Staying in the same public sector contract after April 2017

[SueEllen]

It's education for the PSB - they have no idea what IR35 is - they don't even know what taxes contractors pay. For them all they care about is not crippling important projects by losing good people through something perceived as an external change. They will need to know what they would have to do to make a role outside-IR35 and so get or keep the people they want. Substitution and the rest will be news to them.

I'm now thinking if they run the tool, print the answers and sign it - and sign a written statement of compliant working practices- and it all shows me outside IR35 then I will stay as sounds like the retro risk is greatly reduced, which is my only concern.

You know IR35 is looking at working practices as well.

So you can get any random bit of paper signed to say you are outside but if you don't work like that you are inside.

[puzzler]

another scenerio...

what happens...

1- if PS end client says everyone inside ir35 (blanket decision no ifs/buts) ...
2- PS contractor agency ABC says to contractor, leave or inside/PAYE/umbrella options etc....
3- Another agency XYZ says, come with us, we will get private assessment (where lets work out so u r deemed outside), we then declare you outside, and liability is ours if found inside, you dont have to worry, we have army of lawyers bla bla....
4- Contractor leaves the agency ABC and joins the agency XYZ, and continue working for PS client, but now as outside ir35 and agency XYX carries all the liability.

Many contractors now jumping to Agency XYZ ....

Now my question/concern is, where does this all lead to ... ?
Or is it really a genuine solution/workaround discovered ??

[jamesbrown]

Or is it really a genuine solution/workaround discovered ??

Nah, there are transfer of debt provisions, so the directors of that agency are going to be in trouble, and HMRC would be on top of them very quickly anyway, because the PSB has made an inside determination and the agency has ignored it. There won't be much discovery involved there.

[RonBW]

You are assuming the carefully revised Ts&Cs actually are fully aligned to the reality of the role. Personally, I wouldn't bet the mortgage on that being a viable or defensible approach.

If the client is asserting that they have assessed the role and it is outside, then the liability now sits with the client to defend that judgement. If their assessment is wrong, then the liability to pay the taxes sits with the payer - either the PSB or the agency if there is one.

[northernladuk]

I am happy to work inside or outside IR35 - still better than perm as above. I already had my plan to leave and find a gig somewhere else - it's just the client who is trying not to see a £6m programme crash for a few months as they try and replace me.

Working practices would need to be real anyway - I've already told them they need to make my role much looser and not just as a sham on paper.

You constantly go on about what paperwork you've got and what you want to be safe but a common theme throughout is the lack of WP evidence. Every other post there is a new post which indicate you are in a very precarious position. You start of saying you manufacturing something to look outside, then you say client knows nothing about IR35 and just wants staff to work on projects na now you are having to tell them to make the role loser to not make it a sham. Where in any of that is the evidence to us that your previous role was nothing but part and parcel and inside?

I know you feel you've got something from QDOS (which I am pretty disappointed about if you do) but I can't help you can't see the wood for the trees here. I just can't see how you can be at higher risk unless you just ignore an inside determination and carrying on outside TBH.

[SueEllen]

what happens...

1- if PS end client says everyone inside ir35 (blanket decision no ifs/buts) ...
2- PS contractor agency ABC says to contractor, leave or inside/PAYE/umbrella options etc....
3- Another agency XYZ says, come with us, we will get private assessment (where lets work out so u r deemed outside), we then declare you outside, and liability is ours if found inside, you dont have to worry, we have army of lawyers bla bla....
4- Contractor leaves the agency ABC and joins the agency XYZ, and continue working for PS client, but now as outside ir35 and agency XYX carries all the liability.

Many contractors now jumping to Agency XYZ ....

Now my question/concern is, where does this all lead to ... ?
Or is it really a genuine solution/workaround discovered ??

Is there any reason you have to use text speak when writing on this forum?

Even if you are writing on your phone there is no excuse.

And working practices are looked at not just the contract.

[RonBW]

Nah, there are transfer of debt provisions, so the directors of that agency are going to be in trouble, and HMRC would be on top of them very quickly anyway, because the PSB has made an inside determination and the agency has ignored it. There won't be much discovery involved there.

I'd want XYZ to have a fair few million in the bank and a reduced chance of phoenixing to consider it

[northernladuk]

If the client is asserting that they have assessed the role and it is outside, then the liability now sits with the client to defend that judgement. If their assessment is wrong, then the liability to pay the taxes sits with the payer - either the PSB or the agency if there is one.

Indeed but the OP's situation raises an additional question. If the client's assessment is wrong but they point out being fed the information by a contractor to make that assessment would it be possible the contractor gets in to trouble? There is no chance at all that the client get's shafted but takes the contractor down with him for being complicit or because they directed the situation?

Kind of same question if anyone in the chain misinforms clients really. Agents, contractors, other bodies etc?

Is this too hypothetical to even consider for the moment?

[seeourbee]

This is hilarious to watch. It's like watching a bunch of Civil Servants have a meeting ...

[RonBW]

Indeed but the OP's situation raises an additional question. If the client's assessment is wrong but they point out being fed the information by a contractor to make that assessment would it be possible the contractor gets in to trouble? There is no chance at all that the client get's shafted but takes the contractor down with him for being complicit or because they directed the situation?

I would suspect that there isn't. In the same way that if you sign a contract without understanding what you are signing you can't rely on the "I didn't know it meant that" line as a defence, the client has the opportunity to understand exactly what they are committing to paper / ether and so has to be bound by the answers that they give. There may be a contractual obligation where the contractor asserts that they have been honest in any assessment that they have given / helped with, and therefore if the client has to pay up for your dishonesty then you have to pay them though. Or even at the worst case a criminal investigation for fraud based on giving answers that you know to be false that results in you paying a lower taxation rate (assuming the Serious Farce Office can get that right).

There are two big unknowns at the moment for me. Firstly, what is the appeals process? HMRC have mentioned it before, but there are no details. So who can file the appeal, who hears it, what are the timescales, what happens to the taxes in the meantime, can PAYE and NI be essentially held in escrow pending a judgement etc.

Secondly, what is the situation where the client reassesses the contract and the determination moves from outside to inside? Clearly this can happen in practice (see JLJ), but there is a difference between a year / two years / six months / at contract renewal the client reassessing the role and finding it inside (whether because the tool has changed or the circumstances or both) and the client suddenly reading up on IR35 / understanding the questions more / being cautious and deciding to reassess and finding the role is now inside IR35 mid contract.

At the moment, the only "clarity" is that the liability lies with the assessor if they get it wrong. Without final legislation and guidance from Cabinet Office (and the courts as necessary) then there are still too many unknowns for my liking.