Reply to: How do you know if your contract is public sector

[perplexed]

It's fairly clear all the examples using consultancies scream that people are inside.... the example that doesn't is a fixed price piece of work done remotely...

Do you want to work for a consultancy which is on a client site on a project that is likely time and materials based.

Likely to be T&M, I'd agree - that relies upon contractor getting that information out from the consultancy, to be 100% accurate.

It's perfectly valid that a SME/Consultancy can be based inside PS client property, especially where there are restrictions around the accessible data, connectivity of outside devices etc. As long as that work is ringfenced within the consultancy boundary ( ie the difference between "Consultancy X provide PS client with X developers" and "Consultancy X provide PS client with a solution that implements these requirements, to this given timescale with these deliverables" ).

I'd not want to work any more PS than I've done in the past for reasons other than the April changes tbh...

[eek]

To be fair from what he heard PC is well inside by the old rules never mind the new ones. Easy pickings if they do come at us retrospectively.

I do wonder how many other people IPSE have been giving false comfort to....

[northernladuk]

Agreed, but I think psychocandy is a BoS contractor, onsite at a PS client. If so, it's clear that the new rules will apply. If a consultancy is supplying labour, much like an agency, the rules apply. I agree that there is considerable greyness, but not really on this specific issue of consultancies supplying bodies who then receive their instructions from the PS client.

To be fair from what he heard PC is well inside by the old rules never mind the new ones. Easy pickings if they do come at us retrospectively.

[jamesbrown]

Nothing's ever clear

Agreed, but I think psychocandy is a BoS contractor, onsite at a PS client. If so, it's clear that the new rules will apply. If a consultancy is supplying labour, much like an agency, the rules apply. I agree that there is considerable greyness, but not really on this specific issue of consultancies supplying bodies who then receive their instructions from the PS client.

[eek]

Nothing's ever clear.

Is the consultancy just "working" for PS client by providing bums on seats integrated with permies at PS client or is the consultancy providing solutions for PS client, for example a computer system for which PS client play no part in development aside from providing requirements?

It's fairly clear all the examples using consultancies scream that people are inside.... the example that doesn't is a fixed price piece of work done remotely...

Do you want to work for a consultancy which is on a client site on a project that is likely time and materials based.

[perplexed]

Is this not clear? Example 3 in the doc showed that a contractor working under a consultancy providing services to ps was caught and the consultancy would collect the taxes .

It's been a while since I looked at the doc though

Nothing's ever clear.

Is the consultancy just "working" for PS client by providing bums on seats integrated with permies at PS client or is the consultancy providing solutions for PS client, for example a computer system for which PS client play no part in development aside from providing requirements?

[youngguy]

Its a complete mess to be honest.

I'm the same, contracted to a consultancy (A) who provide services to PS client (B). B pays the A for services - they have no say in how those services are provided. Yes they know whos on site from A but they generally don't know or care whos perm or contractor. They also have no say in who A provides.

From As point of view, they'd like things to go on as they are. Suits them to have a few contractors. Can't imagine it would go down too well if the B stuck their oar in and said X needs to pay proper tax - sort it out A. After all, the business relationship is one of supplier and customer - not one where the customer dictates to supplier how they run their business.

So far, A has sent an email to all the contractors saying basically we dont know how its going to work out yet.

Would suggest it needs to be sorted BEFORE its going to be possible to sign an extension past April. For instance, my current gig runs until end Feb so if I renew it going well into.

As someone said, earlier in the thread, its a LOT of money. I dont want to take a gig thinking its going to be £X per day then for someone to decide and say sorry its £100 a day less because we've taken the tax out.

For me, Im going to need confirmation in the contract that this wont happen.

Of course, as with all things, clients won't even do anything about this and will only start to be concerned months/years down the line when they realise they can't get contractors any more.

Is this not clear? Example 3 in the doc showed that a contractor working under a consultancy providing services to ps was caught and the consultancy would collect the taxes .

It's been a while since I looked at the doc though

[psychocandy]

Its a complete mess to be honest.

I'm the same, contracted to a consultancy (A) who provide services to PS client (B). B pays the A for services - they have no say in how those services are provided. Yes they know whos on site from A but they generally don't know or care whos perm or contractor. They also have no say in who A provides.

From As point of view, they'd like things to go on as they are. Suits them to have a few contractors. Can't imagine it would go down too well if the B stuck their oar in and said X needs to pay proper tax - sort it out A. After all, the business relationship is one of supplier and customer - not one where the customer dictates to supplier how they run their business.

So far, A has sent an email to all the contractors saying basically we dont know how its going to work out yet.

Would suggest it needs to be sorted BEFORE its going to be possible to sign an extension past April. For instance, my current gig runs until end Feb so if I renew it going well into.

As someone said, earlier in the thread, its a LOT of money. I dont want to take a gig thinking its going to be £X per day then for someone to decide and say sorry its £100 a day less because we've taken the tax out.

For me, Im going to need confirmation in the contract that this wont happen.

Of course, as with all things, clients won't even do anything about this and will only start to be concerned months/years down the line when they realise they can't get contractors any more.

[jamesbrown]

Desparation will see a nod and a wink agreement for roles to be outside, from expediency.

Unless they're for specialists, not BoS contractors, I think that's going to be tough. There's a limit to what you can do with actual working practices for BoS roles. Finding more money would be less risky, if it becomes critical. I don't know, I'm guessing along with everyone else. We'll have to wait and see how it pans out, but I'm not optimistic (or anywhere near the PS )

[perplexed]

You'd think, but the fee payer is actually the deemed employer, so they'll be on the hook. In other words, would an agency be willing to risk an outside determination made by a PS client? They might if the rules were so tightly calibrated towards false employment, but it's doubtful. Whether the agency would have a case to sue the PS client for a wrongful determination is also interesting on some level of . However, the big picture seems fairly clear - very few, if any, outside IR35 contracts.

Initially very few.

In reality, may will be within by PS orgs will claim outside to get things done. If that means being amenable on working practices, absolutely.

I've had around 250 calls ( lost count tbh ) with regards to one specific PS org since August across a limited number of projects. Had 4 today about another PS org - all for roles which the job spec indicates to me is the same role they've been looking to contract out for a year or so. Same project description, same skills.

Desparation will see a nod and a wink agreement for roles to be outside, from expediency.

[jamesbrown]

Presumably the end client will be liable for the employer tax that should have been deducted

You'd think, but the fee payer is actually the deemed employer, so they'll be on the hook. In other words, would an agency be willing to risk an outside determination made by a PS client? They might if the rules were so tightly calibrated towards false employment, but it's doubtful. Whether the agency would have a case to sue the PS client for a wrongful determination is also interesting on some level of . However, the big picture seems fairly clear - very few, if any, outside IR35 contracts.

[LondonManc]

I reckon at some point there will start to be roles that the client deems outside IR35. However what happens if HMRC disagrees with this? Presumably the end client will be liable for the employer tax that should have been deducted, but what about the knock on effects to the contractor. If you are inside IR35 then you can't claim t&s expenses. So would HMRC come after you for the amounts you have claimed which you shouldn't have been allowed to?

HMRC will want their pound of flesh. They reckon (quite reasonably) that over half of all contract roles should be inside. I reckon that if they get a 60% inside rate once the s**tstorm settles, they'll be happy.

[BoredBloke]

I reckon at some point there will start to be roles that the client deems outside IR35. However what happens if HMRC disagrees with this? Presumably the end client will be liable for the employer tax that should have been deducted, but what about the knock on effects to the contractor. If you are inside IR35 then you can't claim t&s expenses. So would HMRC come after you for the amounts you have claimed which you shouldn't have been allowed to?

[youngguy]

"They've not got any free permies to do the work, no SME involved to do the work so they've determined it's a contract role".

Didn't really convince me tbh.

I had something similar a while back . Just say you are happy to consider it as soon as you get written confirmation from the agent/client it is outside and if that changes in future your ltd won't be liable for the tax . That soon wakes them up and gets them nervous and off the phone.

[perplexed]

Is the right answer.

The real fact is that of the contract market in IT, over half should be inside IR35 but are not. While the contracts issued may be reviewed as outside, working practices for so many contractors and their own behaviours put them inside.

Perhaps this is the kick up the contracting industry's 'arris that was needed?

I'd agree. The contract side is easily solvable, has been for a long, long time.

Working practices is still a fine art. I'd say the reality is it's rare that all the ducks are in a row to ensure you're 100% by anybodies stretch of the imagination undeniably outside IR35. Most know enough to structure things so they are virtually outside, or more accurately on balance outside.