Staying in the same public sector contract after April 2017

[youngguy]

Thank you for a great response - this has answered my question.

My consultancy see me as outside of IR35 but it makes you wonder if when the financial risk is then with them, how they may start to alter their stance...

Yes I think that will be the case.

If you go by the consultation doc the new rules would put almost everyone currently outside IR35 inside...or as you say the end engage carries the risk so may out you inside to cover themselves.

Hopefully we will get a watered down solution as to what the doc implies

[boxingbantz]

It is not about having a contract with the PS, it is about providing services to the PS.

Nothing is certain yet.....BUT if you read the doc and assume they enforce as is then it quite clearly says a PSC (ltd) working with a consultancy that delivers it's services to the PS is caught. I get that you don't like that (I don't either ) but read example 3:-

"A consultancy PLC contracts to provide onsite services to the public sector...The consultancy would need to use the online tool and consider the new rules. They need to operate tax and NI on the payments to the PSC...."

Are you ltd?
Do you provide services to the PS via a consultancy ?
If yes to both of those, the consultancy will collect tax and NI from you (I know the online tool plays a part here but by the questions in the doc it looks like very few would not be caught ).

If you feel it doesn't apply to you then fine, argue the toss with the consultancy you are subbed to!

Thanks - I hadn't read the document before so appreciate you highlighting it to me.

Yes I'm limited. Yes the PS is the end client essentially.

My working practices are outside of IR35 as are my working practices, which they have confirmed, so if they went against that and said 'no, actually you could well be in', I'd be on my bike like many on here.

Thanks again.

[youngguy]

Thanks - I hadn't read the document before so appreciate you highlighting it to me.

Yes I'm limited. Yes the PS is the end client essentially.

My working practices are outside of IR35 as are my working practices, which they have confirmed, so if they went against that and said 'no, actually you could well be in', I'd be on my bike like many on here.

Thanks again.

I didn't renew my last PS and although I haven't ruled out working in the sector I want to see what happens first.

My advice would be to not sign any new contracts until we know more (hopefully Nov). You may also want to ensure the client and consultancy are aware of this. I've heard some depts plan to issue new contracts , which contractors can take or leave but what is just hearsay.

My take is, I may work for the PS post April but I can't set my rate until I know more. My rate would undoubtedly be much higher. If you don't wanna pay then I will stay in the private sector.

[jamesbrown]

It is not about having a contract with the PS, it is about providing services to the PS.

Sort of. The consultation explicitly considered whether the rules might be extended from intermediaries to private sector engagements for public sector clients, such as subcontractors to private sector contractors that are engaged in delivering a public function. However, it's quite clear that consultancies are within scope, along with agencies (p.13):

The government understands most public sector off-payroll engagements of PSCs are
made through third parties, including employment agencies, outsourcing companies
and consultancy firms. Third parties in this position will be required to take responsibility
for determining if an engagement is in scope of the rules and paying the associated tax.
The new legislation will apply not only to employment agencies and employment
businesses but also other types of business that supply workers to a public sector client,
such as a consultancy or outsourcing specialist. The government thinks that if this
broader definition were not applied, it would be relatively simple to avoid the effect of
this change by restructuring contracts to be about service provision rather than a supply
of a worker.

So, I think this is uncertain only insofar as everything in the consultation is uncertain until it's reflected in legislation. However, I think the intention is clear. Working for a consultancy will be within the scope of the rules, in the same way that working for an agency is within scope. Working as a subcontractor to a private sector client that performs a function within the public sector is another matter, but I don't think that's what you're debating here.

[youngguy]

Sort of. The consultation explicitly considered whether the rules might be extended from intermediaries to private sector engagements for public sector clients, such as subcontractors to private sector contractors that are engaged in delivering a public function. However, it's quite clear that consultancies are within scope, along with agencies (p.13):



So, I think this is uncertain only insofar as everything in the consultation is uncertain until it's reflected in legislation. However, I think the intention is clear. Working for a consultancy will be within the scope of the rules, in the same way that working for an agency is within scope. Working as a subcontractor to a private sector client that performs a function within the public sector is another matter, but I don't think that's what you're debating here.

Far more eloquently put than me. Nice one

[boxingbantz]

Sort of. The consultation explicitly considered whether the rules might be extended from intermediaries to private sector engagements for public sector clients, such as subcontractors to private sector contractors that are engaged in delivering a public function. However, it's quite clear that consultancies are within scope, along with agencies (p.13):



So, I think this is uncertain only insofar as everything in the consultation is uncertain until it's reflected in legislation. However, I think the intention is clear. Working for a consultancy will be within the scope of the rules, in the same way that working for an agency is within scope. Working as a subcontractor to a private sector client that performs a function within the public sector is another matter, but I don't think that's what you're debating here.

This is exactly my position and what I am trying to understand.

[jamesbrown]

This is exactly my position and what I am trying to understand.

I thought you were consulting within the PS? The consultation document is very clear about this; a consultancy won't be treated any differently than an agency when the relationship is analogous, as it's just supplying a human resource to the PS. OTOH, if you're subcontracted to deliver something for a private sector client that is resold to the PS (i.e. you're not directly providing consultancy for a PS client), you may be OK. I appreciate that there's a fuzzy boundary between the two but, in practice, I can't really envisage many situations where consultancy would be out of scope, because it's providing a human resource to a PS client.

[nucastle]

I left my public sector contract on Friday just gone.

SO - just got off the phone with someone from DWP 'compliance' who started asking me a bunch of things like:

1. who was my line manager
2. who signed my time-sheets
3. were they related day to day with signing my time-sheets on completion of the work set out to me

I suddenly felt very suspicious and stopped him in his tracks to say that I was NOT under direct supervision or control, and my time-sheets were not signed off by a project lead, but by a non-project person, and that I had to be very clear that the words of my contract and working practices did not reflect at all what he was suggesting. I also told him I no longer worked at DWP as of friday just passed.

I asked what the meaning of the call was, and he was saying it was to find out how DWP were engaging with contractors using the CL1 framework.

The conversation ended with me giving him the name of the delivery manager on the project i was assigned to, and the name of who signed my timesheets and him wishing me well on my next endeavour. I couldn't help but feel rather creeped out by the conversation, almost like I was either being scoped out to be drawn into an IR35 investigation, or some other nefarious plot.

[SueEllen]

I left my public sector contract on Friday just gone.

SO - just got off the phone with someone from DWP 'compliance' who started asking me a bunch of things like:

1. who was my line manager
2. who signed my time-sheets
3. were they related day to day with signing my time-sheets on completion of the work set out to me

I suddenly felt very suspicious and stopped him in his tracks to say that I was NOT under direct supervision or control, and my time-sheets were not signed off by a project lead, but by a non-project person, and that I had to be very clear that the words of my contract and working practices did not reflect at all what he was suggesting. I also told him I no longer worked at DWP as of friday just passed.

I asked what the meaning of the call was, and he was saying it was to find out how DWP were engaging with contractors using the CL1 framework.

The conversation ended with me giving him the name of the delivery manager on the project i was assigned to, and the name of who signed my timesheets and him wishing me well on my next endeavour. I couldn't help but feel rather creeped out by the conversation, almost like I was either being scoped out to be drawn into an IR35 investigation, or some other nefarious plot.

Hope you have some form of tax insurance. If you do I suggest you contact the provider to warn them of what DWP has done and is doing.

[nucastle]

Considering they are about to change the rules to make it the intermediary that decides IR35 status, I'd be surprised if they are now switching back to going after individuals when the legislation in that respect has been an utter failure so far.

I feel more sorry for my other contacts there who are NOT leaving.