RBS, contractors and IR35

[northernladuk]

We will also see the rise of what I call "Group Service Companies" which are basically groups of contractors working on similar projects and/or the same client. I know that these have a number of practical and legal difficulties, but none of them are insoluble and if the difference between take home rates is enough, they will be used.

I'm not so sure. This idea was floated at the Public Sector change and it didn't happen. I'm sure the private sector is different and in some cases a group of contractors can move to a small consultancy model but I think it's going to be very small scale in unique circumstances. It's certainly won't be the golden bullet as proven in the PS changes.

[WordIsBond]

HMM.

We are seeing HMRC making enquiries now which start with "in 16/17 you were a contractor but in 17/18 you were classed as an employee. Please explain what differences there were between the roles in those years"

Often the answer is none.

I would therefore say that things are happening and there is every indication of acceleration in that process.

You aren't the only one to say so. https://www.contractoruk.com/forums/...ml#post2658357

[WordIsBond]

No it doesn't. They can do that right now if they want to. If they want to try prove the role was inside all along they will have to open an investigation under the old rules and win in court just as they have to do now.

And since the whole thing is subjective the fact that the client now deems the role to be inside will be very helpful to their argument.

If I were in a long-term outside contract and it were deemed to be inside by the client, I'd leave. I would not work in that role under those terms. I might accept another inside contract but not in the same role. HMRC said they wouldn't necessarily target people like that. That's just great, you might be one of the few they miss. But if they do target you chances are high you'd lose.

I would be hesitant to even accept a different role at the same client, unless it were outside.

[JohntheBike]

No, it's just that he was interacting with me and so blown away by the brilliance and force of my arguments. Usually he's interacting with, er, someone else.

[northernladuk]

And since the whole thing is subjective the fact that the client now deems the role to be inside will be very helpful to their argument.

On the face of it maybe but they've got to prove it with details. I'm sure QDOS would make short work of most cases. I'd like to see them comment on this.

If I were in a long-term outside contract and it were deemed to be inside by the client, I'd leave. I would not work in that role under those terms. I might accept another inside contract but not in the same role. HMRC said they wouldn't necessarily target people like that. That's just great, you might be one of the few they miss. But if they do target you chances are high you'd lose.

I would be hesitant to even accept a different role at the same client, unless it were outside.

I agree and is exactly what I did with my PS role and took another inside one since. If my current client put me inside though, I'd consider staying depending on the offer. I'm as confident as I can be I'm outside now so any changes would mean the role would change and I'd be happy to defend it.

If the question is will I get investigated if I switch inside, then I think the general answer is no, BUT some people that have been kidding themselves they are outside will need to worry.

[jamesbrown]

On face value this would seem the most straightforward way of doing it. Problem is with the reduction in take home money it is going to limit the talent available to them.

Right. However, one important difference with the PS rollout is that there won’t be anywhere else for BoS contractors to go, so I doubt there will be the same upward pressure on compensation. What can those contractors do? I come back to them not being in a position of power. It will change the balance towards permiedom for some though. If only those crappy ex-contractors opt for FTCs, then market forces will change the balance again, perhaps, but there will still be a large net loss of contracts, I think.

[jamesbrown]

You aren't the only one to say so. https://www.contractoruk.com/forums/...ml#post2658357

It’s all so depressingly predictable. Putting aside the rhetoric, the idea that HMRC were going to turn down that opportunity is laughable. Everything is right there; candy from a baby.

Anyone that stays with the same client and accepts a change in status post rollout is absolutely nuts, even with a watertight change in WP (just not worth the stress).

[JohntheBike]

Right. However, one important difference with the PS rollout is that there won’t be anywhere else for BoS contractors to go, so I doubt there will be the same upward pressure on compensation. What can those contractors do? I come back to them not being in a position of power. It will change the balance towards permiedom for some though. If only those crappy ex-contractors opt for FTCs, then market forces will change the balance again, perhaps, but there will still be a large net loss of contracts, I think.

I believe that from whichever perspective you look at it, there will be both winners and losers in the client and contractor sectors. The clients had created the environment whereby HMG found it necessary to act with IR35, so on balance I'd say the clients will feel the affects more by losing the ability to have individuals work like employees, but without the associated costs. Many on here have said there will still be a demand for contractors, but perhaps many with the required skills will now leave contracting altogether.

[jamesbrown]

On the face of it maybe but they've got to prove it with details.

It’s the contractor that needs to prove it.

But, even in the best case scenario, that process is not going to be stress-free. The risk isn’t only about the outcome.

[JohntheBike]

It’s all so depressingly predictable. Putting aside the rhetoric, the idea that HMRC were going to turn down that opportunity is laughable. Everything is right there; candy from a baby.

Anyone that stays with the same client and accepts a change in status post rollout is absolutely nuts, even with a watertight change in WP (just not worth the stress).

mmm, not sure about that. Some, like me, could be in a very strong position to expose the issues that the April 2020 roll out will create. But yes, there is the stress factor to be considered. It will take time for the issues to settle, but I guess I'll not be around to discuss the implications.