Finance Bill 2019-20 draft legislation

[northernladuk]

yes but it isn't individual determination either, certain members of the 'group' may have different working practices to other members but be determined as a group

where I'm at, no two contractors behave in the same way with regards to working practices, some do fixed price while others are 'spoon fed' by all accounts, (and everything in between), but looks like a group determination could be seen as appropriate to those upstairs, who don't realize this, especially when guided by the wording on page 16

But they have different roles with different working conditions, contractual agreements and the like. They behave as the role dictates and the determination has to be done on the role. If you've got 10 PM's all doing the same role I don't see a problem doing a single determination. Seems common sense really.

If the client wants a PM that's bum on seat and one that's floating around consulting on multiple projects then it's a different role and needs to be done individually.

I think the confusion you are making here is looking at what the contractor does but you need to focus on the the role the client is filling. If they are different they need to be done individually, if they are the same then a single assessment should do.

[jk3838]

Perhaps we need to be a little more precise about what "blanket" means.

The Civil Services (public sector) and many large similar organisations tend to have a rigid system of grading the jobs in their offices and then they fit people into those grades. So a grade 5 might be somebody who is an administrator, a buyer, a project manager, head of paperclips. The Civil Service don't distinguish.

The risk here is that a "blanket" decision is made that ALL grade 5's are inside. If the contractor role is deemed to be grade 5, then it's inside.

We have seen this happen.

Private sector is more diverse. The statements in the consultation (sic) response are addressing the issue of whether, for example, all jobs in a department or a business unit are inside. Perhaps the best example I have heard HMRC utter is that an IT helpdesk is manned with support workers who all do the same job and therefore if one is inside, all are inside.

I think therefore that blanket decisions are at that level and not the whole contracting community as even the flawed statistics in the "evidence" from HMRC sees at least 10% of current contractors being outside IR35 when the dust settles.

what I was getting at is, does the statement on page 16 encourage those at a client to determine all engineers as 'inside' when in fact some are 'outside' and some are 'inside' by way of their different working practices ?

they don't see the differences 'on the ground' and might decide we all work in the same way when we definitely do not and do a group determination which will be incorrect for half the group either way

[sal]

I disagree with the above.

I'm not maligning QDOS and from what I see they are a professional, careful and prudent organisation.

However, unless senior management is willing to make changes to the work required or the manner in which it is delivered or supervised - in other words make changes that are real and can be proven over the course of the contract - no amount of legal massaging can alter and inside/outside determination.

That decision is (or should be) based on FACTS and no legal contract will produce a magic wand to alter those. Rather it is the opposite. The FACTS on how a job is done should drive the contract.

If QDOS (and I'm sure there are others) can influence those FACTS - and for all I know they can and do - then great.

Today most of us are self determining to be outside based on QDOS etc. contract review and adhering to suitable working practices. This self determination seem to be sufficient given the HMRC track record in court cases.

After April 2020 it will be ClientCo that will engage with QDOS etc. do to the same. It already happened in the Public sector and I have witnessed it. Even HMRC have "outside" contractors working for them.

If largely clueless Public sector managed to do it, I doubt it will be that difficult for "savvy" penny pinching private sector to achieve the same results.

[northernladuk]

what I was getting at is, does the statement on page 16 encourage those at a client to determine all engineers as 'inside' when in fact some are 'outside' and some are 'inside' by way of their different working practices ?

they don't see the differences 'on the ground' and might decide we all work in the same way when we definitely do not and do a group determination which will be incorrect for half the group either way

No. They'll do a blanket assessment because they've no idea and are it doing wrong. I don't think that clause will change anything in that area. What you've quoted is pretty clear so little chance they'll see that as what you are suggesting, they'll just do it anyway for completely the wrong reasons.

[northernladuk]

Today most of us are self determining to be outside based on QDOS etc. contract review and adhering to suitable working practices. This self determination seem to be sufficient given the HMRC track record in court cases.

After April 2020 it will be ClientCo that will engage with QDOS etc. do to the same. It already happened in the Public sector and I have witnessed it. Even HMRC have "outside" contractors working for them.

If largely clueless Public sector managed to do it, I doubt it will be that difficult for "savvy" penny pinching private sector to achieve the same results.

I didn't see the public sectors engaging external consultants to help them. It certainly didn't happen in the one I was in but my private sector client has already engaged a 3rd party firm to work with them assessing the current contracts and help them with determinations. I'm also aware that 5 or 6 other large companies in the NW are doing exactly the same so it appears some big clients are already ahead of the PS situation.

[sal]

I didn't see the public sectors engaging external consultants to help them. It certainly didn't happen in the one I was in but my private sector client has already engaged a 3rd party firm to work with them assessing the current contracts and help them with determinations. I'm also aware that 5 or 6 other large companies in the NW are doing exactly the same so it appears some big clients are already ahead of the PS situation.

I wasn't claiming that all did, in the same way as not all private sector will. But the major London university that I was working at at the time definitely engaged 3rd party, or at least that's what was claimed in the re-assuring e-mail we got from the CIO around December 2016.

"we value your contribution, bla bla bla, we have engaged an external consultant to assists us in the matter, bla bla bla, we will investigate contract terms and working practices and apply the recommendations, to ensure that the correct determination is made in each individual case, bla bla bla."

[ComplianceLady]

I didn't see the public sectors engaging external consultants to help them. It certainly didn't happen in the one I was in but my private sector client has already engaged a 3rd party firm to work with them assessing the current contracts and help them with determinations. I'm also aware that 5 or 6 other large companies in the NW are doing exactly the same so it appears some big clients are already ahead of the PS situation.

I would agree with this. I'm speaking to lots of end clients and they are recognising that a one size fits all solution increases risk (regardless of what that one solution is) so a balanced approach is required, which means a proper audit of working practices, decisions about changes and then a proper assessment with some form of insurance.

[simes]

I must admit, I have always accepted that Change in the world may not always to be ones benefit, and as such I never voted (not wanting to be caught out by a party's changing manifesto.) And this never complained about my Lot when government decisions adversely affected me.

But this 2020 Reform takes the biscuit in ways even I had never envisioned. ("Even I", in the sense that I figured the government couldn't really be That stupid)

Some musings:

Making us employees in our taxes but Not offering compensatory benefits. I might test this one out over the phone when being propositioned with an Inside IR35 contract. "Two weeks paid leave please for every six month contract...!"

What becomes of the contractors' Ltd Co's because if there is precious little and regular income, it won't be worth the £100-£150 month in accountancy fees?

If half the contracting community say Fcukit, I will go Perm, then the tax earned by the HMRC will Not increase.

And the route to challenging decisions will I believe cause the HMRC even more headaches than they have right now. Does the accepting of an Inside IR35 contract mitigate any possibility to challenge the decision. Because, down the line, the Actual working practices may make challenges an absolute requirement. For my part, I can see me taking Inside contracts but then have a series of challenges all in various stages of appeal to claw back, from someone, erroneously paid tax.

What an utter ball ache.

[Invisiblehand]

What becomes of the contractors' Ltd Co's because if there is precious little and regular income, it won't be worth the £100-£150 month in accountancy fees?

The private equity company who purchased SJD and Nixon Williams must be fuming.

[simes]

The private equity company who purchased SJD and Nixon Williams must be fuming.

Yup - good point.

As indeed must all small accountancy firms set up for contractors.

Sticking just with the contractor LtdCos, there is no way of knowing if there is reason to keep them. An odd Outside contract could appear, whereupon you have to create a whole new LtdCo if you binned your last one. Then there is the Public Liability insurances which you have to buy for a year and which may only be required for 3 months.

I used to think the HMRC just had a job to do, irrespective of how distasteful it was. Rather like traffic wardens. But chucking over the fence to x1000 individual companies that which they themselves cannot understand, together with some draconian threats to enforce, just beggars belief.

Not at all British and sporting.