Reply to: Off-payroll workers, including Limited Company Contractors meeting their HMRC tax....

[Old Hack]

The implementation will be the difficulty. Iy looks from OH's post that you need a Low Risk score or sign the contract.

It's precisely what has been mooted.

[Old Hack]

The hot desk option, how can one prove that you actually worked from the hot desk if you do get investigated ?

As per the insurance, is it indemnity insurance that is erquired or public liability ?

Advertising on a website, does this mean that if one owns a website you advertise your services or perhaps advertise your services on those owned by friends ?

Thanks in advance.

You are invoiced for office rental. So you claim in your accounts for office rental. If you are investigated, they'd see that, contact the people and be told, yes, they rented office space.

Advertising, is advertising. As long as the site pertains to your business, so the advertising is apt, there's nothing really they can do about it.

But advertising is a large market. I have already got into a ring of contractors advertising on each others professional sites. It's actually a good idea anyway, as they are all legitimate sites and have traffic. WHo knows (not had work from one yet though), but it is, at the end of the day a revenue in, and advertising.

PII is required, the indemnity. It's good practice to have it anyway, but it does give you points, and points mean prizes.

Another option, I am discussing with some contractors I know, is farming out your own work i.e. if you need some work done for your business, then send it to a contractor, and arrange for some work from them. If you've been in the business long enough, you'll know enough people to equal out invoiced amounts over 3/4 years.

The thing is, above all, to be savvy.

HTH


IR35FanClub

I have long done these things anyway, to stay out of IR35. I return around 81/82% of my contract rates. If I had to pay proper taxes, this would go down to about 65%, a lot of money in my case. My contracts are incredibly well paid, and I don't want to leave them, being I work mostly from my own office.

I was posting the mail up for others to see what was happening; it doesn't really affect me. I scored 37 points.

[speling bee]

Well, it isn't great news, but not terrible news.

My agency has just issued guidance on the new Public Sector contracting rules:

Good Afternoon

As previously communicated, following a review in May this year the government introduced new legislation which requires government departments and their Arms’ Length Bodies to provide assurance that any ‘off-payroll workers’, including Limited Company Contractors, are meeting their HMRC tax obligations.

The new legislation applies to any contracts of more than 6 months’ duration and to all ‘off-payroll workers’ who are paid £220 per day or more. As you may be aware the ******* have been offering contracts of less than 26 weeks’ duration in order to achieve immediate compliance with the legislation.

The ********* is now aligning its contracts, as are all of our other public sector clients; to have the new legislation adhered to in a timely yet considered manner. **** and **** have worked closely with the Envi******** to establish an efficient process to provide the necessary assurance that Limited Company Contractor’s tax obligations are met, with every effort being made to try to minimise the impact of these new terms and conditions.

In order for the ******** to provide assurance that their ‘off-payroll workers’ are meeting their HMRC tax obligations you are required to do the following things;

1) Undertake a Business Entity Test and provide Experis with the result/score once complete – please see attached guidance.

· * The level of assurance which you may be required to provide will be dependent on your ‘Business Entity Test score’ and ‘risk category’. The outputs of your test and any potential impact will be discussed with you on an individual basis.

2) Sign a revised ******** Contract

Please find attached a copy of the revised ********* Contractor Terms & Conditions which is being utilised by both ***** and ****** for the entire contractor workforce. We are issuing these terms allowing 28 days for you to review and sign up to these new terms. If you decide not to agree to the revised terms, our only option will be to exercise our rights under the existing terms and conditions to terminate the engagement. The exact timing of the notice to terminate and the notice period to be applied will be at our discretion but it is anticipated termination will occur within 2 months of your decision not to sign up to the revised terms and conditions.

Every attempt has been made to minimise the impact of the revised terms. Due to the substantial review undertaken, The **************** will not accept any further changes to the proposed terms as they are deemed fit for purpose. Please confirm your acceptance to us in writing to _________ no later than Monday 19th November at 10:00am.

We will email again on an individual basis tomorrow afternoon providing you with a personalised contract – from there we will contact you over the coming days to ensure you are in receipt of both emails and to answer any questions you may have.


It effectively states if you are inside IR35, then you have to up your game tax wise, otherwise you're ok. The business entity tests are quite painful. Luckily, for me, I have my own office, my own insurance, have more than one revenue stream and I employ someone, so I come out as extremely low risk. But you have to think this is either going to kill contracting in the public sector, or raise rates.... I know which I think.

Without sounding trite, if you are caught up by this, then write to your MP.

For those who wish to discuss this. PM me. I have a large office I am willing to rent out hot desks for a small amount of money each year. You will have to attend more than once or twice a year and work from it, but it's an easy way to gain 10 points, then pay for your own PLI and you have anotehr 10 points. That's 20 and makes you medium risk. Spend £1200 on advertising and you're out of the IR35 woods.

This might be a good point to remind everyone of the following web page...

Public Sector Review & Controlling Persons

HTH

The implementation will be the difficulty. Iy looks from OH's post that you need a Low Risk score or sign the contract.

[IR35FanClub]

Well, looking into this further, it seems fairly easy for normal contractors to be considered low risk, and avoid IR35 being enforced.

1. Rent hot desk space and agree working from home in principle - Cost around £500 p.a.

2. Pay for Public Liability Insurance - Cost around £400 p.a.

3. Advertise on Web site - Cost around £1200 p.a.

So all in, to put you in Low risk category of IR35, costs around £2k, and saves paying up to 45% of income in extra taxes. However, if you and some friends advertise on each others web sites, for £1,200 a year each, you have a revenue stream too, as well as fulfilling your obligations, so it's only going to cost you £900 odd to remove the risk.

Until they change the goalposts again.

Or you could decide that necessarily spending £1,900 a year on business expenses to avoid paying tax is a waste of money, walk away and get a contract in the private sector. Which is exactly what I've just done. I've taken a month off in between though - which I've been promising myself for 5 years! In this day and age insisting you have premises and advertise is an epic demonstration of what happens when you design by committee.

If they stop messing about with these rules or decide to sort the tax system and abandon NI and go to flat rate tax - then I might think about working for them again. Too bad - I've got a niche set of skills that every gov org I've worked for finds it hard to recruit for. Likewise the other chaps I've worked with have all walked. Now they are going to have to hunt extra hard. Luckily the market is good now, so I'm seeing the gov job rates climbing to try and attract people. If they go another 20% I'll be happy to be inside IR35.

[captainham]

This might be a good point to remind everyone of the following web page...

Public Sector Review & Controlling Persons

HTH

I can't read that again, it makes me too angry. Basically, if you're medium/high risk, all you need is a contract review to confirm you're outside IR35. Never mind working practices and everything else that goes with being outside IR35...

[malvolio]

This might be a good point to remind everyone of the following web page...

Public Sector Review & Controlling Persons

HTH

[platforminc]

Well, looking into this further, it seems fairly easy for normal contractors to be considered low risk, and avoid IR35 being enforced.

1. Rent hot desk space and agree working from home in principle - Cost around £500 p.a.

2. Pay for Public Liability Insurance - Cost around £400 p.a.

3. Advertise on Web site - Cost around £1200 p.a.

So all in, to put you in Low risk category of IR35, costs around £2k, and saves paying up to 45% of income in extra taxes. However, if you and some friends advertise on each others web sites, for £1,200 a year each, you have a revenue stream too, as well as fulfilling your obligations, so it's only going to cost you £900 odd to remove the risk.

Until they change the goalposts again.

The hot desk option, how can one prove that you actually worked from the hot desk if you do get investigated ?

As per the insurance, is it indemnity insurance that is erquired or public liability ?

Advertising on a website, does this mean that if one owns a website you advertise your services or perhaps advertise your services on those owned by friends ?

Thanks in advance.

[speling bee]

Hmmm ... that does not frustrate or worry me.

It will do if you one day find that my project has not been adequately delivered and die a horrible death.

[MyUserName]

Plus a lot of these roles require security clearance. Not easy (if impossible) for Bobs.

That is something at least, at least for the moment

[swampysarmy]

This is a very IT orientated view (and I know this forum is primarily for IT contractors). My role cannot be outsourced abroad. If I walk, they cannot adequately replace me, so their project quality and enabled benefits will be reduced.

Plus a lot of these roles require security clearance. Not easy (if impossible) for Bobs.

[The Spartan]

What frustrates/worries me is that if the public sector is emptied of contractors and then filled with Bobs it means a lot more competition for me in the private sector which will probably drive down rates

There are barely enough testers for permanent positions let alone contract ones, plus I also place great faith in the fact that I'm a lot better than them so I'm not worried by the competition

[MyUserName]

This is a very IT orientated view (and I know this forum is primarily for IT contractors). My role cannot be outsourced abroad. If I walk, they cannot adequately replace me, so their project quality and enabled benefits will be reduced.

Hmmm ... that does not frustrate or worry me.

[speling bee]

What frustrates/worries me is that if the public sector is emptied of contractors and then filled with Bobs it means a lot more competition for me in the private sector which will probably drive down rates

This is a very IT orientated view (and I know this forum is primarily for IT contractors). My role cannot be outsourced abroad. If I walk, they cannot adequately replace me, so their project quality and enabled benefits will be reduced.

[MyUserName]

What frustrates/worries me is that if the public sector is emptied of contractors and then filled with Bobs it means a lot more competition for me in the private sector which will probably drive down rates

[The Spartan]

They're better off pursuing the billions in corporation tax they're losing, as long as this exists I will avoid the public sector.