Results of the public sector consultation is up

[BoredBloke]

Well good luck with getting a rate rise any time soon for the bulk of PS work.

Charging more simply won't work. It will take a long while before the PS realise that paying BigCo to fix their problems results in them paying 200% more for the same contractors. And the contractors will rapidly discover they are still going to be paid net if they are working on a PS contract, no matter how many parties are in the daisy chain.

But the choices are simple:

1. Don't do PS
2. Do PS and accept you will lose 20-25% of your income to tax and no expenses
3. Go umbrella (same problem, less paperwork)
4. Take an FTC (same problem, much less income)
5. Go permie.

Personally I'll stick with #1.

1 is fine until they say it's not fair having contractors in the public sector and private sectors doing essentially the same work but paying different levels of tax and that all contractors should pay broadly the same level of tax. So what will you pick from 2 to 5 then? This is just a blue print for what's up the pipeline for the rest of us. Nice to know that the Tories are the party of small business.

[eek]

1 is fine until they say it's not fair having contractors in the public sector and private sectors doing essentially the same work but paying different levels of tax and that all contractors should pay broadly the same level of tax. So what will you pick from 2 to 5 then? This is just a blue print for what's up the pipeline for the rest of us. Nice to know that the Tories are the party of small business.

I think your jump in logic there is bigger today than it was on Friday. Everything is phrased in ways that work far better in the public sector than would work in the private sector - that's not to say I don't expect this to move to the private sector at some point but I suspect that while they are using argument 1 in my list above they would use argument 3 for the private sector....

[BoredBloke]

I think you have to look at this from the other side.

1) HMG see people abusing limited companies to earn more than they would do if working under PAYE and so that needs to be resolved and this solves that problem.

2)Separately there are a set of people who use limited companies but who actually are freelance (us). They may be impacted by the change and that appears to be acceptable collateral to HMG.

3) There is then a separate 3rd group of people who would like to have a permanent job in that public sector department but for various reasons are required to use a limited company to get work there (a prime example is expanding departments where the council are having major cutbacks elsewhere and politics is proving an issue).

Now the question is how big is that second group. I know it contains me and others on here but I suspect that when HMG states that IR35 isn't being used correctly in 90% of cases we are the 10% and the issue is that HMG only have a sledge hammer and they are going to use it.

I don't agree. I think we were the target here. Look at the examples they quote....a bum on the seat data analyst and a project manager - these are not the driver who was made to go down the limited company route by the end client.

[mudskipper]

I don't agree. I think we were the target here. Look at the examples they quote....a bum on the seat data analyst and a project manager - these are not the driver who was made to go down the limited company route by the end client.

I agree with BB. We're not collateral.

[jamesbrown]

Yep, definitely not collateral, and they've used the classic "no current plans" phrasing to indicate that this is coming to the private sector soon.

[youngguy]

Well good luck with getting a rate rise any time soon for the bulk of PS work.

Charging more simply won't work. It will take a long while before the PS realise that paying BigCo to fix their problems results in them paying 200% more for the same contractors. And the contractors will rapidly discover they are still going to be paid net if they are working on a PS contract, no matter how many parties are in the daisy chain.

But the choices are simple:

1. Don't do PS
2. Do PS and accept you will lose 20-25% of your income to tax and no expenses
3. Go umbrella (same problem, less paperwork)
4. Take an FTC (same problem, much less income)
5. Go permie.

Personally I'll stick with #1.

Nice choices summary.

I do agree that it will take some time for rates to creep up, but I'd hope all ps contractors still have the convo's and try and leave (if they can) or move to private as soon as they can. The quicker everyone does that and ps feels the impact the quicker they will wise up (which will of course still take yrs)

[LondonManc]

I agree with BB. We're not collateral.

Agreed.

What they don't realise is the end result will be the cash that they could have had us returning into the economy being taken into the big four consultancies as they dive in to take the shortfall and even worse being taken out of the country by Indian tech cos and their workers. Yet more British short-termism at its finest. Green-eyed chunts envious of our position without actually understanding our position.

[Lance]

Maybe I'm being a bit thick

I've just read the whole document.

https://www.gov.uk/government/public...technical-note

This thread has lots of doom and gloom about the changes.
But from what I can see the only changes are :
1) If inside IR35 the client pays PAYE/NICs
2) no more 5% 'nominal' expenses

The document states that genuine expenses are still tax deductible (presumably at SA time though).
And the document has examples of both inside and outside IR35 working.
All of which seem to be based on the IR35 tests. Presumably the test cases as they're the only ones that stand up in law. EDIT - the online tool being the blunt instrument to gauge in or out but not based on actual law. /EDIT

The bigger impact of the change would be if the client and/or agency deem you inside when you're actually out, due to being risk averse.

Have I completely missed something or is this just IR35 applied differently?

[MoroccanMole]

The 'uproar' stems from the fact that a lot of Contractors feel their client will wrongly class them as inside IR35. These are probably the same Contractors who have held a BoS role for 36 months and look forward to their 6 monthly appraisals. Some of these guys need to be thrown under the bus as a sacrifice for the genuine contractors and small consultancies to keep trading as Ltd.

[Cirrus]

Have I completely missed something or is this just IR35 applied differently?

It's looks - roughly - that IR35 was supposed to be obeyed by us but we didn't comply. They couldn't find an effective way of getting us to comply so they've told their State Departments to enforce it on us.

How that carries across to private sector clients who are not subject to State pressure, is the interesting question