Results of the public sector consultation is up

[jamesbrown]

I remember that but I'm assuming the technical notes override the consultation response...

Personally, I wouldn't assume anything. There are lots of minor mistakes throughout, including in the technical notes.

[jamesbrown]

it seems if you work with staff on a daily basis, sit in their office or use their hardware you are screwed.

I think you're screwed under all circumstances as far as the determination is concerned. The actual position is a completely different matter, and their opinions on case law are worth no more (generally less) than others, but that was never the point...

[jamesbrown]

I think the draft legislation is saying "it's the client". (IANAL)


61M Engagements to which Chapter applies
(1) Sections 61N to 61R apply where—
(a) an individual (“the worker”) personally performs, or is under
an obligation personally to perform, services for another
person (“the client”),
(b) the client is a public authority,
(c) the services are provided not under a contract directly
between the client and the worker but under arrangements
involving a third party (“the intermediary”), and
(d) the circumstances are such that—
(i) if the services were provided under a contract directly
between the client and the worker, the worker would
be regarded for income tax purposes as an employee
of the client or the holder of an office under the client,
or
(ii) the worker is an office-holder who holds that office
under the client and the services relate to the office.


61S Information to be provided by clients and consequences of failure
(1) If the conditions in section 61M(1)(a) to (c) are met in any case, and a
person as part of the arrangements mentioned in section 61M(1)(c)
enters into a contract with the client, the client must inform that
person (in the contract or otherwise) of which one of the following is
applicable—
(a) the client has concluded that the condition in section
61M(1)(d) is met in the case;
(b) the client has concluded that the condition in section
61M(1)(d) is not met in the case.
-------------------

(61M(1)(d) - see above is the 'you're IR35 caught' bit)

That's what we're looking for. The client is defined as the public authority, and they must make the IR35 decision, not just provide the information necessary to make that decision. So eek was correct on this.

It makes sense insofar as the agent was never in a position to make a (proper) determination.

[seeourbee]

Why are the agencies seeing reduced margins - surely it will still be 20% on the daily rate ? No change there ?

[youngguy]

Whats going to happen to a lot of the contractor accountants I wonder, if I was caught and in the PS come next year I would (IF I wanted to continue in the PS) bin the Ltd and go Brolly as, the resident ones that usually post on here have been very quiet of late

Big knock on effect for agencies (especially smaller ones) and accountants (more work, less people as many will go brolly) etx. So less small businesses all round and more capita's and big 4.

It does seem like there is little point in having the hassle of a ltd if you are purely engaged in the ps- it more or less becomes an agency worker model

[eek]

That's what we're looking for. The client is defined as the public authority, and they must make the IR35 decision, not just provide the information necessary to make that decision. So eek was correct on this.

It makes sense insofar as the agent was never in a position to make a (proper) determination.

It also shuts down a lot of the schemes that otherwise would have been created and makes shifting it to the private sector slightly harder. A public sector manager wants to keep his job and final salary pension, your typical private company director wants to minimise costs...

[northernladuk]

Big knock on effect for agencies (especially smaller ones) and accountants (more work, less people as many will go brolly) etx. So less small businesses all round and more capita's and big 4.

It does seem like there is little point in having the hassle of a ltd if you are purely engaged in the ps- it more or less becomes an agency worker model

You and many others are making out that people get a gig in the PS and are stuck with it for life. Don't want to burst your bubble but we work in the private sector as well. You might get the odd PS gig if you can take the hit and go back to private so little change to the accountants.

You are second guessing how accountants will be affected on a flawed assumption.

[jamesbrown]

It also shuts down a lot of the schemes that otherwise would have been created and makes shifting it to the private sector slightly harder. A public sector manager wants to keep his job and final salary pension, your typical private company director wants to minimise costs...

True, but I'd still bet on a high degree of risk aversion (read: false employment). I have no doubt that, for the most clearcut cases, where the client agrees, there will be a way to obtain an outside determination, certainly in the private sector and possibly for some in the public sector, but the wider implications for the contracting community are pretty clear; there's going to be a lot of false employment and many accountants and other professional service providers in the IR35 industry will not survive (even if they try to serve engagers).

[eek]

True, but I'd still bet on a high degree of risk aversion (read: false employment). I have no doubt that, for the most clearcut cases, where the client agrees, there will be a way to obtain an outside determination, certainly in the private sector and possibly for some in the public sector, but the wider implications for the contracting community are pretty clear; there's going to be a lot of false employment and many accountants and other professional service providers in the IR35 industry will not survive (even if they try to serve engagers).

To be honest I'm not at all concerned about false employment, I'm not rushing to be employed by anyone.

All I want is a world where as a specialist consultant competing directly against consultancies I can be treated as a self employed specialist rather than having the substitution hops to jump through. And I feel we are a step closer to that today.

[jamesbrown]

To be honest I'm not at all concerned about false employment, I'm not rushing to be employed by anyone.

All I want is a world where as a specialist consultant competing directly against consultancies I can be treated as a self employed specialist rather than having the substitution hops to jump through. And I feel we are a step closer to that today.

Likewise, I'm not personally concerned about any of this (or, rather, not very concerned, except by the underlying tone from Hammond that small service providers are invariably trying to game the system). Almost all of my clients are overseas, and I can easily move overseas if required. My contracts are about as far outside IR35 as they could be. I'm not interested in setting up a larger consultancy, as I do highly specialised work, and I can't be bothered with the hassle of it (easier to sub than employ, if needed). Ultimately, I'm not that fussed about tax either, providing it's fair (i.e. not have/eat cake). However, I don't think this bodes well for contracting more generally, and we should all be concerned about that at some level (even for the selfish reason that we'll be impacted, indirectly, by the availability of accountants and other service providers, although that is not what I'm talking about).