Results of the public sector consultation is up

[LondonManc]

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.

That requires someone at HMG/HMRC to be prepared to listen and understand that there's a difference between a specialist and a permietractor and to be both able to and prepared to work that difference into legislation. At that point, permietractors could then accept that their easy ride is over and go back perm, FTC or full PAYE via umbrella and proper microconsultancies can continue.

That arguably also relies on us specialists making more of a case that we work more than the hours seen on site/billed for because we have other things to do to maintain ourselves as specialists.

[MoroccanMole]

In the short term (before this is rolled out to the Private Sector) market forces will dictate the next steps.

If a PS Client wants to recruit a body to manage a help desk for 6 months; advertised as inside Ir35 (as these roles always have been).

If PS Client wants to procure some technical or professional services, the market will dictate if the supply chain will accept the increased costs or elsewise they will be forced to review their procurement methods and engage small consultancies the same way they engage the larger ones.

[Lance]

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

Given that there are examples and definitions of how you can be in a PS role and still be outside then perhaps the clients will enforce IR35 as intended. Surely that's not a bad thing?

I agree that they'll not be able to use this method to make private sector put more people inside. There's no reason for them to. And it may actually mean the clients become far more savvy of IR35 as well (no more getting upset when you don't ask permission for a holiday etc.).

You say "that IR35 was supposed to be obeyed by us but we didn't comply" but that assumes that most people ducked IR35 it when they shouldn't have. How true is that now though? Most of the supervised contractors I know are all umbrella.

So I guess the document doesn't answer too much. Is still vague and we still don't know how this will work in practise.

Doom and gloom it isn't though. Unless you're a PS worker who should be inside IR35 anyway.

[Lance]

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.

hear hear

[Lewis]

HMRC have not said you will be an employee. Everybody here is implying this but I've not heard it yet. What they've said is you'll pay tax rather like an employee (although not identically)..

In this example the agency gives Tim a P45 despite the fact Tim is employed by Tim HR Ltd. A P45 is (as it currently stands) "from your employer when you stop working for them."

[MoroccanMole]

hear hear

Better informed clients would be the upside of these recent developments.

Better informed clients, terrified of treating us in a way that could leave them liable for withheld employment rights would be better still.

[northernladuk]

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.

Indeed. I've been saying that for a long time like here..

http://forums.contractoruk.com/futur...ml#post2295462

same as Eek who also mentioned it here

http://forums.contractoruk.com/futur...ml#post2329670

and quite a few other people. Not all would state it on the forum but it's still a widely discussed option.

You get a lot of stick for suggesting it but still think it was something that should be done. Would it have avoided this I don't know but that's no reason not to consider it at some point.

[malvolio]

In this example the agency gives Tim a P45 despite the fact Tim is employed by Tim HR Ltd. A P45 is (as it currently stands) "from your employer when you stop working for them."

Well yeah, but a P45 is a statement of taxes paid, nothing else. Given they are paying taxes on your behalf I'd have thought it a useful backup.

Simply hiding behind semantics isn't going to help anyone. It's also not going to change to any significant degree and it's not going to confer any kind of employment rights and benefits. Finally expenses stop because you can't get expenses if you're IR35 caught (yes, I know, exceptional expenses are still allowable - that doesn't cover going to your normal work). People need to start planning how they are going to deal with it.

[Lance]

In this example the agency gives Tim a P45 despite the fact Tim is employed by Tim HR Ltd. A P45 is (as it currently stands) "from your employer when you stop working for them."

Read the whole document. It's very clear that the worker will not become a employee. How that stacks up legally, after Uber, is another question.

[eek]

The document states that genuine expenses are still tax deductible (presumably at SA time though).

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

Not quite. Only those expenses that you could claim as an employee of the end client are claimable. That means you can claim for that day trip to Blackpool / Sheffield but you can't claim for your weekly commute to Newcastle and accommodation in Newcastle if you are working there 50% of the time.

Note the carefully picked example to reflect a question from someone last week.....