Reply to: BT - IR35

[Lance]

I guess it might be way too early to know, but do we have any numbers about the GSK situation?

If I remember correctly, 1500 contractors received an investigation letter from hmrc. Do we know:

- how many contractors were working at GSK when the letters went out?
- how many of those 1500 went/are going to court?
- how many of the above have won in court against hrmc?

- someone who's there might know.
- won't have happened yet. It takes more than a couple of months to get there.
- see previous answer.

[PCTNN]

I guess it might be way too early to know, but do we have any numbers about the GSK situation?

If I remember correctly, 1500 contractors received an investigation letter from hmrc. Do we know:

- how many contractors were working at GSK when the letters went out?
- how many of those 1500 went/are going to court?
- how many of the above have won in court against hrmc?

[Lance]

We don't often hear about the people who get investigated, found to owe some cash, and quietly pay up. We hear about the ones who went to court and lost but not the outcomes of all investigations.

and if insured QDOS/whoever may well just cough up and not fight it. Leaving the contractor no worse off (up to £50k I think) and nothing newsworthy to hear about.

[ladymuck]

We don't often hear about the people who get investigated, found to owe some cash, and quietly pay up. We hear about the ones who went to court and lost but not the outcomes of all investigations.

[Lance]

I don't agree. If 9 out of 10 contractors were "employees in disguise" in a way that would stand up to scrutiny (as opposed to your arbitrary view) then HMRC would have cleaned up a long time ago.

how so?

HMRC only have so many staff. They can only investigate so many contractors.
If there are say 1.5m contractors worthy of an investigation, and 20,000 HMRC investiagtors (there's no way near that number), and it takes 3 months to investigate, and only one HMRC staff member to complete an investigation........

In one year they can investigate just 5,000 cases.
It will take 300 years to complete the investigations.

So clean up they might do, but not 'a long time ago'......

[OrangeSquash]

you go to court if you know you have a chance to win.

contractors won't go to court if they know they can't win (because, of course, they all realise if they are employees in disguise), so the number of ir35 cases that hmrc have lost in court is a metric as useless as your comment.

I don't agree. If 9 out of 10 contractors were "employees in disguise" in a way that would stand up to scrutiny (as opposed to your arbitrary view) then HMRC would have cleaned up a long time ago.

[PCTNN]

Imagine the frustration at HMRC. 90% of contractors are just "employees in disguise" and yet the VAST majority of IR35 cases they've taken to court have been lost. Or maybe case law doesn't support your numbers.

you go to court if you know you have a chance to win.

contractors won't go to court if they know they can't win (because, of course, they all realise if they are employees in disguise), so the number of ir35 cases that hmrc have lost in court is a metric as useless as your comment.

[Lance]

Imagine the frustration at HMRC. 90% of contractors are just "employees in disguise" and yet the VAST majority of IR35 cases they've taken to court have been lost. Or maybe case law doesn't support your numbers.

maybe the number that go to court aren't representative of HMRCs investigations, nor their success rate ?

[OrangeSquash]

Permietractors will be always be permietractors; if now they are blanket assessed inside ir35, in the future they will be personally assessed inside ir35. And, from my experience, the VAST majority of contractors I've worked with were just employees in disguise (like, 9 in 10).

Imagine the frustration at HMRC. 90% of contractors are just "employees in disguise" and yet the VAST majority of IR35 cases they've taken to court have been lost. Or maybe case law doesn't support your numbers.

[PCTNN]

Absolutely, a case by case determination is much better and more fair than a blanket assessment.

Having said that, the change will not be as massive as people think.

Permietractors will be always be permietractors; if now they are blanket assessed inside ir35, in the future they will be personally assessed inside ir35. And, from my experience, the VAST majority of contractors I've worked with were just employees in disguise (like, 9 in 10).

Anyways, good for that remaining 10%, I guess.

[simes]

Completely agreed with this last.

Those that do require the best, will make the effort. And as soon as the first is seen to make that effort, in exactly the same way as the banks have all been following each other of late, so too will there be a wake of movement the other way.

Hang in there, is my mantra.

[sal]

The main reason they backed down is that the private sector was there as an escape valve and all the decent public sector contractors jumped ship. That isn't there anymore, there is no hiding place and with the market in the crapper with Brexit the downward pressure on rates and assessments is high.

There will be a fundamental shift in contracting, time will tell if there is a viable market for PSC contracting post April or not.

But the escape valve is there, just at a slightly smaller scale. There is well established public sector outside IR35 roles market and there will be plenty of private sectors companies making the effort.

It is survival of the fittest.

[PlanB]

This is exactly how it played out 3 years ago with the Public sector. Initially there was a huge wave of panic blanked inside determination. Then slowly at the beginning of 2017 organisations started making the effort to actually do determinations and not wreck their IT departments.

By the summer of 2017 most of these that had initial blanket determinations, started to slowly allow outside roles.

Permitractors and Umbrella users will be put inside to feed the beast, critical roles that require actual expertise will be placed outside to attract the required talent.

The main reason they backed down is that the private sector was there as an escape valve and all the decent public sector contractors jumped ship. That isn't there anymore, there is no hiding place and with the market in the crapper with Brexit the downward pressure on rates and assessments is high.

There will be a fundamental shift in contracting, time will tell if there is a viable market for PSC contracting post April or not.

[dsc]

I'd say that for anything where there's loads of interest from permies, they will go permies obviously. For niche skills or areas where they cannot find good permies, but which are critical, they might be more flexible, but most likely still leaning towards PAYE / umbrella, allowing PSCs as a last resort.

My opinion is that initialy a lot of clients want to do individual assessments, maybe listening to PMs / team leads who are saying that their projects are f*cked if contractors go. Then legal teams / risk analysis teams / upper management get involved and you end up with a shift towards PAYE / umbrella only.

[PCTNN]

Permitractors and Umbrella users will be put inside to feed the beast, critical roles that require actual expertise will be placed outside to attract the required talent.

so like 10% critical roles therefore outside, and 90% non critical roles therefore inside? What do you think will be the split?

Either way, much more fair better than what it's been until now.