Public Sector and determined as outside - better than before ?

[BoredBloke]

But surely the onus is on the PS body to periodically check the status. If the tool or working practices change to put the contractor inside, then such a significant change should mean that the contract would need to be renegotiated. If HMRC come knocking and the contractor has an outside determination then it's still the client who should be responsible. Not sure what would happen to all the monies charged as expenses to that point which an inside determination doesn't allow.

[Hobosapien]

Which is why some PS clients have and maybe still are doing blanket inside determinations. Play safe and keep it simple. Just up the rates where possible if they find a shortage of willing contractors.

Funny enough I've started my current inside IR35 PS contract (blanket deemed inside from what I can establish) but the agency are still awaiting facts of the determination as they have queried why it's inside. So there's an outside 'dream-on' chance the agency may manage to get me an outside determination, hopefully at the same much higher inside rate.

[TheFaQQer]

Which is why some PS clients have and maybe still are doing blanket inside determinations. Play safe and keep it simple. Just up the rates where possible if they find a shortage of willing contractors.

Funny enough I've started my current inside IR35 PS contract (blanket deemed inside from what I can establish) but the agency are still awaiting facts of the determination as they have queried why it's inside. So there's an outside 'dream-on' chance the agency may manage to get me an outside determination, hopefully at the same much higher inside rate.

Legally, they must give an explanation for the determination within 30 days of asking for it.

LDU argued against the NHS that a blanket decision was illegal because it failed the duty of care part of the law, so it's always worth highlighting this. In some circumstances, it might be possible for a PSB to argue that blanket decisions for particular roles is allowed (eg. a blanket decision that says that all their first line support staff are treated as inside IR35, or a blanket decision that says that all business analysts working on specific projects are outside), but I don't think that such a broad NHS determination (everyone is inside) would be able to justify meeting the duty of care provision in the Finance Act.

Fingers crossed that you get the outside determination (with increase!) - there are quite a few people who got no increase at all because "it's only fair, and giving you an increase defeats the whole point of the rules".

[Hobosapien]

Legally, they must give an explanation for the determination within 30 days of asking for it.

...

Fingers crossed that you get the outside determination (with increase!) - there are quite a few people who got no increase at all because "it's only fair, and giving you an increase defeats the whole point of the rules".

The agency asked for the explanation without me pushing them, so not sure their motivation.

As it is I'm fine with being inside on the higher rate as it's likely only for a few months (though all contracts start out that way) so I figured I'd plough as much as I can into a pension (via umbrella so gets done after minimum wage but before additional tax calculations) to offset some of the additional taxation from being inside.

To be fair on the PS I think they're 'happy' to give the rate increase as my role is different to before, more consultation on some systems I was last contractor/developer standing when originally built, so they need to pick my brains on major upcoming changes. Not sure how such a role stacks up against the indicators for being inside/outside IR35, though when I used the HMRC tool based on my guesses of how the role will work, it said I was outside despite the client saying I was inside due to not being allowed to provide a substitute (the tool took that on the chin so substitution isn't a definite inside indicator alone). So will be interesting if nothing else to see what happens with the agencies query on the determination.

[contractor abc]

Thanks for the replies and an interesting discussion ensued.

I now have a further issue that I didn't expect to arise. As a matter of course I don't opt out of the Agency Regulations and normally after a bit of a fight the agency backs off and lets things go through without the opt out being signed. I thought I was at that post-fight stage with this gig but .........

I've just had a call from higher up at the agency where they are saying that despite the role being deemed outside IR35 by the tool the fact that I am not opting out of the regulations means I want to be treated like a worker and therefore there is a risk I could be within IR35 and the agency may therefore have to do the payroll tax thing as a result.

To be fair at first I thought this was just the agency trying another tactic to get me to opt out but they are also saying they are happy to adjust the opt out contract so it matches the regulations around going back to the client and payment being made without signed timesheets/payment from client which for me were the two main reasons to not opt out.

So I'm of a mind to just go with the opt out and get those clauses in the contract but I'm interested in opinions on an outside IR35 contract and whether the opt out or not impacts the status in the Public Sector. At first I was very skeptical on any relationship being valid but the more I talked with the agency the more convincing they were that at the very least they could have a valid reason to deem me as a 'worker' and therefore they have to make tax payments on my behalf

[northernladuk]

Whichever way you go should have no impact at all on your IR35 status. Plenty of articles around offering that opinion such as...

Opt in, opt out? What the agency regs are all about (part 2) :: Contractor UK

I would hazard a guess they want you to opt out purely for their own reasons and nothing to do with helping you. Personally I wouldn't be putting a gig at jeopardy over opt out/in status but nothing wrong with you standing firm if the agency are playing silly buggers. That said be mindful that the agency can refuse to deal with contractors that don't want to opt out quite legally. Cojak and SueEllen looked in to this and I think the outcome was that it is a business decision and not discrimination.

[TheFaQQer]

I've just had a call from higher up at the agency where they are saying that despite the role being deemed outside IR35 by the tool the fact that I am not opting out of the regulations means I want to be treated like a worker and therefore there is a risk I could be within IR35 and the agency may therefore have to do the payroll tax thing as a result.

To be fair at first I thought this was just the agency trying another tactic to get me to opt out but they are also saying they are happy to adjust the opt out contract so it matches the regulations around going back to the client and payment being made without signed timesheets/payment from client which for me were the two main reasons to not opt out.

So I'm of a mind to just go with the opt out and get those clauses in the contract but I'm interested in opinions on an outside IR35 contract and whether the opt out or not impacts the status in the Public Sector. At first I was very skeptical on any relationship being valid but the more I talked with the agency the more convincing they were that at the very least they could have a valid reason to deem me as a 'worker' and therefore they have to make tax payments on my behalf

They aren't allowed to make deductions from your invoice unless you give them the legal authority to make those deductions. If the client has confirmed that you are outside IR35, though, they are taking the risk if you are subsequently found inside.

If I was in your position, I would get the clauses included in the contract and opt out - that gives you everything you need, removes the uncertainty around the opt out status, plus it means that you would be able to argue anything that happens in the future based on pure contract law rather than needing to argue around opt out status as well.