Will IT contractors be considered permanent employees after one month on site?

[pjt]

You, sir, are on the wrong drugs .



Firstly, it takes at least a month to get people up and running.
Secondly, in banking, or security roles, it takes 5 weeks, or so, just to get clearance.
Thirdly, look at the stupidity of the tax credits situation, i.e. Georgie can suggest what he likes, but, it won't come to pass.

This month suggestion is unworkable and will be kicked into touch by big business.

Ill ask, my question, again.
Please remember contract length has never had any bearing on IR35, before you answer.

Why, in your opinion, should people be IR35 caught after a month has elapsed?

As you are from Scotland, maybe, lobby the SNP about it

Your missing the point the fact projects take longer than a month has no bearing on the possible outcome. In effect HMRC have targeted us for more tax. Big business don't care if we are IR35 caught or not they only care about getting the resource that wont change for them nothing will change at all.

I certainly don't think we should be caught by IR35 automatically that doesn't mean its not going to happen. What in your eyes can we do about it other than moan among fellow contractors and maybe send a letter to our MP's? Apart from that its out of our hands.

And just because I'm from Scotland doesn't mean I have any desire to lobby the SNP. Never a party I've had any interest in voting for and I've always been happy to be a part of the UK. Though with the current outlook I'm starting to wonder if Independence may have actually worked out better for us!

[MrMarkyMark]

Answer: So they can raise millions doing next to nothing, more in tax with no appeals. Simples.... lazy legislation but deceptively simple to apply on the face of it. It really only affects the contractor so they probably think its would get little resistance in reality. Real affect would take longer to come in but agencies would need to do nothing with rates... its not their problem.

That's the why HMRC would do it, not why a contract should be IR35 caught after 1 month.

In any case, the actual HMRC proposal was move everyone on to ClientCos payroll after a month, not make people universally IR35 caught, after that time.

Though with the current outlook I'm starting to wonder if Independence may have actually worked out better for us!

Part of the reason, for my, slightly, tongue in cheek comment.

Big business don't care if we are IR35 caught or not they only care about getting the resource that wont change for them nothing will change at all.

They will do, when the resources just are not there.

[jamesbrown]

This will be trivial for government to implement, and will have no impact on clients or agencies, and will have no effect on the existence or extent of contracting, other than knock-on effects stemming from net-of-tax pay being considerably lower.

I am a bit mystified that only I can see this, and that every other contractor here seems to be pontificating about how impossible this is, or that it is the end of contracting as we know it.

All they have to do is add a criterion to the current IR35 legislation, that any time with a client after the first month counts as caught.

The bit about clients having to take people on payroll is I presume just journalists (or whoever is briefing them) being a bit clueless.

Putting aside the legislative issue (I'm afraid it isn't quite that simple a modification), I think you're entirely missing the point of the proposals. It's about increasing compliance, which is why they want engagers involved in enforcement. They don't want a bunch of PSCs, many of whom have never even heard of IR35, continuing to self-assess. They don't have the enforcement capability today, and that's only going to get worse (see the press today about further mass consolidation at HMRC).

[pjt]

Putting aside the legislative issue (I'm afraid it isn't quite that simple a modification), I think you're entirely missing the point of the proposals. It's about increasing compliance, which is why they want engagers involved in enforcement. They don't want a bunch of PSCs, many of whom have never even heard of IR35, continuing to self-assess. They don't have the enforcement capability today, and that's only going to get worse (see the press today about further mass consolidation at HMRC).

James it seems clear though that the details of the press release are unworkable for big business. But reading between the lines with the IR35 review etc and the press release it makes sense that the end result may be IR35 caught after 1 month.

Let me make it clear this would be a killer for me and lots of others I just don't see theirs much we can do. Its pretty clear IPSE are not going to be able to make much of a dent!

[MrMarkyMark]

But reading between the lines with the IR35 review etc and the press release it makes sense that the end result may be IR35 caught after 1 month.

It doesn't make any sense at all, IMO.

They won't be able amend the legislation in your suggested way easily, it is nothing close to the original IR35 law.

[LisaContractorUmbrella]

That's the why HMRC would do it, not why a contract should be IR35 caught after 1 month.

In any case, the actual HMRC proposal was move everyone on to ClientCos payroll after a month, not make people universally IR35 caught, after that time.



Part of the reason, for my, slightly, tongue in cheek comment.



They will do, when the resources just are not there.

HMRC's proposal????? No-one has seen any proposal from HMRC that even mentions any of this - it was a report in the media from an unconfirmed and unnamed 'source' at the Treasury

[pjt]

They won't be able amend the legislation in your suggested way easily, it is nothing close to the original IR35 law.

They can raise a consultation. We already know ones on the way. And it doesn't look as if we've been able to do much about the T&S consultation. If anything HMRC seem to be getting worse if this release has any merit.

[MrMarkyMark]

HMRC's proposal????? No-one has seen any proposal from HMRC that even mentions any of this - it was a report in the media from an unconfirmed and unnamed 'source' at the Treasury

Oops, indeed, poor choice of words.

[jamesbrown]

James it seems clear though that the details of the press release are unworkable for big business. But reading between the lines with the IR35 review etc and the press release it makes sense that the end result may be IR35 caught after 1 month.

Let me make it clear this would be a killer for me and lots of others I just don't see theirs much we can do. Its pretty clear IPSE are not going to be able to make much of a dent!

It depends what you mean by "IR35 caught". Whatever they do, I'd bet your house () that clients will need to enforce it, either by having contractors legally employed (i.e. no longer a contractor in fact) or of questionable status (i.e. no longer a contractor in practice; for example, SDC intended for tax status only would lead to employment claims).

As things stand, my best guess, reading between the lines of various sources, concurs with what Lisa pointed out elsewhere, i.e. the one month as a lower bound for a status check by the engager (eliminating some admin for them), rather than an upper bound beyond which everyone is definitively caught, but the engager will be at the heart of this. Anyway, at this point, we're largely in the dark and will need to wait.

[pjt]

It depends what you mean by "IR35 caught". Whatever they do, I'd bet your house () that clients will need to enforce it, either by having contractors legally employed (i.e. no longer a contractor in fact) or of questionable status (i.e. no longer a contractor in practice; for example, SDC intended for tax status only would lead to employment claims).

As things stand, my best guess, reading between the lines of various sources, concurs with what Lisa pointed out elsewhere, i.e. the one month as a lower bound for a status check by the engager (eliminating some admin for them), rather than an upper bound beyond which everyone is definitively caught, but the engager will be at the heart of this. Anyway, at this point, we're largely in the dark and will need to wait.

We will need to wait. Its going to be a long 2 weeks. But it does appear IR35 will be a lot move widespread come 2017 especially if the engager has to determine status.