Staying in the same public sector contract after April 2017

[eek]

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?

That's the entire point of this change in payment methodology as I highlighted last April.

Once found inside ir35 there is no means of recovering a fair whack of the prepaid tax.

[LondonManc]

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?

Now, this is good and the sort of thing that we need to demonstrate. If the contract and working practices demonstrate that you're outside, but the engager says that you're inside, some questions spring up:

What's the use of IR35 insurance if such arbitrary decisions can render a contract and wp review null and void?
Why can someone go against current legislation and simply determine your status, who may be nowhere near your working practices and may not even have seen your contract?
If they're subsequently proved wrong, how should compensation/recompense be effected?

There are no doubt other questions that will arise but those were the first three that I thought of.

[Fred Bloggs]

That's the entire point of this change in payment methodology as I highlighted last April.

Once found inside ir35 there is no means of recovering a fair whack of the prepaid tax.

Well, what posted isn't actually 100% true in all cases. Once (long story) I happened to pay 13 months EeNIC in a 12 month period. I wrote to the revenue with the payslips etc... and pointed it out. They sent me the one months over payment back. Whether you can do it in a inside v outside IR35 case might be different. I suspect it is, or soon will be.

[LondonManc]

Well, what posted isn't actually 100% true in all cases. Once (long story) I happened to pay 13 months EeNIC in a 12 month period. I wrote to the revenue with the payslips etc... and pointed it out. They sent me the one months over payment back. Whether you can do it in a inside v outside IR35 case might be different. I suspect it is, or soon will be.

I don't see that they'll have any option other than to allow it. Either that or it's going to look very dodgy for them that they consider that everyone in PS is inside and there's no alternative to it; at the very least, there would/should be serious questions asked of the money wasted on the determination tool and process if everyone is inside.

[seeourbee]

I feel sorry for the contractors out there who have no idea this is coming in April. They are going to get one very very nasty shock.

[northernladuk]

I feel sorry for the contractors out there who have no idea this is coming in April. They are going to get one very very nasty shock.

I've revised my thinking before. I don't think there will be many that don't know. Communication for agents is starting and the gossip in the office was rife. Word was getting round quickly at my last place and that was before Xmas so I'd be very surprised if lots of people will miss this.

My thoughts now is not people learning of it last minute but more about are they going to bother understanding it and taking action.

[LondonManc]

I've revised my thinking before. I don't think there will be many that don't know. Communication for agents is starting and the gossip in the office was rife. Word was getting round quickly at my last place and that was before Xmas so I'd be very surprised if lots of people will miss this.

My thoughts now is not people learning of it last minute but more about are they going to bother understanding it and taking action.

I'd still imagine that there are a lot of heads in the sand, with the "I'll be okay" irrational optimism approach. Or those that don't realise how hard the hammer will strike until they see their first money arrive in May which is significantly lower than previously expected.

[b r]

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.

Ok, I know there are a load of folk who've a far better idea of how this will/may work than me, so:

If you take a PS contract (lets say it was £500pd plus VAT), equates to £2500+£500 vat per week.

Do we assume that the agency/PS will then pay £2500 - income tax (40%), employees NI (12%) and employers NI (13.8%). Working on week/month 1 as they'll have no knowledge of the tax position of the individual and/or whether other roles/income (divi's etc) they've had? So about £855 plus £500 vat.

And then presumably you pay yourself from your PSC, how do you square up the deductions with the ones that your PSC will have to make to HMRC?

Or have I totally misunderstood?

[Semtex]

I'd still imagine that there are a lot of heads in the sand, with the "I'll be okay" irrational optimism approach. Or those that don't realise how hard the hammer will strike until they see their first money arrive in May which is significantly lower than previously expected.

I think the loss of earnings is a big pill to swallow, most would rather accept than be on the bench, the biggest issue is the RED flag to HMRC re: retrospective ir35 review.

So I think their are 3 options on the table for PS Contractors

1, Leave before April (ensuring your last invoice clears before 5th April 2017) - On bench, New PS Gig or Private sector gig
2, Stay on but protect yourself somehow from the retrospective element (Switching to a new contract, Brolly? or new agency not sure if this will work)
3, Stay on and hope for the best :-(

its trying to establish best processes/steps for 1 & 2 which minimise the risks.

[runandbecome]

I'd still imagine that there are a lot of heads in the sand, with the "I'll be okay" irrational optimism approach. Or those that don't realise how hard the hammer will strike until they see their first money arrive in May which is significantly lower than previously expected.

There are a ton of people with heads in sand at the public sector company I'm currently contracting at, I'm literally the only one out of 30 -40 people I have spoken to who knows anything about this.
This includes people in accounts dept and HR plus long term contractors.

I'm a bit confused how it's going to be implemented by April, nobody here knows about it including the accounts dept who pay us.

I then spoke to my accountant who deals 95% with contract work they knew little to nothing just saying "yeah so ir35 is when you are deemed the same as an employee" yeah well done I know that part.
I also have spoken to a friend who works at a goverment dept as a contractor, her accounts dept know nothing about this her agency know nothing about it and her accountant know nothing about it.