Staying in the same public sector contract after April 2017

[LondonManc]

Oh Yes, scenario 3 if I recall.

This option would not circumvent the rules , but potentially a consultancy could hoover up the contractors , bung them a couple of hundred more and then once they get their own staff prepped, swap then out for permies.

Cost to client : the same (eg 1200 or whatever)
£ to contractor: few hundred more
Advantage to big 4: secure the work and make a few hundred profit on the contractor for 6 months then swap out for permies and make many 00s a day.

Managed service means they now have the business for an eternity

Or simply leave the happy contractors in place with very little management required, while allowing a couple of senior consultants to go in and sell more bums on seats on the back of the seasoned contractors doing a good job.

You've a lot to learn about consulting.

[youngguy]

Or simply leave the happy contractors in place with very little management required, while allowing a couple of senior consultants to go in and sell more bums on seats on the back of the seasoned contractors doing a good job.

Ah yes, good point.

I've steered clear of consulting (purposefully) but am wondering whether that is a viable option in a post April future, hence my Qs.

You've a lot to learn about consulting.

Yes I know....that's why i asked the Q!

[northernladuk]

Yes I know....that's why i asked the Q!

Maybe that's where you are coming over wrong. You made a statement, not asked a question.

[youngguy]

Maybe that's where you are coming over wrong. You made a statement, not asked a question.

Then it is my error if that was the case.

I was thinking aloud. I personally believe that there changes will eventually roll out to all sectors, so have started to explore what that may mean a few yrs down the road. I'm wondering whether working with/via a consultancy is viable in the future.....by which I mean a model similar to what London Manc cited, ie billing an amount which is broadly comparable to pre April rules and being able to work and be left alone rather than a consultancy lapdog.

[neil99]

Indeed but they are a different model to us being engaged via an agent so not really a like for like comparison. Still outrageous though.

Oh the agent takes a cut too and another intermediary. For a hypothetical 500 / day contract it costs the public sector 1500.

In the case here there's BIG CONSULTANCY -> boutique agency -> recruitment agency

[neil99]

Yes to the first part; but I've seen other consultancies try and "compete" for business with local contractors by using bobs.

As for it not being viable, put in a quote to reflect the new tax levels. While they don't care about your tax situation, you do. It's not like it's changed mid-contract and you're about to down tools because they aren't going to reissue a new contract.

Bobs? IS this a reference to a certain episode of Blackadder II ?

[neil99]

Doesn't one example in the consultation document cover the scenario where a consultancy has a number of people in. I'm sure they are still in scope.

You mean (from April 2017) where a BIG CONSULTANCY brings in contractors to work at client site? Surely when HR uses the employment status test tool it will appear inside IR35 and the BIG CONSULTANCY will deduct PAYE/NIC.

At least that's how it will have to work. I suspect they are cooking up other plans to dump contractors on day rates and go for fixed term employment contracts the type of which are found in other public sector bodies.

My enquiry as to why agencies are flogging contracts (via BIG CONSULTANCIES) as outside of IR35 has so far gone unanswered. I will call their helpline. It would look a bit bad if they were hiring contractors to work at HRMC and encouraging them to pay incorrect tax.

[eek]

You mean where an BIG CONSULTANCY brings in contractors to work at client site? That's totally inside IR35 and the BIG CONSULTANCY will deduct PAYE/NIC.

At least that's how it will have to work. I suspect they are cooking up other plans.

My enquiry as to why agencies are flogging contracts (via BIG CONSULTANCIES) as outside of IR35 has so far gone unanswered. I will call their helpline. It would look a bit bad if they were hiring contractors to work at HRMC and encouraging them to pay incorrect tax.

A consultancy bringing a contractor in to work at DWP or HMRC would not necessarily at the moment be caught by IR35...

Come April next year and the new rules that could well change....

[neil99]

A consultancy bringing a contractor in to work at DWP or HMRC would not necessarily at the moment be caught by IR35...

Come April next year and the new rules that could well change....

Sure. I made that statement with April 2017 in mind. BIG CONSULTANCY HR would have to do the IR35 test and presumably this would result in being inside IR35. B C won't want to take any risks on this!

[DaveB]

Bobs? IS this a reference to a certain episode of Blackadder II ?

Derogatory and generic reference to overseas workers shipped in under outsourcing agreements. Much quickness, plenty cheapness.