Staying in the same public sector contract after April 2017

[pictavia]

One of the worst parts of all of this is the lack of clarity. Simply through not granting an amnesty on ir35 status pre-6th April they have caused chaos. Faced with the fear of retrospective investigation people are streaming away from the public sector in droves. Even those who plan to continue working with the public sector are exiting out of current critical programmes and pieces of work so they can move to another organisation and 'firewall' off their pre-April 6th contracts and status.

Yes, I think the next four months or so will be difficult for many of us. I also work with an NHS client and there has been a recruitment drive for new employees in a number of areas partly driven by the caps on agency rates. I suspect funding will be withdrawn from a number of projects if the required sills are not available at the capped rates inside IR35.

[puzzler]

safest options ?

I wonder whats the safest option or possibilities for the not-so-brilliant-and-brightest contractors, who do want to keep working for same PS contracts after April 2017 changes.

I believe the options with associated risks are:

OPTION # 1
Permanent/Fixed Term -worst in terms of taxes/take home but safest as no possibility of retro investigation

OPTION # 2
Umbrella inside ir35 (risky retro investigation possibility but better take-home than permanent)

OPTION # 3
Ltd outside ir35 in PS (best case if client/agency agrees but still risky as HMRC may challenge status)

OPTION # 4
Move to Private sector (best of bests for the bests, for others risky - as u may not get next contract easily and may incur significant time on bench)

[teapot418]

I wonder whats the safest option or possibilities for the not-so-brilliant-and-brightest contractors, who do want to keep working for same PS contracts after April 2017 changes.

I believe the options with associated risks are:

OPTION # 1
Permanent/Fixed Term -worst in terms of taxes/take home but safest as no possibility of retro investigation

OPTION # 2
Umbrella inside ir35 (risky retro investigation possibility but better take-home than permanent)

OPTION # 3
Ltd outside ir35 in PS (best case if client/agency agrees but still risky as HMRC may challenge status)

OPTION # 4
Move to Private sector (best of bests for the bests, for others risky - as u may not get next contract easily and may incur significant time on bench)

Why do you think there's no risk of retro investigation with option 1? That's exactly what happened at the BBC - the freelance staff went permanent, and all are undergoing investigations. Option 3 is the only good option if staying in the current role.

[northernladuk]

Option 1 and 2 as you would be exactly what this was designed to address.

Or go permanent and attempt to become the brightest and best so you can be a proper contractor.

[DaveB]

The only way to guarantee that you wont have issues down the line or end up on full PAYE etc. is to get out of the Public Sector completely, wait until things have settled down and the situation is clearer, and then make a decision about moving back.

[puzzler]

Why do you think there's no risk of retro investigation with option 1? That's exactly what happened at the BBC - the freelance staff went permanent, and all are undergoing investigations. Option 3 is the only good option if staying in the current role.

How will HMRC identify such cases in the first place for retro investigation ?

What exactly happened at BBC ?

Permanent/fixed term employment completely detaches you from the LTD company structure, and in absense of LTD company there should be no scope of ir35 to apply i guess... Do you think HMRC will request lists of such converted employees from PS who started into permanent/fixed term employment after April 2017 changes ?

[MrMarkyMark]

How will HMRC identify such cases in the first place for retro investigation ?

What exactly happened at BBC ?

Permanent/fixed term employment completely detaches you from the LTD company structure, and in absense of LTD company there should be no scope of ir35 to apply i guess... Do you think HMRC will request lists of such converted employees from PS who started into permanent/fixed term employment after April 2017 changes ?

Not true, even if you close your Co they can still investigate you.

[northernladuk]

As with all of your other posts, you seem to have some passive hate for the public sector. If you have nothing useful to say then say nothing - these threads are about people's livelihoods and often concern vital work for public services. In the case of health, my area, I actually have worked for periods in private healthcare. Compared to the NHS, it is a tiny market - a structural quirk of the UK.

No passive hate for the PS. I've just left after 2 years myself. My irk is with the contractors that see themselves as nice and safe in PS gigs and quite happy to live their lives out as pseudo employees in it. All of a sudden some legislation comes along and it all changes. Decent contractors leave and carry on delivering services to clients as contractors do. Those PS lifers thrash around like stranded fish trying to do everything the possibly can to stay in the PS. You've had the gumption to get involved and understand which puts you above many many others but there are options outside the PS and these just doesn't seem to be an option for many coming on here recently. I know how I sound but I'm quite happy to keep banging the drum. I'm not the only one. See the post a few above this. Eek has been saying the same for many many months now. Someone, somewhere may listen, leave look back, and realize we were right.

[puzzler]

Case Study

Case Study:
A PS contractor who has 5 years in same PS contract want to continue in same PS contract after Apr 17 changes. He wants to avoid or atleast minimize retro investigation possibility but at the same time cannot afford losing job just right now. He is not the best brains who can go and get the next contract easily. He can though afford extra taxes and reduced income for some time to atleast keep afloat and plan for the next move ideally by leaving comfort zone upskilling and adjusting to competitive contractor market.

whats the best option with least possibility of retro inspection ?

[DaveB]

Case Study:
A PS contractor who has 5 years in same PS contract want to continue in same PS contract after Apr 17 changes. He wants to avoid or atleast minimize retro investigation possibility but at the same time cannot afford losing job just right now. He is not the best brains who can go and get the next contract easily. He can though afford extra taxes and reduced income for some time to atleast keep afloat and plan for the next move ideally by leaving comfort zone upskilling and adjusting to competitive contractor market.

whats the best option with least possibility of retro inspection ?

There is no best option if you stay in the same public sector contract. Your best option is to get out into the Private Sector.

Work out what your day rate would be after tax if you were IR35 caught in the PS and start looking for Private sector gigs at around that rate.

You'll be no worse off in cash terms since you say you could afford the loss of income due to extra tax, and you wont be at risk of retrospection.