Staying in the same public sector contract after April 2017

[Andy Hallett]

I did wonder that. Agency arent going to because thats they're margin being eroded of course (or removed completely)

The margins at TFL were low single digit for full service and barely decimal for payrolling at the last tender award.

[LondonManc]

I'd say that if you're cast iron outside of IR35 - both in terms of contract and working practices - then you will still (eventually) see the same money as now. There may be some process whereby you have to claim a rebate from HMRC but at the very least a cast-iron outsider would be a beacon of light for all.

[eek]

Why worry? Nothing has changed in that respect, IR35 still has to be assessed on a contract by contract basis.

Yep its contract by contract basis but if you've been somewhere for a year or so....

Now I will repeat this for the nth time. It's perfectly possible that HMRC won't look at the dataset of contractors inside IR35 on April 30th 2017 and won't decide to look backwards at those contracts that were in place on 31st March 2017 (or before) and investigate some or all of them. However I have serious suspicions (and strong circumstantial evidence to back that up) that the above won't hold true and that HMRC will have to investigate those who continued working into April 2017..

And as I've already stated it used to require a lot of evidence before triggering an IR35 case. That isn't the case with the dataset that exists from April 2017 onwards, the list is easily creatable, readily accessible and everyone in it would probably have an awkward time answering any questions HMRC ask...

And yes I do feel like a broken record, but the fact is that from April HMRC have a dataset they've never actually had before (contractors who their end client have determined (to some extent) to be inside IR35) and its utterly unlikely they are not going to use it - I know if I was Mr Hammond that I would be expecting them to...

[eek]

I'd say that if you're cast iron outside of IR35 - both in terms of contract and working practices - then you will still (eventually) see the same money as now. There may be some process whereby you have to claim a rebate from HMRC but at the very least a cast-iron outsider would be a beacon of light for all.

How and where would you recover NI (especially Employers NI) from? You can't reclaim it from HMRC and the amount paid is probably equal to or greater than the Agency's margin....

[LondonManc]

How and where would you recover NI (especially Employers NI) from? You can't reclaim it from HMRC and the amount paid is probably equal to or greater than the Agency's margin....

The following year perhaps? A court case? Yet another example of HMRC's lack of foresight, whatever the process should be.

[seeourbee]

So are you also suggesting a full refund of PAYE tax ? For the sake of argument say you earn 100k, taxed 40k and have taken the 60k as net cash in the form of a salary. Then you succeed by being outside ir35 and claim a refund of the (what - 40k?). Then what ? You have still had cash come to you as an individual which presumably would normally be part salary part dividend. How to re-write your tax affairs for that year ? Do you do your tax return again ? There are time limits on all of this and I suspect you'd be well outside of them.

[MPwannadecentincome]

I did wonder that. Agency arent going to because thats they're margin being eroded of course (or removed completely)

What is there to wonder? Client is not going to pay more, whoever is running the payroll has to deduct employer's NI out of the money they get from the client. If agency doing the payroll they will take their cut first they ain't gonna forgo that. simples.

Seems like most are unaware of employer's NI...

[Hotsauce56]

Yep its contract by contract basis but if you've been somewhere for a year or so....

Now I will repeat this for the nth time. It's perfectly possible that HMRC won't look at the dataset of contractors inside IR35 on April 30th 2017 and won't decide to look backwards at those contracts that were in place on 31st March 2017 (or before) and invest some or all of them. However I have serious suspicions (and strong circumstantial evidence to back that up) that the above won't hold true and that HMRC will have to investigate those who continued working into April 2017..

And as I've already stated it used to require a lot of evidence before triggering an IR35 case. That isn't the case with the dataset that exists from April 2017 onwards, the list is easily creatable, readily accessible and everyone in it would probably have an awkward time answering any questions HMRC ask...

And yes I do feel like a broken record, but the fact is that from April HMRC have a dataset they've never actually had before (contractors who their end client have determined (to some extent) to be inside IR35) and its utterly unlikely they are not going to use it - I know if I was Mr Hammond that I would be expecting them to...

I'm starting to see this as being more and more likely and I think it is the main driver behind HMRC releasing the tool so late in the day. I.e. leave it so late that a good portion of PS contractors will stay where they are and await clarification until their agent or whoever 'sorts it' or provides them with advice, by which time they are over that April 6th line and firmly in scope for retrospective action backed up by a nicely packaged decision provided by their client which wont be disputed by their agent. I think people who don't necessarily have a move option at this point should consider a month or so on the bench, particularly if they have been in that contract for some time.

[MPwannadecentincome]

So Point 1 clarified - Payments post april 7th will be flagged.

correction any payments after april 5th will be flagged.

[Fred Bloggs]

How and where would you recover NI (especially Employers NI) from? You can't reclaim it from HMRC and the amount paid is probably equal to or greater than the Agency's margin....

You can't. No mechanism that I know of exists to do that. If your employer says you're caught, then how can you argue with that?