Staying in the same public sector contract after April 2017

[jamesbrown]

I was waiting for others to put 2 and 2 together. It's why I think the talk over at IPSE regarding fighting and judicial reviews is relatively pointless - previous evidence shows that this approach is legal.

Personally, although I see some similarities, I don't think the parallels are overly strong. The CIS is a withholding tax, and that's about the only similarity. It's an upfront payment towards tax/NI. If you prefer, you can register for "gross payment status" fairly easily (mainly a turnover requirement), and then resolve tax at year end. These IR35 changes are quite different insofar as they're attempting to maximize the actual tax burden (as opposed to simply applying withholding) without conferring employment rights. So, although I agree with you to a point, I do believe there's scope for legal challenge(s) with the IR35 admin. changes.

[malvolio]

Just to be picky, the JR talk in IPSE world is not about the change in taxation but about the legality of imposing the change in the face of universal opposition to the consultation. Or, alternatively, that the consultation was either a sham or a waste of money and resources that exceeded the criteria for holding a consultation, since clearly HMG (or at least, HMRC) had already decided to go ahead. Neither should go unchallenged.

I seriously doubt we can do anything about the new rules, but we can all make a major fuss about it to show up HMRC for the duplicitous unaccountable organisation it has been allowed to become.

[eek]

Just to be picky, the JR talk in IPSE world is not about the change in taxation but about the legality of imposing the change in the face of universal opposition to the consultation. Or, alternatively, that the consultation was either a sham or a waste of money and resources that exceeded the criteria for holding a consultation, since clearly HMG (or at least, HMRC) had already decided to go ahead. Neither should go unchallenged.

I seriously doubt we can do anything about the new rules, but we can all make a major fuss about it to show up HMRC for the duplicitous unaccountable organisation it has been allowed to become.

I think a lot of this is the devil is in the detail and we don't know the detail until Monday. The comment from orangegenie yesterday is however very revealing on his thoughts.

In other news another building block for my escape plan looks to be in place.

[magicbuttons]

Myself and another person who I work with in my current (soon to end) PS role have the same agency. We have separately emailed them to ask their position on the changes, SCD get outs, will they stay in the PS, will they deem everybody in IR35, and they have not replied to either of us. Yes, I know (now) that they cant say what they dont know (until the 5th).. but they didnt even bother with a holding pattern email.

Funnily enough, I'm in exactly the same position... hi JB

On the question of how much the rate would need to be marked up to get the same take-home inside v outside, I've done some rough sums based on a £400p/d rate, and it seems to vary between 15% (contract within short commute/WFH) and 45% (long/expensive commute, half-decent hotel/B&B, subsistence). Emphasis on the word "rough" without knowing the ins and outs yet, and of course percentages would vary with the rate.

Anyone think perhaps we might see an increase in the number of WFH contracts available, as clients won't care about bums on seats so much if it's costing them another 30% on day rate?

[northernladuk]

Funnily enough, I'm in exactly the same position... hi JB

On the question of how much the rate would need to be marked up to get the same take-home inside v outside, I've done some rough sums based on a £400p/d rate, and it seems to vary between 15% (contract within short commute/WFH) and 45% (long/expensive commute, half-decent hotel/B&B, subsistence). Emphasis on the word "rough" without knowing the ins and outs yet, and of course percentages would vary with the rate.

That's nice. Chances of them paying that from the outset are slim to nil though.

Anyone think perhaps we might see an increase in the number of WFH contracts available, as clients won't care about bums on seats so much if it's costing them another 30% on day rate?

Even if it did it wouldn't put you out of scope of the regulation. You are still a bum on seat, it doesn't have to theirs for you to be caught by the legislation. And as I said before, good luck getting them to pay 30% more on the rate card because of this.

They may, and that's a very big may, start putting up the rates if there are no other options available and the whole thing starts crashing but I think they are more likely to dump the whole thing before they start offering 30% across the board. You are assuming rate rises are a valid option and will happen. IMO it's not and it won't.

[Gaz_M]

Funnily enough, I'm in exactly the same position... hi JB

On the question of how much the rate would need to be marked up to get the same take-home inside v outside, I've done some rough sums based on a £400p/d rate, and it seems to vary between 15% (contract within short commute/WFH) and 45% (long/expensive commute, half-decent hotel/B&B, subsistence). Emphasis on the word "rough" without knowing the ins and outs yet, and of course percentages would vary with the rate.

Anyone think perhaps we might see an increase in the number of WFH contracts available, as clients won't care about bums on seats so much if it's costing them another 30% on day rate?

We were just talking about the same thing. WFH has to be one of the main strategies possible in both public & private come April next year.

Where I currently am I would need over 40% increase to cover tax/NI and expenses but only 16-17% increase if I could WFH.

[SussexSeagull]

I have never worked in the public sector but from my experience of civil servants I really can't see them doing much to sugar the pill for contractors.

As has been suggested elsewhere, the best bet is to create a downside to putting everyone into IR35 by pushing for employee benefits such as paid holiday.

[Gaz_M]

I have never worked in the public sector but from my experience of civil servants I really can't see them doing much to sugar the pill for contractors.

As has been suggested elsewhere, the best bet is to create a downside to putting everyone into IR35 by pushing for employee benefits such as paid holiday.

They may have no choice. There are 7 of us in current gig & everybody is saying they will leave next March if caught inside IR35. There is no way on this planet that the project can afford to lose that many so what do they do?

[SussexSeagull]

They may have no choice. There are 7 of us in current gig & everybody is saying they will leave next March if caught inside IR35. There is no way on this planet that the project can afford to lose that many so what do they do?

I suspect the success or failure of a project will be fairly low down the list of priorities.

Hope I am wrong as legions of public service contractors trying to get private sector contracts will flood the contract market even more than it is now.

[northernladuk]

They may have no choice. There are 7 of us in current gig & everybody is saying they will leave next March if caught inside IR35. There is no way on this planet that the project can afford to lose that many so what do they do?

You do see what your biggest problem is going to be don't you?