Public sector contracting

[IR35FanClub]

Actually louie comments have got me thinking something... has there ever been any test cases which fundamentally tried to undermine the IR35 legislation. I'm not aware of any. I.e IR35 is designed to make sure that people working through a PSC are not advantaged from someone working on payroll. I.e if you tot up all the benefits that a permie gets - like holiday, sick pay, not having to do about 50 hours of business admin per year, pay insurances, find work every so often etc, that it might mean actually you have no benefit over a permie? It could probably be argued in court by a successful lawyer given that most legislation is badly worded. Maybe one for PCG that!

[malvolio]

Actually louie comments have got me thinking something... has there ever been any test cases which fundamentally tried to undermine the IR35 legislation. I'm not aware of any. I.e IR35 is designed to make sure that people working through a PSC are not advantaged from someone working on payroll. I.e if you tot up all the benefits that a permie gets - like holiday, sick pay, not having to do about 50 hours of business admin per year, pay insurances, find work every so often etc, that it might mean actually you have no benefit over a permie? It could probably be argued in court by a successful lawyer given that most legislation is badly worded. Maybe one for PCG that!

What do you think theyve been saying for the last 12 years...?

[d000hg]

Actually louie comments have got me thinking something... has there ever been any test cases which fundamentally tried to undermine the IR35 legislation. I'm not aware of any. I.e IR35 is designed to make sure that people working through a PSC are not advantaged from someone working on payroll. I.e if you tot up all the benefits that a permie gets - like holiday, sick pay, not having to do about 50 hours of business admin per year, pay insurances, find work every so often etc, that it might mean actually you have no benefit over a permie? It could probably be argued in court by a successful lawyer given that most legislation is badly worded. Maybe one for PCG that!

I'm pretty sure that if you worked 11 months a year - with the remainder as holiday - you'd still come out WAY ahead. At my client I'm fairly sure I'd get the same gross income in 6 months, as a contractor compared to what my permie salary would be. And then I'd lose more as tax as a permie. So while company pension and sick pay bridge the gap slightly, it's nowhere near enough to make a strong argument in my view. especially since you can buy your own 'sick pay' cover for serious illness if you want it.

Anyway, does IR35 exist for the reason you claim? Or does it exist primarily to stop people getting out of employer NI... because ultimately that's the part HMRC are losing out on. the government might care about employee rights, but HMRC's only interest is getting their money so I thought it was principally the employer-NI thing.

[Butcheroo]

Public sector contracting

Any read this

http://www.shout99.com/contractors/s...le.pl?id=75449

Imagine a ban on freelancers. It would be chaos

[speling bee]

Any read this

Shout99 : Angry reaction to Parliament's report on freelancers

Imagine a ban on freelancers. It would be chaos

My main client is going to find it difficult. One of the reasons it gets contractors in is that its employed headcount is limited by statute, so it has no alternative.

[speling bee]

I wonder if the PCG would put in FoI requests in a few months to try to get figures on the outcomes of requests for contract changes etc.

[pelezico]

Public Body Response about PSC

Received the following from a friend of mine - might be of interest to some contractors

Dear all,



I wrote to you in July about the review we were establishing into the way we contract freelancers and how we pay individuals through service companies. We’ve now concluded the review and I wanted to let you know the outcome.



The review, which was conducted for us independently by Deloitte, found no evidence that the PB has attempted to avoid income tax or National Insurance Contributions (NIC). It also found that the PB has a high standard of tax compliance. Despite these very encouraging findings, which endorse what we told the House of Commons Public Accounts Committee, there are changes that we intend to make, to give a clearer, more consistent approach to the way we contract with freelancers.



All permanent staff including senior management are paid on a PAYE basis with tax and NIC deducted at source. We also employ a large number of on-air and off-air freelancers each year in order to help deliver our programmes and services. There are already clear HMRC guidelines in place for most freelancers, including off-air production workers, entertainers and radio presenters and we are compliant with these guidelines.



However, some on-air television and some other radio presenters fall outside these defined categories. Our policy has been to engage these presenters via Personal Service Companies (PSCs). This means that if the HMRC disagrees with the engagement status, then the liability for any penalties fall on the individual rather than the PB and licence fee payers.



Deloitte found that our policy for engaging on-air talent had been applied inconsistently, with some people being engaged as employees, some as self-employed freelancers and some through PSCs. In some cases, some of the on air talent appear to have the characteristics of ‘staff’ and might be expected to be engaged as employees.



So what we’ll be doing is this:



· The PBwill apply a new, more objective and specific employment test to freelancers. We will begin with the 804 freelance on-air talent assessed by Deloitte as a priority for review. This is likely to result in a number being offered staff employment when their current contract expires. We will then review all on-air and off-air talent paid via a personal service company.

· We will work with HMRC to develop new objective criteria for the tax treatment of on-air presenters where none currently exist. Our aim is to conclude this by the start of the new tax year in April 2013.

· We will strengthen our reporting to HMRC on the occasions when we will continue to pay via a PSC, going further than the Government’s Alexander Review recommendations on the level of detail we will provide. The clauses we have in our contracts with freelancers on tax/NIC compliance will also be strengthened.



We will begin work implementing these changes immediately. However, because there is no legal basis for terminating contracts early, moving individuals with existing contracts from service companies to PB staff or self-employed individuals will take place as their current contracts expire.



We believe that this plan of action not only ensures we continue to fulfil all our legal obligations to HMRC and licence fee payers, but means we will be following the most consistent and high standards in all our future contract negotiations. You can read the full report here.



Kind regards,

Mod note: removed name of public body (we can all guess)- but thank you pelezico.

[quackhandle]

Have noticed my previous gig is back on at the NHS daily rate, unsurprisingly is £220. I mentioned the furore of PS contracts as I was leaving to the agency (rhymes with Days), they did not have a clue what I was on about.

I guess they do now.

qh

[speling bee]

Have noticed my previous gig is back on at the NHS daily rate, unsurprisingly is £220. I mentioned the furore of PS contracts as I was leaving to the agency (rhymes with Days), they did not have a clue what I was on about.

I guess they do now.

qh

Have spoken to two agents I know today. They both deal largely with PS but had not heard of any of this.

[minestrone]

I have heard that shed loads of contractors in the Student Loans Company left when asked to sign when this came along with the extension.