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Tasslehoff
13th March 2016, 08:36
George Osborne to kill off 'Paxman' tax ploy that costs £400m | Daily Mail Online (http://www.dailymail.co.uk/news/article-3489705/Osborne-kill-Paxman-tax-ploy-costs-400m-Budget-tackle-books-dodge-used-civil-servants-media-stars.html)

Will this affect contractors?

eek
13th March 2016, 08:46
George Osborne to kill off 'Paxman' tax ploy that costs £400m | Daily Mail Online (http://www.dailymail.co.uk/news/article-3489705/Osborne-kill-Paxman-tax-ploy-costs-400m-Budget-tackle-books-dodge-used-civil-servants-media-stars.html)

Will this affect contractors?

Well it's the second time that story has appeared in the mail in 2 days so something is going to be announced.

Ironically they are still using the £3500 figure which was the figure used before the dividend tax came into place.

But the truth is that until we see the proposal on paper (and that may be a week or two after the budget, not on budget day itself) we won't know.

However, personally, it looks like a step in the right direction. Many will no doubt disagree with me and the devil is in the detail but companies should not be able to declare people off payroll as easily as they do currently.

centurian
13th March 2016, 08:52
Public sector contractors - of course - that who it's supposed to target.

What's not clear is whether the plan is designed to affect all 'employers' of contractors, or whether it is really a Treasury edict to all public sector organisations not to employ contractors unless paid PAYE, which doesn't need a change in employment law - you just tell public sector shops what to do.

But then, didn't they introduce an instruction to all departments to do that anyway a few years ago. Looks like most departments either ignored George, or implemented things half-heartedly which just allowed a load of workarounds.

So what's he gonna do this time to make it work as effectively as he intended last time around?

The only way to deal with this - is to have a blanket ban on anyone working through a LtdCo for the public sector while being a director or substantial shareholder, they must be paid PAYE. No exceptions whatsoever - instant firing and loss of pension for any hiring manager that breaks the rules. There will be some short term pain, but the public sector will adjust.

Fortunately politicians are institutionally incompetent, so he won't do that. He'll 'tighten' the rules and probably introduce a new questionnaire, which will have some impact, but places will find more workarounds etc.

Then 2 years from now, there will be another crackdown etc.

swamp
13th March 2016, 09:03
Many of the major government projects going on right now are being delivered by contractors. Without them these projects would just stall. I think the treasury will be aware of this.

This is just fishing for headlines.

eek
13th March 2016, 09:26
Many of the major government projects going on right now are being delivered by contractors. Without them these projects would just stall. I think the treasury will be aware of this.

This is just fishing for headlines.

No you are putting 2 and 2 together and coming up with 5.

No one high up knows or cares how projects get delivered. They have been told of a problem and senior management in policy have given them the solution and it's been signed it off. The fact it's utterly shafted senior management in delivery Is in many ways a bonus for them rather than a problem

ShandyDrinker
13th March 2016, 10:07
Many of the major government projects going on right now are being delivered by contractors. Without them these projects would just stall. I think the treasury will be aware of this.

This is just fishing for headlines.


No you are putting 2 and 2 together and coming up with 5.

No one high up knows or cares how projects get delivered. They have been told of a problem and senior management in policy have given them the solution and it's been signed it off. The fact it's utterly shafted senior management in delivery Is in many ways a bonus for them rather than a problem

I think you're both right in a way.

Although the vast majority of my work has been in the financial services sector over the last few years, I would be hard pushed to consider a public sector contract now unless the rate was pushed up to cover the additional tax which is unlikely to happen.

The irony of the headline grabbing is that while the Chancellor may get his larger tax take, a lot of contractors will probably avoid the public sector unless they can get the higher rates to cover the lost tax. The end result is that costs will rise for the public sector anyway so my gut feeling is that this is a zero-sum game.

eek
13th March 2016, 10:48
I think you're both right in a way.

Although the vast majority of my work has been in the financial services sector over the last few years, I would be hard pushed to consider a public sector contract now unless the rate was pushed up to cover the additional tax which is unlikely to happen.

The irony of the headline grabbing is that while the Chancellor may get his larger tax take, a lot of contractors will probably avoid the public sector unless they can get the higher rates to cover the lost tax. The end result is that costs will rise for the public sector anyway so my gut feeling is that this is a zero-sum game.

Costs have already risen for government sector dwp/ HMRC projects as there are limited contractors who will work in those tuliphole offices.

The last dwp development contract I saw was £500 a day (cheap for dwp who usually pay £750 or so to hpe, Ibm or Accenture but a lot more than the £400 contractors used to get for the same contract via hpe...)

BlasterBates
13th March 2016, 10:52
Under Mr Osborne’s plans, the onus will be on employers to determine whether their staff are full-time employees – rather than the temporary workers who were meant to be the beneficiary of the rule – and should therefore be put on the payroll.


If it goes through it will depend on clients to determine your IR35 status. It may be just restricted to the public sector. It looks to me like they'll add a time limit after which you have to go on the payroll.

bobspud
13th March 2016, 12:47
Many of the major government projects going on right now are being delivered by contractors. Without them these projects would just stall. I think the treasury will be aware of this.

This is just fishing for headlines.

^ This


No you are putting 2 and 2 together and coming up with 5.

No one high up knows or cares how projects get delivered. They have been told of a problem and senior management in policy have given them the solution and it's been signed it off. The fact it's utterly shafted senior management in delivery Is in many ways a bonus for them rather than a problem

^ Not this


If it goes through it will depend on clients to determine your IR35 status. It may be just restricted to the public sector. It looks to me like they'll add a time limit after which you have to go on the payroll.

Government departments already now how to differentiate between a IR35 caught and non IR35 caught resource and all of the contracts I have had working directly with the departments in question have been carefully defined by _them_ to make sure that there was no way of anyone being unaware of their tax liability.

Working on a specific single project with defined deliverables
Working on a professional day rate where its down to the supplier to fix problems at their cost
Right to substitute
Demands that you supply your own equipment...

I have even seen offers of huge fixed sum payments with milestones at monthly intervals... No mention of time or day rates :banana::banana::banana:

The government departments are not going to be the ones that get screwed over by a policy that is there to catch five people in several thousand. The departments jumped to the treasuries tune the last time and after it knackered them because the clever resources wandered off elsewhere, they quickly made sure that they caught on and learned.

SueEllen
13th March 2016, 12:57
If it goes through it will depend on clients to determine your IR35 status. It may be just restricted to the public sector. It looks to me like they'll add a time limit after which you have to go on the payroll.

They did that last time (or was it the time before) and it didn't work.

Like with private companies if a project needs doing now and they can't get a permanent hire then they hire a contractor for that specific project.

NickFitz
13th March 2016, 15:47
I wonder how many of the Mail's columnists work on a freelance basis through their own PSCs, and whether that also constitutes a "wheeze", as they put it?

I also wonder why the Mail feels entitled to take such a high moral tone about taxation when its profits in this country are routed through a company in Bermuda, thereby avoiding the irksome necessity of paying tax in the UK :eyes

eek
13th March 2016, 16:29
^ This



^ Not this



Government departments already now how to differentiate between a IR35 caught and non IR35 caught resource and all of the contracts I have had working directly with the departments in question have been carefully defined by _them_ to make sure that there was no way of anyone being unaware of their tax liability.

Working on a specific single project with defined deliverables
Working on a professional day rate where its down to the supplier to fix problems at their cost
Right to substitute
Demands that you supply your own equipment...

I have even seen offers of huge fixed sum payments with milestones at monthly intervals... No mention of time or day rates :banana::banana::banana:

The government departments are not going to be the ones that get screwed over by a policy that is there to catch five people in several thousand. The departments jumped to the treasuries tune the last time and after it knackered them because the clever resources wandered off elsewhere, they quickly made sure that they caught on and learned.

You have a lot more faith in government departments than I have.

bobspud
13th March 2016, 16:53
You have a lot more faith in government departments than I have.

If they wanted death for the legitimate contractor all they had to do was refuse to change the capita one contract and then come after all of the people on them. They didn't do that. instead they worked with the IPSec and got the contract amended to be more friendly to small suppliers.

I'm not saying everyone is safe just that the same people have always been under threat. If a contractor is sat doing tightly controlled work under supervision then they have always been inside ir35

AtW
13th March 2016, 17:23
Public sector contractors - of course - that who it's supposed to target.

What's not clear is whether the plan is designed to affect all 'employers' of contractors, or whether it is really a Treasury edict to all public sector organisations not to employ contractors unless paid PAYE, which doesn't need a change in employment law - you just tell public sector shops what to do.

Obviously he wants a wider net than just Paxman or public contractors.

swamp
13th March 2016, 18:17
At the moment you have to produce a contract review to operate outside IR35 in the public sector. My guess is after Wednesday certain positions, perhaps 'office holders' and the like, will no longer have this option. Existing Treasury fines of 5 times contract rate will still apply.

Departments will probably redefine their contract role definitions to fit the new rules. Remember this is purely a Treasury thing and nothing to do with HMRC.

SueEllen
13th March 2016, 18:39
At the moment you have to produce a contract review to operate outside IR35 in the public sector. My guess is after Wednesday certain positions, perhaps 'office holders' and the like, will no longer have this option. Existing Treasury fines of 5 times contract rate will still apply.

Departments will probably redefine their contract role definitions to fit the new rules. Remember this is purely a Treasury thing and nothing to do with HMRC.

Office holders and similar were forced on the payroll on 6th April 2013 after the Head of the Student Loans Company was splashed all over the media as avoiding tax.

No one on here could work out how he got away with it as it was clear his personal service was required. I knew/know two other people in similar situations before that and they had to be permanent to get their roles.

bobspud
13th March 2016, 18:56
Office holders and similar were forced on the payroll on 6th April 2013 after the Head of the Student Loans Company was splashed all over the media as avoiding tax.

No one on here could work out how he got away with it as it was clear his personal service was required. I knew/know two other people in similar situations before that and they had to be permanent to get their roles.

Actually I can name at least one that even Last year didn't think that office holder rules applied to them...

The original deal with Mr Leaster made some sort of sense he got a salary he wanted the department got their man for the job and it was cheaper for both parties.

It was only Danny wankbait alexander who had already been caught switching homes to EVADE tax that needed a scape goat...

SueEllen
13th March 2016, 19:17
I wonder how many of the Mail's columnists work on a freelance basis through their own PSCs, and whether that also constitutes a "wheeze", as they put it?

I also wonder why the Mail feels entitled to take such a high moral tone about taxation when its profits in this country are routed through a company in Bermuda, thereby avoiding the irksome necessity of paying tax in the UK :eyes

The Mail needs to strike fear and envy into middle England.

Traditionally it was read by the wives of Times and Telegraph readers e.g. the men doing all these tax avoidance activities.

AtW
13th March 2016, 19:21
Traditionally it was read by the wives of Times and Telegraph readers e.g. the men doing all these tax avoidance activities.

"Jim Hacker: The Daily Mirror is read by the people who think they run the country.

The Guardian is read by people who think they *ought* to run the country.

The Times is read by the people who actually *do* run the country.

The Daily Mail is read by the wives of the people who run the country.

The Financial Times is read by people who *own* the country.

The Morning Star is read by people who think the country ought to be run by *another* country.

The Daily Telegraph is read by the people who think it is.

Sir Humphrey: Prime Minister, what about the people who read The Sun?

Bernard Woolley: Sun readers don't care *who* runs the country - as long as she's got big tits. "

Classic...

BrilloPad
14th March 2016, 07:37
The Mail needs to strike fear and envy into middle England.

Traditionally it was read by the wives of Times and Telegraph readers e.g. the men doing all these tax avoidance activities.

Agreed. I will not believe it until I read it in the telegraph.

flamel
14th March 2016, 10:17
...... Danny wankbait alexander........

:rollin:

vetran
14th March 2016, 10:20
"Jim Hacker: The Daily Mirror is read by the people who think they run the country.

The Guardian is read by people who think they *ought* to run the country.

The Times is read by the people who actually *do* run the country.

The Daily Mail is read by the wives of the people who run the country.

The Financial Times is read by people who *own* the country.

The Morning Star is read by people who think the country ought to be run by *another* country.

The Daily Telegraph is read by the people who think it is.

Sir Humphrey: Prime Minister, what about the people who read The Sun?

Bernard Woolley: Sun readers don't care *who* runs the country - as long as she's got big tits. "

Classic...

AtW's education continues.

Now you need Allo Allo.

Dactylion
14th March 2016, 13:22
AtW's education continues.

Now you need Allo Allo.

Listen very carefully - I will say this only once.....

I see a flaw in your plan.

AtW
14th March 2016, 17:28
There seems to be some sort of problem with the photograph of Gideon in that article.

He doesn't seem to have "Twat" tattooed in big letters on his forehead.

Is this some form of censorship?

:mad

ChadGates
14th March 2016, 19:45
Agreed. I will not believe it until I read it in the telegraph.

it was on the front page of the telegraph yesterday. PSC loop hole to be closed for public sector contractors.
Sunday Herald in Scotland has been running a campaign on the same issue --Student Loans being run by a cabal of highly paid contractors being the focus of their ire

SueEllen
14th March 2016, 20:28
it was on the front page of the telegraph yesterday. PSC loop hole to be closed for public sector contractors.
Sunday Herald in Scotland has been running a campaign on the same issue --Student Loans being run by a cabal of highly paid contractors being the focus of their ire

They can't get permanent staff or people who want fixed term contracts so what are they going to do?

tomtomagain
14th March 2016, 21:14
They can't get permanent staff or people who want fixed term contracts so what are they going to do?

a) Increase the rates/salaries until they do get the people.

b) Quietly forget about the whole thing and carry on as before.

c) Put the whole lot out to tender and allow IBM, WIPRO, Infosys, Accenture to bid for a mere 2 - 3 times the current running cost.

SueEllen
14th March 2016, 21:17
a) Increase the rates/salaries until they do get the people.

b) Quietly forget about the whole thing and carry on as before.

c) Put the whole lot out to tender and allow IBM, WIPRO, Infosys, Accenture to bid for a mere 2 - 3 times the current running cost.

A mix of B and C with randomly trying A to prove no one who can do the job wants it.

Some government departments do this already but they use smaller consultancies.

bobspud
14th March 2016, 23:05
I explained what the suggested fix over IR35 is going to mean to one of my ex civil service colleagues over a beer this evening. Their response was: yeah I'm sure that's what they want, but their isn't anyone in the department that could competently make the decision. Any attempt would end up with a highly paid legal representative driving a bus over them.

They have already overruled the maximum payoff edict that was put out to stop long serving members of staff getting more than 95k in payouts. That too was noted to be a fail just waiting for the right legal team and not worth the court costs to lose :laugh so there is some common sense hidden in this mess

Sympatico
16th March 2016, 09:41
The government are not following the real money.
They should forget the minnows, and go after the sharks.

Get rid of agencies and have a single government recruitment agency.
They really could not be any worse than the existing ones.

Gov-Jobs then charges a flat rate that goes back into the public purse, credited against corporation tax.

Win win for government and contractors

Write to your MP now...

bobspud
16th March 2016, 09:52
The government are not following the real money.
They should forget the minnows, and go after the sharks.

Get rid of agencies and have a single government recruitment agency.
They really could not be any worse than the existing ones.

Gov-Jobs then charges a flat rate that goes back into the public purse, credited against corporation tax.

Win win for government and contractors

Write to your MP now...

and then the EU would complain that they we are being uncompetitive and shutting out european vendors from the money. Which is why Capita competed and won a single supplier solution for government contracts they operate on fixed margins and an open book. They had a little problem with the contract wordings at first but that was sorted out and as far as I understand they are back to being a contractor friendly way to work directly with the government while getting paid on time.

However like all these we will do this once and properly to save time and cost: I worked through other contracts with other suppliers that had nothing to do with Capita so as with all these you will use X for Y edicts, there is always an entire department thats says yeah what-ever and does the total opposite...

We do need to sort out the NHS agency abuse and Capita's model would be a good start for that as its not fair that Nurses are getting vilified for working as agency staff when its the agencies stealing all the cash. Its a mostly different game in the IT sector though.

flamel
16th March 2016, 12:28
The answer lies in the article with the completely wrong explanation that income tax is being avoided as you only have to pay 20% corporation tax. The Mail seems to employ children to write their articles. In the comments the teenagers seem to think its a way to avoid national insurance. What the adults know is the real reason, it avoids adding to the massive unsustainable pension liabilities that all public sector workers are entitled too.

...but these articles are placed there by the Government through their PR agencies - be realistic, there's no way that a Daily Mail journo knows anything about tax, companies .... or anything come to that.

mudskipper
16th March 2016, 12:33
...but these articles are placed there by the Government through their PR agencies - be realistic, there's no way that a Daily Mail journo knows anything about tax, companies .... or anything come to that.

Except house prices. :)

NigelJK
16th March 2016, 14:06
sponsored by RightMove

SueEllen
16th March 2016, 15:52
Sorry, go back and read the article. The person that wrote the article was absolutely clueless.

The people who write articles have to spin them out of the small bit of information they get from a government "source" e.g. someone they met out drinking, the twitter feed they follow, so they are always a load of rubbish.

flamel
16th March 2016, 16:52
Sorry, go back and read the article. The person that wrote the article was absolutely clueless.

As I was saying, the articles are put there by the Government.....

Unless someone is inferring that they have more of a brain than they're letting on.

SueEllen
16th March 2016, 18:31
As I was saying, the articles are put there by the Government.....

Unless someone is inferring that they have more of a brain than they're letting on.

Journalist just happens to be in the pub frequented by civil service types.

S/he over hears them talking about the budget. As they aren't suppose to be talking shop in a public place they start making things up.

Journalist thinks s/he has a story so writes an article on what s/he has over heard.