Keeping it 'simple' post April

[Hobosapien]

They may have to pay SSP but any "holiday pay" comes out of YOUR earnings

Pretty sure everything will come out of the fees the client pays via the brolly, they're not doing it out of charity. Only thing is how they do it to navigate the employment rules while ensuring they retain their margin. Convoluted practices just because the govermin want to make the little people pay their 'fair' share of tax. Yeah this form of 'disguised employment' is way simpler.

I wonder if I changed my name to Starbuck HMRC would add me to their 'nothing to pay' list.

[Sausage Surprise]

Yep, if I am understanding the following thread in the Umbrella Companies sub forum right:

http://forums.contractoruk.com/umbre...fered-etc.html

They may have to pay SSP but any "holiday pay" comes out of YOUR earnings

[Hobosapien]

Really

Yep, if I am understanding the following thread in the Umbrella Companies sub forum right:

http://forums.contractoruk.com/umbre...fered-etc.html

[Sausage Surprise]

I think that's covered by the brolly, from the limited reading I've done so far, in that some brollies retain some of the charged fees to the client to then pay out to the contractor when sick or on holiday, and if not paid out for those causes it's paid out to contractor at year end, or something like that.

So contractor gets the money one way or another but it covers 'giving employees their rights' (sick or holiday pay in this case) without it costing them outside the cash flow the contractor is bringing through the brolly.

Really

[Hobosapien]

So you will be asking for paid holiday as well?

I think that's covered by the brolly, from the limited reading I've done so far, in that some brollies retain some of the charged fees to the client to then pay out to the contractor when sick or on holiday, and if not paid out for those causes it's paid out to contractor at year end, or something like that.

So contractor gets the money one way or another but it covers 'giving employees their rights' (sick or holiday pay in this case) without it costing them outside the cash flow the contractor is bringing through the brolly.

[Hobosapien]

Client has also said they will look into covering accommodation expenses (i.e. they will book accommodation as they currently do for their permies) to offset some of the lack of T&S expenses for being inside IR35 in public sector.

I expect they will quickly realise that they will need to pay out more, and therefore have larger budgets in place, for temporary resource if they are playing it safe and trying to encourage everyone inside IR35. Unless they can find some mugs accepting low rates once IR35/T&S costs deducted.

I will try to find out what has been going on with their existing contractors prior and after April 5th, once they're all back after Easter. Hopefully they've all asked for reasonable rate increases if they're moving inside IR35, or walked if they fear the retrospective investigation or client thinks they can get same resource for less from contractor's point of view.

[Hobosapien]

Been contacted by an old PS client seeing if I'm available. Will have to wait for key players to come back off Easter hols before I can progress a potential new contract with them.

In the meantime the little info they could provide: "All contractors will be deemed inside IR35 unless able to prove outside and only those with multiple clients have succeeded so far." (I didn't bother trying to argue that IR35 is on an individual contract basis so the number of clients is irrelevant), I can operate via a different agency than before (they will check there are no restrictions in their previous contract with the agency, I've already checked there are none in mine with the agency), and they recommend I use an umbrella (sounds like their preferred current agency insists on it to avoid putting contractors on their payroll, I've not got the name of the agency yet to start that digging).

So as my previous contract (many months ago) was outside IR35 (I had the QDOS review accepted by client's HR) and I operated via LTD with the agency I'm thinking the simplest course is to to draw as big a line under my old contract as I can by:

1. Insisting on using a different agency then before (so at least I'll be on different reports to HMRC from the old and new agency).

2. Accept I will be inside IR35 and ensure new working practices are vastly different than last time. e.g. accepting BAU work (not project work only), going to staff meetings and dos, using the staff facilities I previously avoided, and anything else I can think of that I had to actively be careful of last time to not look like an employee by those I was working with.

3. Use an umbrella rather than my Ltd (may yet liquidate my LTD to make IR35 investigations in years to come less likely, though need to speak to my accountant to see how that would work with all the new tax I'd be paying so not to get fleeced too much).

4. Insist on a suitable rate increase to offset the additional costs as much as possible (particularly 40% tax bracket, Employers NI, umbrella fees, etc). Still got to work out a reasonable new rate taking into account the old world had 20% corp tax and 7.5% divi tax. Hopefully it's not a massive percentage increase that they would never accept.

I can't see it being worth the aggro of trying to operate outside IR35 in the PS as of April as it's shifting quick sand and will only get deeper as they meddle with the rules, or outside determinations are reversed by client, or HMRC rules change and they apply it all retrospective, or HMRC investigate and the client doesn't sing the same tune as when they accepted being outside (if I could get them to accept that in the new world).

So to keep it 'simple' I'll consider going back to PS if the rate increase is enough to mostly offset the new taxes, and at least is should be less stress providing the distinction between new and old world is big enough to not worry too much about future IR35 investigations.

Looks like this Easter I will mostly be reading up on umbrellas, operating within IR35 and all that good stuff. Or I could just say no and run down my warchest as I've been doing so far this year while recharging my batteries (IT can be so draining sometimes) and see if there's any work in the private sector despite so many leaving or avoiding the public sector.

Any advice or obvious things I've forgotten or have wrong above, I'm all eyes.

Will be interesting to hear others experience of trying similar when they were outside IR35 prior to April and now being corralled inside by tulip scared public sector clients. I guess this is something that will get more feedback on as the new world progresses and people's experiences continue to be reported in this sub forum. Good luck to all those in that fight.