Staying in the same public sector contract after April 2017

[jamesbrown]

How so? Surely it's the equivalent of dropping your rates to such an extent that nobody will work for you?

I'm talking about the way it will be argued, not what will actually happen as a consequence of equal treatment, which will involve a range of competing factors (demand for contractors, desire not to creat permie roles, possibility of FTC, exposure to back taxes and penalties etc).

[jamesbrown]

What has been repeated on here many times which you either don't understand or are deliberately ignoring, is that in the private sector jobs are not held on to in the same way as in the civil service.

So while the civil servant who engages contractors fears they will lose their job if they don't hire contractors in a certain way, as the private sector includes SMEs and multi-national who all have different hiring practices trying to enforce the same rules will lead to work arounds.

This is exceptionally optimistic, at best. We've debated this time and again, but most private companies (particularly larger ones that contract many BoS contractors) have risk management practices that will steer them well away from exposure to back taxes and penalties of unknown magnitude when the criteria are as vague as those associated w/ IR35.

[Qdos Contractor]

If they offer an outside IR35 contract that HMRC deems is inside, who pays for what regarding taxes that should have been paid

As things stand it is the 'fee payer' - so normally the agency. It's an interesting one as you would logically assume the party who made the decision would be on the hook for it. In fact, I think a lot of people are assuming that.

The public sector body actually has very little risk, but legislatively incorporating them into the process seems to have put the fear of god into them.

[jamesbrown]

As things stand it is the 'fee payer' - so normally the agency. It's an interesting one as you would logically assume the party who made the decision would be on the hook for it. In fact, I think a lot of people are assuming that.

The public sector body actually has very little risk, but legislatively incorporating them into the process seems to have put the fear of god into them.

The fee payer is simply responsible for implementation, unless the PS client fails to provide a determination within the legislated timeframe. The PS carries substantial risk, both in sourcing skilled contractors and in providing false/incorrect information (for which they will be liable). They will seek to minimise the latter, and suffer w/r to the former, at least until it's introduced in the private sector, when some contractors will reconsider PS contracting (when suitable permie roles don't materealise).

[northernladuk]

As things stand it is the 'fee payer' - so normally the agency. It's an interesting one as you would logically assume the party who made the decision would be on the hook for it. In fact, I think a lot of people are assuming that.

The public sector body actually has very little risk, but legislatively incorporating them into the process seems to have put the fear of god into them.

But if there is a move to the Digital Outcomes and Specialists it would be the Gov Dept that makes the decision so that fear of god is going to affect the status on that work which isn't good?

That said from what I remember of that framework there are pure bum on seat roles in there that can't be anything but inside anyway so maybe a non argument.

[LondonManc]

It could be that the PS does what NLUK advocated a few months ago - that a majority of contractors, i.e. those in bum-on-seat roles, are thrown under the bus by the PS in saying that 60-70% of the roles that they offer are inside IR35.

It wouldn't take much to draft two vastly different contracts with working practices to reflect inside and outside and show that they are different. Agents can then be comfortable in advertising the role with the IR35 flag already set.

[Qdos Contractor]

The fee payer is simply responsible for implementation, unless the PS client fails to provide a determination within the legislated timeframe. The PS carries substantial risk, both in sourcing skilled contractors and in providing false/incorrect information (for which they will be liable). They will seek to minimise the latter, and suffer w/r to the former, at least until it's introduced in the private sector, when some contractors will reconsider PS contracting (when suitable permie roles don't materealise).

The PS body will become the 'employer' if they fail to provide their decision within 31 days, but the fraudulent information clauses are all aimed at the contractor.

The point I was trying to make is that the fee payer isn't responsible for just implementation, but they also carry the liability in the event of an IR35 investigation.

Obviously this all comes with the caveat that the legislation is still in draft.

[jamesbrown]

The PS body will become the 'employer' if they fail to provide their decision within 31 days, but the fraudulent information clauses are all aimed at the contractor.

The point I was trying to make is that the fee payer isn't responsible for just implementation, but they also carry the liability in the event of an IR35 investigation.

Obviously this all comes with the caveat that the legislation is still in draft.

The difficulty is that the PS client is responsible for making a determination in all cases, but when they determine that a contract is outside (unlikely), it's extremely doubtful whether the agency would be willing to take the risk, given the liability imposed upon them as the deemed employer. If that's your point, I agree. However, aside from the explicit transfer of liability provision to the PS client for non-resident workers, it seems likely that the PS client would also be exposed to legal action for resident workers in the event that they (the PS client) provided incorrect information (and the deemed employer acts on that, after requesting clarification on how they made their determination).

[fannyadams]

Can't agree with the first line. They did consult. They consulted widely and everybody told them it was unworkable and a bad idea. The point is the consultation was a sham. They decided to ignore the results of the consultation and implement what they wanted. The consultation was just a tick in the box to cover themselves when all of the sh1t hits the fan.

Not sure about that. As the responses to MP's letters have shown, there is wide buy in from the government to this, probably including the various ministers responsible for the PS departments. If you look at the list of respondents, there's plenty there that would have supported the initiative to crack down on tax dodging contractors.

[malvolio]

Not sure about that. As the responses to MP's letters have shown, there is wide buy in from the government to this, probably including the various ministers responsible for the PS departments. If you look at the list of respondents, there's plenty there that would have supported the initiative to crack down on tax dodging contractors.

Quite right too. Thing is, there are very few of them...