Staying in the same public sector contract after April 2017

[SueEllen]

Erm, anyone with a hole in their arse could have guessed this was going to happen surely?

The government forgets it is competing with the private sector for up to date skills.

[jamesbrown]

The government forgets it is competing with the private sector for up to date skills.

It's preparing to un-forget that

[LondonManc]

It's preparing to un-forget that

GCSE Etch-a-Sketch to be the in-demand qualification for 2017 PS work?

[DotasScandal]

When this kicked off in November IPSE thought the odds of it were zilch, I suspect they might do it but wasn't that sure say a 60% chance, based on what I heard last week I'm now 95% sure there will be a retrospective tax grab....

The question everyone should have asked themselves is rather "what could make HMRC resist the temptation of attempting a retrospective tax grab"? The answer is "nothing", since earlier, incremental, retrospective stunts (S.58, APNs, "2019 charge"...) were met with so little resistance.
IPSE are so hopelessly blind and/or naive that they're not worth a commentary.
But one could have hoped that contractors would have started noticing the trend already.

[LondonManc]

The question everyone should have asked themselves is rather "what could make HMRC resist the temptation of attempting a retrospective tax grab"? The answer is "nothing", since earlier, incremental, retrospective stunts (S.58, APNs, "2019 charge"...) were met with so little resistance.

Correct. All the little nibbles, no real resistance, simply providing a bit of case law in their favour. What a cunning stunt.

[b r]

Ok for talking about possible risk, but no one have thoughts on:

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?

[eek]

Ok for talking about possible risk, but no one have thoughts on:

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?

We don't know the details of how your company handles the money it receives (supposedly the company should pay it to your automatically) but the amount it receives will be after Employer's NI is deducted from that £2500 and paid by the agency to HMRC and the employees NI and income tax will be withheld by the agency (and sent to HMRC on your behalf) from the amount paid to your company.

[b r]

We don't know the details of how your company handles the money it receives (supposedly the company should pay it to your automatically) but the amount it receives will be after Employer's NI is deducted from that £2500 and paid by the agency to HMRC and the employees NI and income tax will be withheld by the agency (and sent to HMRC on your behalf) from the amount paid to your company.

Sorry, it's my company.

My question was firstly how much would the agency/PS actually hand over and then secondly when I pay us (although use our Accountants to handle the RTI notifications) how is our tax/NI treated, ie do we need to wait for the Govt to someone give it back, and if it's 'attached' to my OH's NI Number how does this work when we've 2 contractors working in both the Private and Public sectors but share income/costs etc like you would in any business when treating 'overheads'.

[eek]

We don't know the details of how your company handles the money it receives (supposedly the company should pay it to your automatically) but the amount it receives will be after Employer's NI is deducted from that £2500 and paid by the agency to HMRC and the employees NI and income tax will be withheld by the agency (and sent to HMRC on your behalf) from the amount paid to your company.

Sorry, it's my company.

My question was firstly how much would the agency/PS actually hand over and then secondly when I pay us (although use our Accountants to handle the RTI notifications) how is our tax/NI treated, ie do we need to wait for the Govt to someone give it back, and if it's 'attached' to my OH's NI Number how does this work when we've 2 contractors working in both the Private and Public sectors but share income/costs etc like you would in any business when treating 'overheads'.

We don't know. The best I can say is that the money is withheld by the agency and they will pay it to HMRC. How you get it over payments back from HMRC no one knows yet...

[cojak]

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.

Oh Dear...