IR35 PS - So anyone had the discussion yet?

[northernladuk]

Yes and from what I see a lot of contractors are going to fall for it. Seems to be, at this client anyway, I am the ONLY ONE whos kicked off about this. Its amazing.

But yes, at this point, agent does not know/does not care - just wants to get extension in the bag.

Like I said, many contractors already in contracts that overrun. I can see an almighty tulip storm come April when all parties (inc agency, PS body, consultancy) start to realise that maybe someone has got to pay the employer NI.

The changes to T&S for brollies went the same way from what I remember lots of misinformation, apathy and attempted circumvention resulting in tons of people still trying to claim expenses past April and the Govt having to release and amendment to clarify... Much the same but not quite on a scale like this.

[MrMarkyMark]

You couldnt make this up. I've been hassling agency for weeks now to get an answer, to push it up to consultancy client and them to push it up to PS.

Got an email today - "All sorted. You're outside scope of new PS IR35 regulations because you're contracted to a private company (i.e. the consultancy) and not a PS client".

Yes OK I'll take you're word for it! :-(

You couldn't make it up, classic

[bobspud]

I wonder what happens if nobody realises - i.e if the client/consultancy/agent all don't realise they're supposed to be assessing the consultancy contractors.

The answer in most cases will be they dont control the associate so there is nothing to assess.

[jamesbrown]

Yes and from what I see a lot of contractors are going to fall for it. Seems to be, at this client anyway, I am the ONLY ONE whos kicked off about this. Its amazing.

But yes, at this point, agent does not know/does not care - just wants to get extension in the bag.

Like I said, many contractors already in contracts that overrun. I can see an almighty tulip storm come April when all parties (inc agency, PS body, consultancy) start to realise that maybe someone has got to pay the employer NI.

I never thought I'd say this, PC, but you're ahead of the game.

[teapot418]

I never thought I'd say this, PC, but you're ahead of the game.

He is - but he needs to stop faffing and vote with his feet. If he can persuade his colleagues to do the same, all the better.

[Unseen]

What about companies with more than one contractor, working for different businesses? Is it still PCS?

My husband is working for University so falling into this mess. I went through online ESI tool and results are:
"This outcome is based on the following grounds:
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· There is a low indication of substitution.
· There is a medium indication of control over the worker.
· There is a medium indication of financial risk."

He's failing on substitution because according to the online tool only option is to pay person who's substituting you. It does not take into account the fact, that company can have more than one employee - contractor so there's no need to pay someone, because agency/client will pay the money to the company, regardless of who does the work.

Can't remember what was in the risk however I chose true answer and according to it, it's a wrong one.

Regarding control, how can you do any work for customer without their comments, directions, etc? After all you need their feedback during project work. When consultancy coming to do the work, they still need feedback from customer.

University is still thinking what to do about it, agency sent email saying that they are responsible for establishing IR35 status and trying to put everyone through umbrella. I guess it's similar case to TfL mentioned in other subject, when it's easier for company to just force people to go under umbrella rather than review contracts and see who could qualify to be outside of IR35.

[Andy Hallett]

As the weeks have gone by I am becoming a bit more bullish. Some sample reviews and sympathetic conversations with directors of some pretty hefty programmes this week have left me feeling a bit more optimistic.

Those who can genuinely show they are independent contractors should and will get a fair chance to demonstrate this in the majority of cases, and if they don't we'll push the issue.

Add in an exciting new partnership and a genius idea I am talking to a contractor about, I'll enjoy my 2003 Cape Red tonight whilst penning my thoughts on a LinkedIn article having had an encouraging week.

[Andy Hallett]

I wonder what happens if nobody realises - i.e if the client/consultancy/agent all don't realise they're supposed to be assessing the consultancy contractors.

The 'payer', in this example the agency, takes the hit for PAYE and the NICs.

I was discussing this today, agents need to understand who they are supplying and asking the question otherwise they are in the tulip when the music stops.

[difficulttimes]

So I saw this..on Linkedin

IR35 - tool unlikely to be available until end March at the earliest

HMRC have released a test site to a small group which requires feedback by beginning of March and will then go into an update phase. This therefore looks like the 6/4 will hit prior to the tool being ready!!

There goes the 20th Feb launch.. There will have to be some sort of give for this whole 6th April deadline then.

[djf]

They'll find out soon enough in their bank accounts in May, and then brown letter envelopes thereafter

I'm not in the PS myself but I am paying close attention because I guess its likely to transfer to the private sector shortly.

Anyway I was reading HMRC Guidance "Off-payroll working in the public sector: reform of the intermediaries legislation - technical note" published on 5th December and there is an example for "Rebecca IT Ltd" which has the following sections:-

Responsibility for secondary NICs
The Ministry will pay secondary NICs related to the engagement, as it does for directly employed people.

Payments and deductions made by the Ministry (all figures are illustrative)
Each month, Rebecca IT Ltd invoices the Ministry £7200 which includes £1200 VAT.

The Ministry treats £6000 as Rebecca’s earnings and deducts £1400 tax and £400 employee NICs which it pays to HMRC via RTI with £700 employer NICs.

Each month, the Ministry pays Rebecca IT Ltd a total of £5400, which is £4200 for the services provided plus £1200 VAT.

Now as I read it (and the calculations seem to support it) the tax and employee NICs are taken from your contract rate and the government department is going to pay the employers NIC (secondary NICs) which is an additional payment that the PS client is going to make over and above your contracted rate.

£6000 contract income + 20%VAT = £7200
They take off £1400 tax and the £400 employee NICs and pay your company £5400 .... and then in addition the government dept pays £700 employers NIC.

I originally thought that the tax, employee NICs and employers NICs would be taken from your rate but the above suggest you are only going to lose the tax and the employee NICs ... effectively you are having a rate increase because they are now paying the employers NIC.

Have I missed something?

The article in question is at the following link:-

https://www.gov.uk/government/public...g-tax-and-nics

https : // www . gov . uk / government / publications / off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation-technical-note / off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation-technical-note#deducting-tax-and-nics