Staying in the same public sector contract after April 2017

[teapot418]

I understand that, but Andy was saying that S3 were picking up a number of contractors who had been direct and I am trying to understand what benefit that is to the contractor.

I suppose the benefit is that the client is more likely to make an outside determination if they don't bear the risk.

[Andy Hallett]

Thanks for replying. So, why do you think contractors are coming to you, rather than stay direct?

Clients are pushing them our way.

[Andy Hallett]

Do you believe this will change in the final legislation?

No. Everything we have heard to date indicates liability stays with us.

[malvolio]

No. Everything we have heard to date indicates liability stays with us.

Until HMG realise this and change the rules again. The idea originally is as much about ensuring Civil Servants are properly employed as much as it's about gaining NICs income: they will not be all that tolerant of obvious workarounds.

Equally the status determination stays with the end client, so I still fail to see the benefit, other than a fairly minor one of moving some minor financial risk back to the agency in the unlikely case that the taxes are not paid at source. I somehow doubt the agencies are doing this altruistically the additional cost will come from somewhere, most likely out of the contracts cut of the agency contract.

All told, it's still a damn poor reason to hold on to a PS contract if you have another place to go.

[Andy Hallett]

Until HMG realise this and change the rules again. The idea originally is as much about ensuring Civil Servants are properly employed as much as it's about gaining NICs income: they will not be all that tolerant of obvious workarounds.

Equally the status determination stays with the end client, so I still fail to see the benefit, other than a fairly minor one of moving some minor financial risk back to the agency in the unlikely case that the taxes are not paid at source. I somehow doubt the agencies are doing this altruistically the additional cost will come from somewhere, most likely out of the contracts cut of the agency contract.

All told, it's still a damn poor reason to hold on to a PS contract if you have another place to go.

They are very aware of it, this is deliberate, not an accident.

[teapot418]

No. Everything we have heard to date indicates liability stays with us.

The rumour from two weeks' ago was unfounded?

I guess as an agency if you are reasonably confident in an "outside" status, and can convince the client that it is in everybody's interest to make that call, you're in a great position to win the business, as long as you are 'happy' to take the risk.

[eek]

Until HMG realise this and change the rules again. The idea originally is as much about ensuring Civil Servants are properly employed as much as it's about gaining NICs income: they will not be all that tolerant of obvious workarounds.

Equally the status determination stays with the end client, so I still fail to see the benefit, other than a fairly minor one of moving some minor financial risk back to the agency in the unlikely case that the taxes are not paid at source. I somehow doubt the agencies are doing this altruistically the additional cost will come from somewhere, most likely out of the contracts cut of the agency contract.

All told, it's still a damn poor reason to hold on to a PS contract if you have another place to go.

I believe there are reasons why its felt that (some) agencies may be better at judging whether a contract is inside or outside than say a contractor (who obviously believes they are outside) and the client who given a risk to budget will just say inside come what may...

[malvolio]

I believe there are reasons why its felt that (some) agencies may be better at judging whether a contract is inside or outside than say a contractor (who obviously believes they are outside) and the client who given a risk to budget will just say inside come what may...

Some agencies perhaps: i.e. damned few IME, most don't even know what it is and only use IR35 friendly contracts as a hook for the unwary.

Perhaps we need to think less about gaming this stupid system and more about how we get away from this pseudo-employee nonsense altogether. The easiest "workaround" is to have a pure B2B contract between corporates. Agencies can provide those just as easily as then can what we have now, if they can change their overall business model and start selling services rather than people. Which is something of a problem of course...

[eek]

Some agencies perhaps: i.e. damned few IME, most don't even know what it is and only use IR35 friendly contracts as a hook for the unwary.

Perhaps we need to think less about gaming this stupid system and more about how we get away from this pseudo-employee nonsense altogether. The easiest "workaround" is to have a pure B2B contract between corporates. Agencies can provide those just as easily as then can what we have now, if they can change their overall business model and start selling services rather than people. Which is something of a problem of course...

And what exactly is the purpose of this IR35 change but to ensure that the Public Sector actually determines what they are asking to be done and that the appropriate methods are used to ensure the people performing said tasks are then employed by an appropriate means.

The difference here is that IPSE seems to believe that its perfectly acceptable to have people everything from first line support upwards working via a limited company alongside others in the payroll of that department and both HMG and HMRC have decided that the abuse has grown so rampant that it needs to be killed off.

[teapot418]

And what exactly is the purpose of this IR35 change but to ensure that the Public Sector actually determines what they are asking to be done and that the appropriate methods are used to ensure the people performing said tasks are then employed by an appropriate means.

The difference here is that IPSE seems to believe that its perfectly acceptable to have people everything from first line support upwards working via a limited company alongside others in the payroll of that department and both HMG and HMRC have decided that the abuse has grown so rampant that it needs to be killed off.

I fear you've fallen for HMRC's rhetoric.

If this abuse is so rampant, why did the a review find that there was 90% compliance in public sector departments?

Why aren't HMRC winning IR35 cases left, right and centre?