Public sector contracting

[Old Greg]

I agree that FT's might provide an area of temporary respite. However, 48 hours after the first case of an FT dodging these rules hits the Daily Mail, the Treasury will find a way.

Some of the FTs are robust in defence of their independence. I wonder about CCGs as well.

[bobspud]

But even so, 60% of something is still better than 100% of nothing - and if thousands of ex public sector contractors hit the private sector market, rates will plummet - assumning you can even secure a contract.

Ironically public sector rates might nudge up a bit when they have problems filling roles, but they won't go up 40%.

Whos going to go near the private sector? The treasury just opened a lethal can off whoop-arse but not on the intended victims... I got the capita email just like the OP. At the moment it's still quite vanilla and shows enough of a gap that most outside IR35 will not have too much of an issue until it changes...

But either way my site has a hundred contractors. The joke at the induction was that contractors only stay six years instead of thirty Most of them would be screwed if they have to pay back tax... They are not discussing a possible I'm not staying here if this happens they are hitting jobserve with a vengeance. As of September hundreds and hundreds of jobs will come up as the old wood dives out the door of every government department in a panic. They won't have a problem finding the next job because the treasury just set the time bomb off in every government department and they will all have holes to plug. (not by guys from the private sector though you don't have the right clearances and the new six months limit to keeping you won't give you enough time to get cleared now the DVA will be inundated with movement requests for people shuffling around the departments!)

At our client as more and more contractors start to hand their notice in then the whole executive programme will grind to a halt and start to unravel the cost will be in millions!

[eek]

Whos going to go near the private sector? The treasury just opened a lethal can off whoop-arse but not on the intended victims... I got the capita email just like the OP. At the moment it's still quite vanilla and shows enough of a gap that most outside IR35 will not have too much of an issue until it changes...

But either way my site has a hundred contractors. The joke at the induction was that contractors only stay six years instead of thirty Most of them would be screwed if they have to pay back tax... They are not discussing a possible I'm not staying here if this happens they are hitting jobserve with a vengeance. As of September hundreds and hundreds of jobs will come up as the old wood dives out the door of every government department in a panic. They won't have a problem finding the next job because the treasury just set the time bomb off in every government department and they will all have holes to plug. (not by guys from the private sector though you don't have the right clearances and the new six months limit to keeping you won't give you enough time to get cleared now the DVA will be inundated with movement requests for people shuffling around the departments!)

At our client as more and more contractors start to hand their notice in then the whole executive programme will grind to a halt and start to unravel the cost will be in millions!

Its a great example (possibly the best of all time) of the rule that politicians should be careful what they say and wish for. Its a great example of getting exactly what you asked for without realising the unintended consequences.

[BolshieBastard]

I don't blame folks for trying to push the boundaries on this - and if they can convince an FD of their argument, then good on them. So I say, go for it.

But you're right - there is a very blinkered approach on this. If PS ClientCo takes a hard interpretation on this, you're screwed - you either accept the terms and abide by them, or get terminated - simples. Just because it's possible in your own mind to form an argument - doesn't mean that ClientCo will automatically accept such an interpretation over what their paymasters will say.

This is what Im saying \ believe. I dont think people will be able to push the boundaries because Government Departments will be forced into line by the Treasury.

People can duck and dive, say it wont affect them etc but, the Government's will is to make sure every contractor working for them will be treated as permie civil servants after the pre requisite conditions (rate and time) are met.

The only other question is, how will contractors working on Government contracts via the likes of HP, Crapita etc are treated. I suspect it will be the same as above, on site for 6 months, day rate £220 pd or more, treat as permie. It really wouldnt make sense to do it any other way.

Just my opinion though.

[Old Greg]

This is what Im saying \ believe. I dont think people will be able to push the boundaries because Government Departments will be forced into line by the Treasury.

People can duck and dive, say it wont affect them etc but, the Government's will is to make sure every contractor working for them will be treated as permie civil servants after the pre requisite conditions (rate and time) are met.

The only other question is, how will contractors working on Government contracts via the likes of HP, Crapita etc are treated. I suspect it will be the same as above, on site for 6 months, day rate £220 pd or more, treat as permie. It really wouldnt make sense to do it any other way.

Just my opinion though.

The line is important. Government is a sub-set of public sector. How far will it extend?

[BolshieBastard]

The line is important. Government is a sub-set of public sector. How far will it extend?

Who knows? Initially I think its going to be driven in Government Departments and qangos. How far beyond them it spreads is anyone's guess.

[bobspud]

This is what Im saying \ believe. I dont think people will be able to push the boundaries because Government Departments will be forced into line by the Treasury.

People can duck and dive, say it wont affect them etc but, the Government's will is to make sure every contractor working for them will be treated as permie civil servants after the pre requisite conditions (rate and time) are met.

The only other question is, how will contractors working on Government contracts via the likes of HP, Crapita etc are treated. I suspect it will be the same as above, on site for 6 months, day rate £220 pd or more, treat as permie. It really wouldnt make sense to do it any other way.

Just my opinion though.

This shows what the government is facing...

Ministry of Defence | About Defence | Corporate Publications | Financial Reports | Remuneration

It is a list from mod circa April. I would say that based on the report wording the chaps they wanted were at the top of the list and at board level being paid into a private account...

For the contractors they will be safe as long as they move on in the six months. That's not a problem for them, but the government departments won't have finished the work and will be stuck looking for a replacement mid project...

[BolshieBastard]

This shows what the government is facing...

Ministry of Defence | About Defence | Corporate Publications | Financial Reports | Remuneration

It is a list from mod circa April. I would say that based on the report wording the chaps they wanted were at the top of the list and at board level being paid into a private account...

For the contractors they will be safe as long as they move on in the six months. That's not a problem for them, but the government departments won't have finished the work and will be stuck looking for a replacement mid project...

I agree people will take the contracts and move on when the 6 months are up. I'd take a contract on that basis. Tough tulip on the government project will go down the tubes though. They'll reap what they sow.

[DaveB]

Come on, it's perfectly simple. you work for the PS in a senior role and not on a project, all your income is subject to PAYE/NICs, and the client wants to be able to verify that. They are disregarding rules on Shadow Directors and requiring you to act illegally as a director, but they don't care. It's not even putting you inside IR35, since you don't get hte 5% discount. Little details like how you work, and weasly words about "I already pay all the taxes due" won't work. End of.

It's more than that Mal, based on the mail I got.

Yes seniors not acting in a specific project role are the main target:


board members and senior officials with significant financial responsibility should be on the organisation’s payroll, unless there are exceptional circumstances – in which case the Accounting Officer should approve the arrangements and such exceptions should exist for no longer than six months

But also, and it's not clear if this is a separate clause or tied to the one above:

engagements of more than six months in duration, for more than a daily rate of £220, should include contractual provisions that allow the department to seek assurance regarding the income tax and NICS obligations of the contractor and to terminate the contract if that assurance is not provided

So potentially anyone on more than £220 / day for more than 6 months is caught, regardless.

[Old Greg]

It's more than that Mal, based on the mail I got.

Yes seniors not acting in a specific project role are the main target:


board members and senior officials with significant financial responsibility should be on the organisation’s payroll, unless there are exceptional circumstances – in which case the Accounting Officer should approve the arrangements and such exceptions should exist for no longer than six months

But also, and it's not clear if this is a separate clause or tied to the one above:

engagements of more than six months in duration, for more than a daily rate of £220, should include contractual provisions that allow the department to seek assurance regarding the income tax and NICS obligations of the contractor and to terminate the contract if that assurance is not provided

So potentially anyone on more than £220 / day for more than 6 months is caught, regardless.

But as you say, it's not yet clear. What are obligations?