Public sector IR35 consultation launched

[missinggreenfields]

I personally think there will be very little value in lone people speaking up. If only there was a group that could represent our concerns and lobby on our behalf ....

And that's how government can ignore the concerns. Because it's easy to say "we got very few responses, so there's no big deal out there".

Another interesting element is the effect this will have on the whole supply chain...agencies and accountants being two obvious ones. I bet they are equally as nervous about losing revenue and having to do more recording/collecting work for hmg.

They are.

[missinggreenfields]

The agencies reaction (I will need to find a link) is that they don't want anything to do with it. Being risk adverse and potentially being responsible for the tax owed their default answer is going to be inside - here's a nice umbrella you may as well use (thanks for the kickback)...

<optimist>or they will insist that the client accepts you are outside IR35 and will only deal with you on that basis</optimist>

Accountants will just have less customers to support as people move away... Being third party suppliers they can't do much bar accept the lost of potential customers..

Accountants have the potential advantage of being listened to when they talk about finances, numbers and complexity of administration though. They can't do much if it comes to pass, but they can put together an argument that shows why it will be expensive and fruitless.

[eek]

<optimist>or they will insist that the client accepts you are outside IR35 and will only deal with you on that basis</optimist>



Accountants have the potential advantage of being listened to when they talk about finances, numbers and complexity of administration though. They can't do much if it comes to pass, but they can put together an argument that

Given what the test is, who is the final arbitrator of the final decision and who would be made to pay the tax bill (one is private sector, one public) I think your optimism is terribly over optimistic.

As for accountants, the consultation states that implementation costs and impact are less than £1m a year. While we all know that's a bunch of tulips as various items are clearly missing from those costs - HMRC has been careful to ensure the projects that make up those costs are undefined. I can see them just going yep that's covered, so is that, as is that (regardless of whether they have been thought about or not).

[DotasScandal]

And that's how government can ignore the concerns. Because it's easy to say "we got very few responses, so there's no big deal out there".

In case HMRC actually get many responses, there's always this trick
Not only Gauke did get away with it, he got promoted.
"When everything else fails, you just lie".

[DotasScandal]

<delusional>or they will insist that the client accepts you are outside IR35 and will only deal with you on that basis</delusional>

FTFY

[BoredBloke]

If the risks are being handed to a third party then surely that third party will do what it can to mitigate them. So the end client or the agency will insist that the contractor is inside IR35. When working as self employed was clamped down on in the 70's, the agencies insisted on contractors working as PAYE or through their own limited company. Surely this will have the same effect. You as a contractor won't get the gig unless you sign up to a contract that is inside IR35 and pay the tax due. 1 less reason to be a contractor.

[nucastle]

One of my fellow contractors suggested that agencies will move towards putting you on their pay roll as a temp worker or what not, essentially acting as brollies.

I really cannot see agents going through that kind of hassle, given the employment laws. And what is the point in running a Ltd company at all in that case.

I'm guessing all the agent is going to do, is deem you inside IR35 either via pressure from Capita to ensure that, or of their own volition - and do the relevant deductions as everyone has assumed.

[eek]

One of my fellow contractors suggested that agencies will move towards putting you on their pay roll as a temp worker or what not, essentially acting as brollies.

I really cannot see agents going through that kind of hassle, given the employment laws. And what is the point in running a Ltd company at all in that case.

I'm guessing all the agent is going to do, is deem you inside IR35 either via pressure from Capita to ensure that, or of their own volition - and do the relevant deductions as everyone has assumed.

Not quite - they won't want to risk employment rights and the hassle involved with that so will just insist that you use one of their approved umbrella's....

Likewise they just won't want to deal with limited companies the hassle will literally be too great to begin with... May 2017 (as it kicks in for existing contracts) is going to be fun....

[nucastle]

Well that kicks away most of the pillars of positivity about the situation I'm hearing

I think there is a hope that agents will find a way around the situation, to mitigate the impact on the contractor so the chances of them upping sticks and leaving is reduced. I can't myself see any way out of this.

As an aside - would this not be an opportunity to change business practices away from the paradigm of single man Ltd companies - Would an LLP model or some other collective type arrangement where the contractors can act more like Solicitors / Accountants with a practice that the end client engages, with the agent acting more like a deal broker?

If this is going to be foisted on the private sector in time, would it not be worth thinking about these kind of arrangements now?

[DotasScandal]

As an aside - would this not be an opportunity to change business practices away from the paradigm of single man Ltd companies - Would an LLP model or some other collective type arrangement where the contractors can act more like Solicitors / Accountants with a practice that the end client engages, with the agent acting more like a deal broker?
If this is going to be foisted on the private sector in time, would it not be worth thinking about these kind of arrangements now?

You mean, contractors actually working with other contractors for mutual benefit, rather than stubbornly inisisting on "doing their own thing"?