Staying in the same public sector contract after April 2017

[londonlad]

Just to get clarity and add some context to the scenario..

Lets suppose contractor gets paid weekly. Suppose contractor last working day is 24th March 2017 and payment is expected and cleared by 31st March 2017.

The PS make payment to Agency on monthly basis, so agency receives the payment after 6th April for the work done for w.e 24th March 2017.

What's going to happen in this scenario?

1. Contractor is safe and no deduction can be claimed by Agency?

2. PS make the payment deducting Tax and NI, hence agency make a loss as contractor already got paid on 31st March 2017?

3. Any other scenario?

[jamesbrown]

Just to get clarity and add some context to the scenario..

Lets suppose contractor gets paid weekly. Suppose contractor last working day is 24th March 2017 and payment is expected and cleared by 31st March 2017.

The PS make payment to Agency on monthly basis, so agency receives the payment after 6th April for the work done for w.e 24th March 2017.

What's going to happen in this scenario?

1. Contractor is safe and no deduction can be claimed by Agency?

2. PS make the payment deducting Tax and NI, hence agency make a loss as contractor already got paid on 31st March 2017?

3. Any other scenario?

It comes down to which of the payments is the withholdable one. I agree with Andy H. that the guidance seems to indicate that it's the payment from the fee payer, which is logical, but logic isn't something to which HMRC is particularly accustomed. Bottom line, if it's the fee payer, then providing the payment to the contractor is made before 6 April, it's fine, i.e. the contractor is safe in the above scenario and the agency wouldn't be demanding anything, retrospectively. Anyway, it definitely isn't scenario 2 unless the PS client is the fee payer (i.e. direct contract or defaulted to fee payer, having failed to respond within 31 days about status). Only the fee payer can apply the payroll calculations.

[Andy Hallett]

Just to get clarity and add some context to the scenario..

Lets suppose contractor gets paid weekly. Suppose contractor last working day is 24th March 2017 and payment is expected and cleared by 31st March 2017.

The PS make payment to Agency on monthly basis, so agency receives the payment after 6th April for the work done for w.e 24th March 2017.

What's going to happen in this scenario?

1. Contractor is safe and no deduction can be claimed by Agency?

2. PS make the payment deducting Tax and NI, hence agency make a loss as contractor already got paid on 31st March 2017?

3. Any other scenario?

#1

[cojak]

Hi All

Are people planning to leave their current contracts by April 2017 ?

What's the chances of being billed for PAYE from the date they started.

I'm assuming the revenue will investigate anyone who goes from outside to inside IR35 working on the same contract or similar ?

Going back to the very first post I think that we should tip our hats to Neil99 for his very perceptive point on the retrospective question.

[difficulttimes]

Online tool...

Possible scenario..

So I heard today that to actually complete the tool the 'contractor' will need to be in position physically. So does that mean that a contract could be advertised and the end client appoint a contractor but the end client is still not sure if it will be inside or outside IR35 - this would be done when they arrive. On their first week the contractor with the end client goes through the tool and it says that he/she is inside IR35. The contractor then walks out the door and says I'm not interested. The poor end client now needs to go through the rigmarole of putting it out to recruit.
But how does that work in terms of their contract? I'm assuming they can't start work without one.

If a contract is inside IR35, could I not ask for the tool to be completed to prove this when I arrive? If the tool can only be used once I'm there on what grounds has the end client made that call - could I force them to?

Sorry, maybe these are daft questions and HMRC have this covered but I doubt it..

Am I missing something?

[LondonManc]

Possible scenario..

So I heard today that to actually complete the tool the 'contractor' will need to be in position physically. So does that mean that a contract could be advertised and the end client appoint a contractor but the end client is still not sure if it will be inside or outside IR35 - this would be done when they arrive. On their first week the contractor with the end client goes through the tool and it says that he/she is inside IR35. The contractor then walks out the door and says I'm not interested. The poor end client now needs to go through the rigmarole of putting it out to recruit.
But how does that work in terms of their contract? I'm assuming they can't start work without one.

If a contract is inside IR35, could I not ask for the tool to be completed to prove this when I arrive? If the tool can only be used once I'm there on what grounds has the end client made that call - could I force them to?

Sorry, maybe these are daft questions and HMRC have this covered but I doubt it..

Am I missing something?

If what you're saying is true about the test only happening once you're on site, then it's going to be a complete tulipfest. Walkouts will be standard, potential breaches of contract, delays getting people on site and so on. Either that or thePS departments will figure out the correct answers to get someone outside and get it sorted quickly but I very much doubt that. I have a bad feeling about this.

[jamesbrown]

Possible scenario..

So I heard today that to actually complete the tool the 'contractor' will need to be in position physically. So does that mean that a contract could be advertised and the end client appoint a contractor but the end client is still not sure if it will be inside or outside IR35 - this would be done when they arrive. On their first week the contractor with the end client goes through the tool and it says that he/she is inside IR35. The contractor then walks out the door and says I'm not interested. The poor end client now needs to go through the rigmarole of putting it out to recruit.
But how does that work in terms of their contract? I'm assuming they can't start work without one.

Not a daft question, but gawd knows. Heard from whom, incidentally? One potential source of confusion is the difference between the initial assessment of the (contracted) working practices and a repeated assessment of the actual working practices, which may be necessary if they change or an inconsistency arises. However, unless they can advertise, upfront, whether the contractual working practices are intended to be outside, I guess they'll struggle to recruit even for those (small number of) contracts that are outside. It's a mess, obviously. Perhaps they are designing the tool so that, to get a "guarantee" or receipt from the tool, it needs some specific information about the contractor but, in that case, you'd expect that a PS client could make a pre-determination with the known working practices and then rubber stamp it when the contractor arrives. I had assumed it would work like the ESI tool, which is anonymous, and gives a reference number for proof. Who knows. I guess Andy H. knows, as he's seen an early version.

[Andy Hallett]

There are two things that determine whether an 'assignment' is outside (or indeed inside) scope of IR35. Please don't pick me up on details below, think themes.

Firstly the 'role'. What is the nature, working practices, risk. SDC etc.

Secondly the 'service provider', are they taking risk, have substitutes, take risk, have own equipment etc.

For the engagement to be outside both those parts need to be satisfied. As such, there are two assessments. One to determine the role prior to start and a second, longer assessment with the selected contractor details plugged in.

In reality the vast majority of roles will be deemed inside from the off, and will likely be advertised accordingly, doesn't matter how the worker operates after that.

Also worth noting that the ESS can be completed by the hirer, worker or agent - in each case they have enough detail of both parties to complete it correctly.

[Andy Hallett]

Not a daft question, but gawd knows. Heard from whom, incidentally? One potential source of confusion is the difference between the initial assessment of the (contracted) working practices and a repeated assessment of the actual working practices, which may be necessary if they change or an inconsistency arises. However, unless they can advertise, upfront, whether the contractual working practices are intended to be outside, I guess they'll struggle to recruit even for those (small number of) contracts that are outside. It's a mess, obviously. Perhaps they are designing the tool so that, to get a "guarantee" or receipt from the tool, it needs some specific information about the contractor but, in that case, you'd expect that a PS client could make a pre-determination with the known working practices and then rubber stamp it when the contractor arrives. I had assumed it would work like the ESI tool, which is anonymous, and gives a reference number for proof. Who knows. I guess Andy H. knows, as he's seen an early version.

The tool gives you a decision, reference number and a copy of the questions answered in a handy PDF.

[difficulttimes]

interesting..

Thanks for that..
Couple of further points..

A ) if I was placed in an inside IR35 deemed contract then I would ask for a copy of the assessment because I reckon the end clients will be thinking that to make life easier let's make them inside IR35 but we will continue to treat contractors the same. ie. I may want regular supervision now or you are supposed to be providing this so called direction you have said. Where is that? You need to take more control over this project as well. The lists go on and on... the end client can't have the cake and eat it too. Then after I get all that, I will take you to the tribunal as I want the same rights as the permie sitting next to me

B) I still think like the working practices questionnaire that was bouncing around central government departments over the last few years. People will quickly work out how to answer it so it sits outside IR35 - there must be a way of answering it so it comes out with that otherwise it's a bit like a North Korean election.