Staying in the same public sector contract after April 2017

[coolhandluke]

I've informed my client today that I won't be available from the 24th Feb. They seemed ok about it and understood the reasons.

Their HR department have also today sent a request to all project leaders asking for details on the current contractors and their roles. There is no chance they will make a decision regarding the off payroll status before April.

I'm the only contractor leaving. Everyone else doesn't care.

[cojak]

I've informed my client today that I won't be available from the 24th Feb. They seemed ok about it and understood the reasons.

Their HR department have also today sent a request to all project leaders asking for details on the current contractors and their roles. There is no chance they will make a decision regarding the off payroll status before April.

I'm the only contractor leaving. Everyone else doesn't care.

Do they not care about the drop in income*? Do they know that they'll only get 65% as of 6th April? (From the howls of pain by the unsuspecting in the Umbrella sub-forum, you'd think that they'd been robbed by a masked bandit.)

Very strange...

*And that's before the likely retropective investigations...

[northernladuk]

Do they not care about the drop in income*? Do they know that they'll only get 65% as of 6th April? (From the howls of pain by the unsuspecting in the Umbrella sub-forum, you'd think that they'd been robbed by a masked bandit.)

Very strange...

*And that's before the likely retropective investigations...

Even though we predicted it yonks ago I find it hard to believe anyone is sitting there either not knowing or caring about the situation at this late stage. You can't help thinking if they are then HMRC called it right and would also be right to fire off retrospective action. Where I wouldn't wish it on anyone it would be difficult to show too much sympathy.

[Fred Bloggs]

Do they not care about the drop in income*? Do they know that they'll only get 65% as of 6th April? (From the howls of pain by the unsuspecting in the Umbrella sub-forum, you'd think that they'd been robbed by a masked bandit.)

Very strange...

*And that's before the likely retropective investigations...

Hey Cojak! Please keep up. The new mantra is "it's a lifestyle choice, it isn't about taxation". And there was me, all this time, thinking it was all about selling my skills for the maximum amount of income and hanging on to as much of it as I could within the law. Silly me, eh?

[Andy Hallett]

Nope go and look at my first example. Then remember that most public sector departments will pay VAT out and reclaim it at the end of the month / quarter directly from HMRC... VAT unless you are selling from a shop to the general public is a zero sum game...

Not all Public Sector departments can recover VAT on services they procure.

[eek]

Not all Public Sector departments can recover VAT on services they procure.

Yep - but to claim that HMRC makes a profit from you working there (as people here are saying and IPSE have posted in arguments for years) is at best a gross over simplification and at worst plain wrong... I will admit there are exceptions but they aren't that relevant to the overall VAT is a tax I earn and pay argument.

[eek]

Do they not care about the drop in income*? Do they know that they'll only get 65% as of 6th April? (From the howls of pain by the unsuspecting in the Umbrella sub-forum, you'd think that they'd been robbed by a masked bandit.)

Very strange...

*And that's before the likely retropective investigations...

Not at all strange as I suspect most people won't know until new contracts appear (or based on contract wording we know is already in some contracts) their pay packet is a lot smaller than previous ones.

we are well ahead of the game here. The next group of people are then those working in HMRC or other departments where communications have gone out. Next you probably IPSE members who read the emails sent to them. And all that group put together is probably only 10%-20% of the entire public sector off payroll workforce.

Heck talking elsewhere regarding something else we suspect a lot of landlords will only notice S24 when their tax credit form arrives (yep tax credits are paid on wages, only rental profit was included) or when their tax returns are filled in. I actually suspect most won't understand what has happened until March 2019 when HMRC tell them their 2017/18 self assessment hasn't been filled in...

[vlc]

This isn't a clarification of existing legislation, it's new legislation, so there is literally no prospect of retrospective taxation. Indeed, for those desiring to remain in contract beyond April 2017, it will require a change in contract, because the terms will have changed to deemed employment. However, I agree with the underlying premise that it would be better to move sooner, simply for the practical reason that the private sector will be receiving a lot of latecomers from the PS once these contractors realise what has happened. Also, there may be some risk of additional scrutiny on older contracts (under existing IR35 rules), but that is speculation.

Retrospective action has happened before..... going back five years.

[seeourbee]

This may have been answered before but under the new rules, will they deduct 40% tax from day 1? Or will they ask for your tax code ? Some contractors will barely reach the 40% tax band and it seems unimaginable that they would have to wait until the end of that tax year (and the self return filing dates) before they see any refund .

[b r]

You'd expect them to ask for your tax code (or at least have the gumption to give it), otherwise you'll be on Month 1.

Just thought of another surprise, everyone paid direct by the PS will now be monthly even if they were invoicing weekly - the agencies shouldn't have a problem though.