Staying in the same public sector contract after April 2017

[LondonManc]

My understanding is that the PSO has a 'duty of care' under the final legislation to prevent this. Should they play fast and lose with the determinations the transfer of debt would logically go to them, also the agency would pass the liability on in the form of a negligence claim.

In my experience, a few PSEC managers bend the rules, none like to break the rules.

Andy, a couple of questions from this if you could please?

Is there a suggestion that they may be forced to put a contract outside IR35 if, say, they're in the middle of nowhere so inside IR35 makes expenses a killer?

Also, has there been any discussion on clients paying expenses now to counteract the determination of inside IR35? A double whammy of Inside IR35 taxation *and* no Inside IR35 lack of expenses makes PS work at any significant distance completely off-putting.

[maxm]

New contract, same client after April 5th

I have spoken with my client, and they are happy to terminate current contract end of March and write a new contract. I am in two minds about staying and the risk of retro investigation.

The recommendation here is to find another gig. This is possibly the safest option, but is anyone working with their client to workout a new contract.

[cojak]

I have spoken with my client, and they are happy to terminate current contract end of March and write a new contract. I am in two minds about staying and the risk of retro investigation.

The recommendation here is to find another gig. This is possibly the safest option, but is anyone working with their client to workout a new contract.

The new contract isn't really the problem maxm.

The problem is that HMRC will see you sitting in the same seat, doing the same things and ask "if he's inside now, why wasn't he inside then?"

That's why moving to a new PS client is safer - it is a different client, with a different contract and different working practices.

Different working practices is the important bit.

[eek]

I have spoken with my client, and they are happy to terminate current contract end of March and write a new contract. I am in two minds about staying and the risk of retro investigation.

The recommendation here is to find another gig. This is possibly the safest option, but is anyone working with their client to workout a new contract.

The risk with continuing is retrospective investigation.

And the first question to then ask is how would HMRC decide how to identify where to begin investigating? And chances are that would be using Agency Reporting regulation reports that contain agency details, your NI number and the company the money went to.

Keeping the same contract with the same agency means you end up appearing on the same list after April 5th. And if you are deemed inside and your pay changes or you are deemed inside and the company name changes to an umbrella there is a chance you will appear on the "possibly worth investigating" list.

Hence the advice to find a different contract with a different agency.

[maxm]

OK, fair point. That makes a lot of sense, regarding working practices. I guess I will have to leave, and look for something else. We have other contractors and they are not too bothered about the whole thing. Given the number of unknowns surrounding the new legislation, I guess it is better to safe. No one can give 100% guarantees on any contract at this stage.

[LondonManc]

OK, fair point. That makes a lot of sense, regarding working practices. I guess I will have to leave, and look for something else. We have other contractors and they are not too bothered about the whole thing. Given the number of unknowns surrounding the new legislation, I guess it is better to safe. No one can give 100% guarantees on any contract at this stage.

What unknowns? The closest you've got to guarantees are the HMRC are 90% likely to do a retrospective tax grab.

[RonBW]

I have spoken with my client, and they are happy to terminate current contract end of March and write a new contract.

If they are willing to give you a new contract which reflects the working practices, is that going to be something that is outside IR35 or inside IR35?

If they are making a determination that you are outside, then I don't see there being any problem - you were outside before and are outside now, so any investigation is always going to look at the same things.

If they are making a determination that you are inside, then if you haven't been treated as inside before you might have a problem. There is an argument that says that if you are doing the same work in the same way and you are now inside IR35 then you probably were all along and HMRC might come looking for that earlier contract as well. Bear in mind that the rules around IR35 itself have not changed - if you were confident of your status before April then you shouldn't be worried about it afterwards (apart from the stress that a long-running investigation might cause before you are cleared).

[northernladuk]

I'd be putting my money on the agent doesn't actually understand what is going on and thinks this will keep the contractors happy. Blind leading the blind and all that.

[RonBW]

I'd be putting my money on the agent doesn't actually understand what is going on and thinks this will keep the contractors happy. Blind leading the blind and all that.

If you're referring to maxm then as the post says, (s)he is discussing with the client not the agent.

And if you have the chance to engage and educate the client then you'd be stupid not to take that chance.

[NHS1979]

I'd be putting my money on the agent doesn't actually understand what is going on and thinks this will keep the contractors happy. Blind leading the blind and all that.

The strangest discussions I'm having now are between me and my baffled end client, who has been sent this email by my agency asking him to 'make an IR35 determination' on my role despite my leaving at end of March. He is saying 'I don't have a tool, but even if I did what happens if it says inside IR35?' My agency said to me that any determination made would be a moot point as I will be leaving and so there will be no inside IR35 contract with my name on it - and that HMRC will not be informed.