Reply to: Consultancies providing services to pulbic sector and contractors....

[northernladuk]

I still want to know what the pulbic sector is.......

[SlipTheJab]

The margin is not 50% these days, except for ≤ 2 month gigs. It is more like 30-35% in most cases, down to 25% for larger PS projects, in exchange for larger volumes. But they take delivery responsibility, while a typical recruiter who doesn't take any responsibility whatsoever charge 20% (12% if under the CL1 framework).

Indeed, I'm not knocking them, they seem very good at what they do and I think their way of working makes the contractors they engage outside even for a PS project, others on here disagree though

[m0n1k3r]

But if EE say you are outside and you're not then its their margin that gets hit (don't forget they charge each bod out as at least twice what they pay the contractor, they will up their rate by 50%, gov will pay it as no choice and they will carry on), only loser is the tax payer but we know no one in government cares about that (its all about Daily Mail headlines at the end of the day).

The margin is not 50% these days, except for ≤ 2 month gigs. It is more like 30-35% in most cases, down to 25% for larger PS projects, in exchange for larger volumes. But they take delivery responsibility, while a typical recruiter who doesn't take any responsibility whatsoever charge 20% (12% if under the CL1 framework).

[m0n1k3r]

Sadly I believe the right for Equal Experts to determine their status was removed between the initial consultation and the Autumn Statement - so I don't think its in their remit. And I doubt anyone at HMRC will determine any contractors there as outside in the early days (the risk news stories stating one rule for us and another for everyone else is just far too great).

I doubt that EE's clients even know who is a contractor and who is not. They all represent EE and work for EE, not for the client.

[gables]

It depends how risk adverse you are when it comes to HMRC. I really wouldn't want an existing contract to become inside IR35 come April as I suspect HMRC would starting look at the contract as a whole not just the bit from April 1st onwards - so my advice would be to not give them the opportunity to start that argument by moving elsewhere....

Yep, I agree with that, but for new contracts it should just form part of the picture when deciding to take on a piece of work.

[eek]

Surely it's only a swerve if that under IR35 what's paid to your ltd is untenable and that depends on your situation?

It depends how risk adverse you are when it comes to HMRC. I really wouldn't want an existing contract to become inside IR35 come April as I suspect HMRC would starting look at the contract as a whole not just the bit from April 1st onwards - so my advice would be to not give them the opportunity to start that argument by moving elsewhere....

[gables]

So what's the upshot of AS then - avoid PS from April 17 onwards until they sort this out?

On a PS contract which ends in Feb 17 with talk of an extension but sounds like it may be one to swerve.

Surely it's only a swerve if that under IR35 what's paid to your ltd is untenable and that depends on your situation?

[northernladuk]

So what's the upshot of AS then - avoid PS from April 17 onwards until they sort this out?

On a PS contract which ends in Feb 17 with talk of an extension but sounds like it may be one to swerve.

Erm. Did you read this thread? You can't have missed Eek mentioning his advice surely lol.

[Ltd ability]

So what's the upshot of AS then - avoid PS from April 17 onwards until they sort this out?

On a PS contract which ends in Feb 17 with talk of an extension but sounds like it may be one to swerve.

[Nayab]

I'm very wary of this situation, but certainly not dismissive. I'd consider the merit/reward of any offer and compare it with the additional burden before deciding.

[perplexed]

Sadly I believe the right for Equal Experts to determine their status was removed between the initial consultation and the Autumn Statement - so I don't think its in their remit. And I doubt anyone at HMRC will determine any contractors there as outside in the early days (the risk news stories stating one rule for us and another for everyone else is just far too great).

Surely EE would of course tell contractors, who they need to provide services to PS, everything would be ok. It's in their own interests.

I'd personally not touch PS for at least a year - a) we all know teething problems will crop up and b) get a better view of how the land really lies rather than hypotheticals.

[barrydidit]

You do I've never bailed on a contract dont you?

Good for you PC.

So we are all happy that, even worse than a contractor sponging JSA between gigs, is the contractor who welches on an agreement?

[northernladuk]

Which is fine so long as the daily rate goes from 500 a day to 750 a day, like I say its all smoke and mirrors and the tax payer will foot the bill regardless.

Which it won't.

[SlipTheJab]

The public sector body makes the assessment and tells the agency that they have to treat you as inside and deduct the appropriate taxes and remit those to HMRC. Either the agency does that or they pretend to do that - pretending to do that and getting caught risks more than just the margin.

Alternatively, EE convince the end client that you are outside IR35 and everything stays as it is - the contractor gets treated correctly and they are responsible for their own taxation. But I can't see (m)any public sector bodies being willing or able to essentially step away from making the assessment, which is where the "workarounds" fail in my mind.

Which is fine so long as the daily rate goes from 500 a day to 750 a day, like I say its all smoke and mirrors and the tax payer will foot the bill regardless.

[TheFaQQer]

But if EE say you are outside and you're not then its their margin that gets hit (don't forget they charge each bod out as at least twice what they pay the contractor, they will up their rate by 50%, gov will pay it as no choice and they will carry on), only loser is the tax payer but we know no one in government cares about that (its all about Daily Mail headlines at the end of the day).

The public sector body makes the assessment and tells the agency that they have to treat you as inside and deduct the appropriate taxes and remit those to HMRC. Either the agency does that or they pretend to do that - pretending to do that and getting caught risks more than just the margin.

Alternatively, EE convince the end client that you are outside IR35 and everything stays as it is - the contractor gets treated correctly and they are responsible for their own taxation. But I can't see (m)any public sector bodies being willing or able to essentially step away from making the assessment, which is where the "workarounds" fail in my mind.