Blanket decisions of inside IR35

[hollyblue]

How can this be permissible? I have had my working arrangements agreed in a separate document prior to my start date of 13.3.17. Practices are outside of scope.

PSB has informed agency that they are going to deem all contractors inside as they don't want to take the risk. PSB has said to agency they agree I'm outside but they're not going to declare me outside due to risk of penalty and other contractors are inside and they don't want mutiny in the camp by me being outside!

I appreciate it's my discretion to leave but surely something must be done about this as that's not what was intended by the change. I only work for Local Authorities, thats not to say I cant work in private practice but my experience is 14 years in Local Government so that's where my skill lies better.

What are peoples views?

[eek]

How can this be permissible? I have had my working arrangements agreed in a separate document prior to my start date of 13.3.17. Practices are outside of scope.

PSB has informed agency that they are going to deem all contractors inside as they don't want to take the risk. PSB has said to agency they agree I'm outside but they're not going to declare me outside due to risk of penalty and other contractors are inside and they don't want mutiny in the camp by me being outside!

I appreciate it's my discretion to leave but surely something must be done about this as that's not what was intended by the change. I only work for Local Authorities, thats not to say I cant work in private practice but my experience is 14 years in Local Government so that's where my skill lies better.

What are peoples views?

You are aware that the blanket everyone is inside approach is the one HMG was hoping for...

And its understandable if the PSB is both risk adverse and poorly advised..

Personally I would be invoicing for the week citing the change in contract circumstances and not returning on Monday.

[Qdos Contractor]

There is a strong likelihood that the final legislation, released on Monday, will include a clear 'reasonable care' provision on the part of the PS body making the determination. Something OP's client clearly isn't doing.

It will probably state that, if they don't show reasonable care, they will become the 'fee payer'.

[hollyblue]

There is a strong likelihood that the final legislation, released on Monday, will include a clear 'reasonable care' provision on the part of the PS body making the determination. Something OP's client clearly isn't doing.

It will probably state that, if they don't show reasonable care, they will become the 'fee payer'.

Thanks for your response, that's helpful. Do you know if the legislation has been published now? And where I can access if please.

[Qdos Contractor]

Thanks for your response, that's helpful. Do you know if the legislation has been published now? And where I can access if please.

Finance Bill here.

Page 136 of the doc has the reasonable care provision I referred to.

[jamesbrown]

Finance Bill here.

Page 136 of the doc has the reasonable care provision I referred to.

Yep.

If—[...] the client complies with the duty under subsection (1) but fails to take reasonable care in coming to its conclusion as to whether the condition in section 61M(1)(d) is met in the case [...] section 61N(3) and (4) have effect in the case as if for any reference to the fee-payer there were substituted a reference to the client, but this is subject to section 61V

Translated: if the PSB is negligent in their assessment and that assessment is subsequently found to be wrong, the liability rests with the PSB, assuming the PSB wasn't acting on fraudulent information. Of course, what constitutes "reasonable care" is arguable in the context of the ESS, since it wasn't put together with reasonable care.

[WordIsBond]

It's easy for me to say, because I could walk away and not have to work again. But I'd be very ready to walk away.

I'd explain it to them this way. 1. If they declare you inside on this contract, HMRC is likely to go back and say your previous contracts with them were inside as well, and it is going to cost you a lot of money, not just on your current contract. 2. The legislation calls for "reasonable care" in making the assessment, and that isn't what they are doing. 3. If they won't exercise reasonable care, you understand that, but you can't stay in the same contract via the same agency, and you'll be giving notice.

If they want you back, they have the following options.
1. Declare you outside IR35 (which they know is the truth, anyway).
2. Offer you a new contract through a different agent, at a rate sufficient to compensate for being declared inside on the new contract. (This probably gives you some protection from the en masse investigation that is coming of everyone who stays in the same contract and is now declared inside.)
3. Offer you a new contract direct (no agent), at a rate sufficient to compensate for being declared inside. (But make sure you have enough funds to carry you through if they are late payers, if you go direct.)

That's what I'd do.

You are taking a huge risk if you stay with the same agent and are declared inside. PERHAPS if you can get them to put in writing that they know you are outside, but are declaring everyone inside because of risk aversion, that would give you a chance to fight off any retroactive investigations. But I wouldn't risk it. You either need a new client or a new agent.

[malvolio]

.... PERHAPS if you can get them to put in writing that they know you are outside, but are declaring everyone inside because of risk aversion, that would give you a chance to fight off any retroactive investigations. But I wouldn't risk it. You either need a new client or a new agent.

That's an interesting approach: "We know what the law is but we're going to ignore it because it is safer to do so"...

But the outside determination in this brave new fantasy world is actually quite simple. If you are providing a service or a physical deliverable you are outside. "Service" in this context means something like being engaged as a member of a fully outsourced, managed service such as a Service Desk function, or - more relevantly to most of us - providing a skill set that is not available within the client's staff, such as technical knowledge of a given CRM system or expert consultancy at some level, such as service architecture or Testing Strategy. Being any sort of general purpose PM, tester, coder or ops staff isn't it, regardless of the accepted nature of your engagement..

[BrilloPad]

That's an interesting approach: "We know what the law is but we're going to ignore it because it is safer to do so"...

I have seen it before with social services. The government seems to be allowed to break laws without sanction.

[chineseJohn]

The NHS organisation I'm at has made a blanket decision.

They've also made a policy of no substitution.