the same public sector contract after April 2017

[SueEllen]

Newbie here. Have been reading the threads with interest over the past few days. Wondering if anyone has done a freedom of Information request to HMRC to ask how many consultants they have that are affected by their rulings?

That information would take too long to collect so you won't get a reply but if you feel like asking HMRC Freedom of Information questions then you can use the site whatdotheyknow.com

Also if your MP is on the right committee or even if they are not asking the question so someone's whose MP is on such a committee can point it out to them is always helpful.

[teapot418]

What galls me about these possible changes, is not so much that HMRC want to class me as deemed employed and tax my £500pd as PAYE but that it also wants to class me as a company and make me pay employer NICS, make me have an accountant, insurance etc (OK last ones are kind of optional, but not really) and the costs associated with being a company.

If we are to be classed as deemed employees, for me the liability of employer NICS should rest with the 'employer', the client. If i'm no longer employed by my own LTD, then neither I or my company should be liable for the employer NICS. I can see this being one of the areas that could get challenged.

And before a smart-alec says, but your £500 pd is all inclusive, I'd argue yes .... if it goes to my company and it employs me and has the liability to ensure it picks up the correct NICS ... but we know this is where we've been for years and that is what Hector is trying to stop.

So glad I'm not in the public sector.

Cake and eat it anyone?

AIUI, the payer is responsible for Employers' NI. So agents will either need to renegotiate with the client, or issue you a new contract on a lower rate if they are not going to be out of pocket.

[NHS1979]

One of the worst parts of all of this is the lack of clarity. Simply through not granting an amnesty on ir35 status pre-6th April they have caused chaos. Faced with the fear of retrospective investigation people are streaming away from the public sector in droves. Even those who plan to continue working with the public sector are exiting out of current critical programmes and pieces of work so they can move to another organisation and 'firewall' off their pre-April 6th contracts and status.

I've personally been offered a really good fixed term PAYE role by the NHS client I'm currently working with (current role is outside IR35 via an agency). No one can even tell me if that is safe so currently planning to turn that down and leave to work elsewhere in the nhs (whatever the irr35 status of that role)

[malvolio]

One of the worst parts of all of this is the lack of clarity. Simply through not granting an amnesty on ir35 status pre-6th April they have caused chaos. Faced with the fear of retrospective investigation people are streaming away from the public sector in droves. Even those who plan to continue working with the public sector are exiting out of current critical programmes and pieces of work so they can move to another organisation and 'firewall' off their pre-April 6th contracts and status.

I've personally been offered a really good fixed term PAYE role by the NHS client I'm currently working with (current role is outside IR35 via an agency). No one can even tell me if that is safe so currently planning to turn that down and leave to work elsewhere in the nhs (whatever the irr35 status of that role)

A Fixed Term Contract is employment with a limited life - no more than two years - and some limitations on benefits. It is therefore completely immune to IR35. OTOH you are treated as an employee (appraisals and other HR make-work, limited holiday entitlement, limited redundancy options...) so it is also the worst possible contract to have; you're far better off with a conventional contract via an umbrella

[bobspud]

One of the worst parts of all of this is the lack of clarity. Simply through not granting an amnesty on ir35 status pre-6th April they have caused chaos. Faced with the fear of retrospective investigation people are streaming away from the public sector in droves. Even those who plan to continue working with the public sector are exiting out of current critical programmes and pieces of work so they can move to another organisation and 'firewall' off their pre-April 6th contracts and status.

I've personally been offered a really good fixed term PAYE role by the NHS client I'm currently working with (current role is outside IR35 via an agency). No one can even tell me if that is safe so currently planning to turn that down and leave to work elsewhere in the nhs (whatever the irr35 status of that role)

For everyone reading this post and thinking "Me Too" you need to consider the following strategy:

1) Are you REALLY outside now? (As in would I bet my house and marriage on that?)
2) Have you got the paperwork and evidence ready to back this up?
3) Do you have insurance through QDOS or one of the other clever insurers that is well mentioned here?
4) Do you like annoying HMRC? And are you interested in being a test case to prove them wrong?

If you can answer a solid YES to all of the above then stay where you are and wait for whatever ridiculous thing that HMRC try next. You can then use the same evidence when talking to the PSC to say look you are wrong and here is some cases from UBER and City Sprint that didn't work so well for the paying client trying do to exactly what you are doing now...

But if any of the above have answers of NO then you are in a situation where you probably are the ones that HMRC are targeting and there is probably hurt on the way and you need to consider your options more carefully.

Also dont forget that there has already been a wealth of difference between what the MOD chose to do vs TFL. So bailing in a panic could easily cause you as much financial hardship as being caught next year.

I agree you shouldn't leave yourself open to a retrospective grab but they only get to do that if you were always inside.

[teapot418]

A Fixed Term Contract is employment with a limited life - no more than two years - and some limitations on benefits. It is therefore completely immune to IR35. OTOH you are treated as an employee (appraisals and other HR make-work, limited holiday entitlement, limited redundancy options...) so it is also the worst possible contract to have; you're far better off with a conventional contract via an umbrella

It does rather depend on the terms of the FTC. But I think OP's concern is that a FTC with the same organisation (effectively becoming an employee) would raise a question about whether the current contract 'should be caught' - i.e. a retrospective claim is likely. No-one can answer that for sure.

[NHS1979]

For everyone reading this post and thinking "Me Too" you need to consider the following strategy:

1) Are you REALLY outside now? (As in would I bet my house and marriage on that?)
2) Have you got the paperwork and evidence ready to back this up?
3) Do you have insurance through QDOS or one of the other clever insurers that is well mentioned here?
4) Do you like annoying HMRC? And are you interested in being a test case to prove them wrong?

If you can answer a solid YES to all of the above then stay where you are and wait for whatever ridiculous thing that HMRC try next. You can then use the same evidence when talking to the PSC to say look you are wrong and here is some cases from UBER and City Sprint that didn't work so well for the paying client trying do to exactly what you are doing now...

But if any of the above have answers of NO then you are in a situation where you probably are the ones that HMRC are targeting and there is probably hurt on the way and you need to consider your options more carefully.

Also dont forget that there has already been a wealth of difference between what the MOD chose to do vs TFL. So bailing in a panic could easily cause you as much financial hardship as being caught next year.

I agree you shouldn't leave yourself open to a retrospective grab but they only get to do that if you were always inside.

At least two of those are a no, so I am considering options carefully. The two options I have been offered by the current client are 1) move to a fixed term PAYE role, or 2) go away for a few weeks and come back. Based on these message boards it sounds like the first is risky as still with the same client I was outside IR35 with, and the second is pointless and just playing games (so already discounted).


I've been given a deadline to decide on the fixed term Paye offer. I feel like it sounds too risky to accept, and I am better off leaving the work half done and finding some new work somewhere else in the NHS.

[northernladuk]

At least two of those are a no, so I am considering options carefully. The two options I have been offered by the current client are 1) move to a fixed term PAYE role, or 2) go away for a few weeks and come back. Based on these message boards it sounds like the first is risky as still with the same client I was outside IR35 with, and the second is pointless and just playing games (so already discounted).


I've been given a deadline to decide on the fixed term Paye offer. I feel like it sounds too risky to accept, and I am better off leaving the work half done and finding some new work somewhere else in the NHS.

Here is an idea, why not go and find work in the PS? Contractors that rely solely on the PS are just (and possibly quite rightly) what they are targeting.

I can't see how getting new work in the NHS is going to help you in any way. I also don't see how a 2 week break makes any difference either.

[NHS1979]

Here is an idea, why not go and find work in the PS? Contractors that rely solely on the PS are just (and possibly quite rightly) what they are targeting.

I can't see how getting new work in the NHS is going to help you in any way. I also don't see how a 2 week break makes any difference either.

As with all of your other posts, you seem to have some passive hate for the public sector. If you have nothing useful to say then say nothing - these threads are about people's livelihoods and often concern vital work for public services. In the case of health, my area, I actually have worked for periods in private healthcare. Compared to the NHS, it is a tiny market - a structural quirk of the UK.

The sole issue I have is with firewalling off my current and previous outside-IR35 assignments from anything I do post-6th April. I am resigned to the loss of income, or even to abandoning the contractor model I've had completely. I just need to know if I should turn down this fixed term PAYE offer from my current outside-IR35 client for the sake of preventing a stressful automatic retro tax investigation.

Grateful to posters' advice

[SueEllen]

Here is an idea, why not go and find work in the PS? Contractors that rely solely on the PS are just (and possibly quite rightly) what they are targeting.

I can't see how getting new work in the NHS is going to help you in any way. I also don't see how a 2 week break makes any difference either.

The NHS is split into lots of different organisations within it so moving to another organisation within the NHS gives you a different client (or if permie an employer).

Though I do agree with you - contractors should move between public and private sectors, and not stick with one.

The only time you may find yourself sticking with one sector is if the technology you are dealing with is obsolete and you are near retirement age.