The death of Public Sector contracting

[DotasScandal]

If the government is intent on pushing this onto the public sector client then there is a danger (likelihood?) that the client will either (a) force everyone inside IR35 because it's easier for them; or (b) engage consultancies (who may, in turn engage contractors). Both of these will increase the cost to the government and therefore the taxpayer.

(B) has always been the plan, and that's what we are gonna get. As you correctly observed, the cost go the TAXPAYER will be higher. But for politicians it will be kickbacks galore.

[dogzilla]

This is not a change to ir35 this is a change in public sector employment practices. Granted it's really just semantics to avoid being called out but that's one thing government departments are good at

Exactly. This is a weak effort to try and appear tough on PSC's, when in fact it's a basic mandate to government departments on the way in which they hire people.

Business as usual in my opinion, at least until HMRC actually start clamping down on people and stirring tulip up.

[DaveB]

As you were for the time being.


Nothing until 2017. Then a new test to be applied by agencies or clients to determine employment status, following consultation later this year.

Impact will depend on the nature of the tests but I suspect it's generic bum on seat permie-tractors who will have to worry the most.

If it's anything like the old Business Entity Tests most people will be able to find a way to pass.

[Yonmons]

As one door closes...another one opens

[Jessica@WhiteFieldTax]

Technical note on this

https://www.gov.uk/government/upload...FINAL_V3_0.pdf

Interesting that engager bears the cost of the Employers NI.

[DaveB]

Technical note on this

https://www.gov.uk/government/upload...FINAL_V3_0.pdf

Interesting that engager bears the cost of the Employers NI.

That could go both ways for us. One the one hand they wont want the cost of Employers NI and the overhead to administer PAYE, on the other the wont want the risk of HMRC deciding they got it wrong with the test outcome and penalising them for not paying it.

I can see some sort of indemnity clause coming in in new contracts to cover them for it if you are "outside".

[Yonmons]

No change to legislation, wasn't it? A lot can be done to make life difficult without a change to legislation.

Agreed, wait till you get a contract with the council and the council man waves his "please sign these " forms at you.

[LondonManc]

Public Sector should be simple to police.

Have whatever entity test they devise for the contract, score it, declare the contract inside or outside; this is then communicated clearly to the contractor/agent/accountant. The contractor then decides whether to take the contract or not.

[TheFaQQer]

Public Sector should be simple to police.

Have whatever entity test they devise for the contract, score it, declare the contract inside or outside; this is then communicated clearly to the contractor/agent/accountant. The contractor then decides whether to take the contract or not.

One minor drawback is finding someone who is in the know who can complete the test.

If the chain is me > myCo > agency > public sector body then the entity responsible for ensuring the test is accurate is the agency. So, you're now at the mercy of the agency knowing what the working practices are in order to decide whether they need to do anything or not. And they need to complete this test for every contractor engaged through them to the client.

Alternatively, the agency will say "can't be bothered to do this, you're inside" and you'll then have to decide whether you want the role or not (factoring in the loss of T&S expenses).

[LondonManc]

One minor drawback is finding someone who is in the know who can complete the test.

If the chain is me > myCo > agency > public sector body then the entity responsible for ensuring the test is accurate is the agency. So, you're now at the mercy of the agency knowing what the working practices are in order to decide whether they need to do anything or not. And they need to complete this test for every contractor engaged through them to the client.

Alternatively, the agency will say "can't be bothered to do this, you're inside" and you'll then have to decide whether you want the role or not (factoring in the loss of T&S expenses).

I'd imagine the Public Sector Body decide, in consultation with QDOS for example. They (PSB) shouldn't care whether the contract is actually inside or outside, but whether or not the contractor has that absolutely nailed on and confirmed.