Staying in the same public sector contract after April 2017

[teapot418]

For what it's worth, contractor doctor very kindly wrote my a lengthy reply about my concerns:

Public Sector: IR35 Concerns - Contractor Weekly

"Answering ‘yes’ to both questions places the contract firmly inside IR35."

No, it doesn't.

It means that HMRC deem you to be a disguised employee, but that does not reflect IR35 case law. FCSA and IPSE both made this point strongly in their responses. If/when this comes in, I would expect that an organisation such as IPSE would cherry pick a couple of good cases and take them all the way - of course this would require the contractor being prepared for a long and stressful fight.

[eek]

"Answering ‘yes’ to both questions places the contract firmly inside IR35."

No, it doesn't.

It means that HMRC deem you to be a disguised employee, but that does not reflect IR35 case law. FCSA and IPSE both made this point strongly in their responses. If/when this comes in, I would expect that an organisation such as IPSE would cherry pick a couple of good cases and take them all the way - of course this would require the contractor being prepared for a long and stressful fight.

I think that misses the entire point of HMRC's plan which is that PAYE and NI will be deducted well before the contractor receives his money.

Hence its a moot point taking a case to a tribunal as there is no money to fight over.... Granted I can imagine IPSE and co may be able to cherry pick and find a case to fight - I'm just not sure who they would be fighting against...

[eek]

Just sent a second email rejecting a project out of hand due to the ir35 changes.

Let's see what the response is

[LondonManc]

Just sent a second email rejecting a project out of hand due to the ir35 changes.

Let's see what the response is

Say you're on a £500 dayrate at the moment. Expenses aside (let's assume it's a basic commute and the fiver a day isn't worth the hassle collecting receipts for), what would the mark-up need to be to get the same "take home"? Are you looking at, say, £700?

[DaveB]

Say you're on a £500 dayrate at the moment. Expenses aside (let's assume it's a basic commute and the fiver a day isn't worth the hassle collecting receipts for), what would the mark-up need to be to get the same "take home"? Are you looking at, say, £700?

That's in the right ball park for a bog standard one man band contractor who takes 100% of available divi's.

[eek]

That's in the right ball park for a bog standard one man band contractor who takes 100% of available divi's.

You also have the joy of travel expenses which I would no longer be able to take from untaxed income. That's probably £30 extra if commutable, £100 if not and £200 for London - the train fare is £300 a week now

[DaveB]

You also have the joy of travel expenses which I would no longer be able to take from untaxed income. That's probably £30 extra if commutable, £100 if not and £200 for London - the train fare is £300 a week now

He did say expenses aside, but yes, that's another cost to add to the rate.

And then there are those that are income splitting, have a spouse or another employee on the payroll, aren't taking 100% divis, are making large pension contributions etc etc etc...

[eek]

He did say expenses aside, but yes, that's another cost to add to the rate.

And then there are those that are income splitting, have a spouse or another employee on the payroll, aren't taking 100% divis, are making large pension contributions etc etc etc...

I know they are an aside but its worth mentioning them - as it shows the long term planning that has been implemented in this scheme.

Either way onwards and upwards towards a proper consultancy....

[jamesbrown]

Add all that in, and you'll still be 50% cheaper than the big 4

[LondonManc]

Add all that in, and you'll still be 50% cheaper than the big 4

Twice as good for half the price. Fancy that.