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missinggreenfields
27th July 2016, 16:31
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
27th July 2016, 16:37
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
27th July 2016, 16:50
<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
27th July 2016, 16:53
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 (https://www.dotas-scandal.org/gauke-performs-magic-trick-transforms-847-responses-into-20-and-lies-to-parliament-in-the-process/)
Not only Gauke did get away with it, he got promoted.
"When everything else fails, you just lie".

DotasScandal
27th July 2016, 16:57
<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
28th July 2016, 09:47
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
28th July 2016, 09:52
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
28th July 2016, 09:57
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
28th July 2016, 10:07
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
28th July 2016, 10:12
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"?

:laugh:laugh:laugh:laugh:laugh:laugh:laugh:laugh:l augh:laugh

nucastle
28th July 2016, 10:15
Yeah good point. :laugh

eek
28th July 2016, 10:18
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?

Yep, I'm really cheerful regarding this aren't I... The problem with partnerships in any form are:

1) that they have been open to abuse in the past so HMRC don't like them...
2) how do you form a partnership of people that you actually trust and want to work with long term
3) the rules are fairly clear cut, if you are only providing Labour you are caught - to avoid this you definitely need to be providing things beyond just your skills....

We will need to see what schemes S3 group and the other big agency chains come up with but it will take time for them to create schemes that work (if they ever do) so a gap would be a very good idea...

nucastle
28th July 2016, 10:23
Yep, I'm really cheerful regarding this aren't I... The problem with partnerships in any form are:

1) that they have been open to abuse in the past so HMRC don't like them...
2) how do you form a partnership of people that you actually trust and want to work with long term
3) the rules are fairly clear cut, if you are only providing Labour you are caught - to avoid this you definitely need to be providing things beyond just your skills....

We will need to see what schemes S3 group and the other big agency chains come up with but it will take time for them to create schemes that work (if they ever do) so a gap would be a very good idea...

Isn't that what solicitors or lawyers are providing though - their own expertise and labour? Or any consultancy for that matter.

I look at it in the same way as setting up a design or development shop, but with an arrangement that suits sporadic projects where you don't need premises and the like.

Obviously the trust aspect is the kicker. It would only suit established contractors with a decent network. Which unfortunately knacks anyone who is just starting out.

eek
28th July 2016, 10:26
Isn't that what solicitors or lawyers are providing though - their own expertise and labour? Or any consultancy for that matter.

I look at it in the same way as setting up a design or development shop, but with an arrangement that suits sporadic projects where you don't need premises and the like.

Obviously the trust aspect is the kicker. It would only suit established contractors with a decent network. Which unfortunately knacks anyone who is just starting out.

So how do you become a design / development shop when you are dependent on agencies finding you work that comes in 3-6 month chunks...

That is a big change in how you work that requires moving from people finding you to do the work (agencies) to you directly seeking out that work...

nucastle
28th July 2016, 10:50
So how do you become a design / development shop when you are dependent on agencies finding you work that comes in 3-6 month chunks...

That is a big change in how you work that requires moving from people finding you to do the work (agencies) to you directly seeking out that work...

Fair enough. Probably requires more thought.

Anyways, back on point - we're doomed!

Hobosapien
28th July 2016, 10:59
Besides, if several contractors are working through the same entity it gets messy when some are on the bench unless they agree how the profits will be shared fairly. Annual bonuses instead of the usual share based divis?

I know a group of people that left a company, set up their own ltd, went back contracting at oldco while trying to sort out other revenue streams, and it ended badly with only one of them still contracting and bringing in all the dosh and the other 3 sat in the office each day struggling to find other regular revenue streams of high value.

Felt sorry for the one lad that in effect carried the others for quite a few months before they all gave it up.

Also cost them their friendships in the fall out.

So any workable alternatives to one man band independent contractors may be a long time coming if it doesn't already exist.

eek
28th July 2016, 10:59
Fair enough. Probably requires more thought.

Anyways, back on point - we're doomed!

The actual point is that it is doable - but it does require a lot of thought and hard work - which would have to be done in the evenings or when not in contract...

DaveB
28th July 2016, 11:03
The actual point is that it is doable - but it does require a lot of thought....

Further complicated by procurement rules that effectively exclude us from bidding directly for work and force us to go via agencies on a PSL.

youngguy
28th July 2016, 11:15
IR35 and umbrella here we come :(

Old Greg
29th July 2016, 14:05
The actual point is that it is doable - but it does require a lot of thought and hard work - which would have to be done in the evenings or when not in contract...

Not read all of this....

One answer may be to set up a company (BigCo) owned jointly by several One man band Ltds (MyCo's). If I win a contract all the money goes via BigCo to MyCo, and we share annual costs.

Look to get on a procurement framework.



I'm not in the UK anymore but I'm doing my bit. Recent email exchange:


Thanks Pimp. Unfortunately I don't work within the TDA caps.

Best of luck filling the role.

OG

...

Hello OG
I am currently recruiting for Project Manager with an NHS client based in Ilford.
Initially the contract will last for 6 months. Day rates will be in line with the TDA caps.
The job itself will revolve around Single sign solution, and Clinical/IT system change.
The candidate will ideally come from an IT background and preferably have NHS experience.

If interested or want more details on the role, then feel free to call me at the office on xxxxxx.

Pimp

northernladuk
29th July 2016, 14:12
Not read all of this....

One answer may be to set up a company (BigCo) owned jointly by several One man band Ltds (MyCo's). If I win a contract all the money goes via BigCo to MyCo, and we share annual costs.

Look to get on a procurement framework.


Doesn't one of the examples in the consultation document put that one to bed though? The one with the supplier with 10 people on site. Each needs assessing individually so doesn't avoid anything?

eek
29th July 2016, 14:46
Doesn't one of the examples in the consultation document put that one to bed though? The one with the supplier with 10 people on site. Each needs assessing individually so doesn't avoid anything?

Yep - it's why I look at the idea that the consultancies are going to get the work and think really - not sure.

Now crapita and serco may well pick up a bit of it but most of the consultancies aren't interested in taking over business as usual work and that's a lot of what these jobs are

webberg
29th July 2016, 14:47
Not wishing to stifle debate here but whilst it may be the case that some of the ideas here are in the consultation paper (for good or bad) there may be some that are not and where there might be ways to frustrate the flawed purpose of the proposal?

If so, would it not make sense to debate these out of the gaze of HMRC?

We have a part of our forum which could be used. It's called Taxtopics and we use it for tax issues. However I think we could turn it over to this issue for a while.

I cannot guarantee it's secure from HMRC but we do run some rudimentary checks.

It costs nothing to join but we do retain your username and email details.

It will also help us as we are due to attend one of the physical meetings (13th September) and whilst we have ideas and thoughts, there is always room to take on board some more and perhaps to know which areas to avoid.

Anyway - your choice. It's available if you want it.

webberg
29th July 2016, 15:07
Link

TaxTopics for Contractors & Advisers (http://www.taxtopics.co.uk/)

Please ignore the "this month's topic header" which I will get changed soon.

barrydidit
30th July 2016, 09:54
Yep - it's why I look at the idea that the consultancies are going to get the work and think really - not sure.

Now crapita and serco may well pick up a bit of it but most of the consultancies aren't interested in taking over business as usual work and that's a lot of what these jobs are

Interesting e-mail from a rejected pimp yesterday afternoon


Thanks for your time on the phone earlier, it was very good to speak with you. Thanks for also raising the point regarding the PAYE payment method at HMRC. This is something that I have raised and fortunately, this should not be an issue as this role is actually working for a consultancy called [snip] Services and they then place people on site with HMRC (and also DWP) and currently have about 100 consultants working on site but actually employed by [snip] Services. This will allow HMRC a loophole to continue hiring strong contractors with limited companies, such as yourself.


Ignoring the 'employed' faux pas, it seems the agency industry is generally unaware of the situation. This one verbally told me he thought there was a bit of scaremongering going on. A previous discussion re an HMRC role foundered on the same point (and was paying 20% more due to fewer fingers in the pie).

Just thought i'd post this now it's actually starting to have an impact.

cojak
30th July 2016, 11:56
Not wishing to stifle debate here but whilst it may be the case that some of the ideas here are in the consultation paper (for good or bad) there may be some that are not and where there might be ways to frustrate the flawed purpose of the proposal?

If so, would it not make sense to debate these out of the gaze of HMRC?

We have a part of our forum which could be used. It's called Taxtopics and we use it for tax issues. However I think we could turn it over to this issue for a while.

I cannot guarantee it's secure from HMRC but we do run some rudimentary checks.

It costs nothing to join but we do retain your username and email details.

It will also help us as we are due to attend one of the physical meetings (13th September) and whilst we have ideas and thoughts, there is always room to take on board some more and perhaps to know which areas to avoid.

Anyway - your choice. It's available if you want it.

HMRC individuals are tax payers too, how are you going to keep them out of your forum?

We're talking more than tax here. Take care, webberg...

jamesbrown
2nd August 2016, 21:36
http://www.telegraph.co.uk/news/2016/08/02/nhs-chief-on-record-60000-a-month-as-numbers-off-payroll-soar/

SueEllen
3rd August 2016, 07:11
http://www.telegraph.co.uk/news/2016/08/02/nhs-chief-on-record-60000-a-month-as-numbers-off-payroll-soar/

All public sector renumeration higher than what the PM earns has to go to the Chief Secretary to the Treasury for approval.

In other words the Treasury approved the high rate...

youngguy
3rd August 2016, 07:35
Nice to see some figures (other than Gov's citing of alleged saving) and echoes what most I have spoken to have said about leaving the PS or upping rates. £115m deficit rather than £400m gain!

Hobosapien
3rd August 2016, 10:07
Nice article but it doesn't cover the probable fact that the consultancies will get an exemption notice from the new rules, so can get either their own cheap bodies in to fill the void, or get contractors in to do the work so the consultancies get the current agency margin plus their additional consultancy fee.

20,000 PS contractors sounds a lot to be looking for other opportunities if the article proves anywhere near right. Private sector rates about to drop for non specialist roles that continue to be in demand. :eyes

DotasScandal
3rd August 2016, 10:10
20,000 PS contractors sounds a lot to be looking for other opportunities if the article proves anywhere near right. Private sector rates about to drop for non specialist roles that continue to be in demand. :eyes

"He who has an ear, let him hear". He who panics first panics best.

An avalance of unintended consequences is coming.

youngguy
3rd August 2016, 10:24
Nice article but it doesn't cover the probable fact that the consultancies will get an exemption notice from the new rules

Is this your view or based on specific information?

I ask as the way I read the consultation doc is ANY PSC has to pay tax etc, and the closest body collects it. So a contractor working/subbing to a consultancy would pay and the consultancy would act as the immediate agency and collect the tax.

The only way I can see that not being the case is if the contractor took a perm role with said consultancy.

Hobosapien
3rd August 2016, 10:44
Is this your view or based on specific information?

I ask as the way I read the consultation doc is ANY PSC has to pay tax etc, and the closest body collects it. So a contractor working/subbing to a consultancy would pay and the consultancy would act as the immediate agency and collect the tax.

The only way I can see that not being the case is if the contractor took a perm role with said consultancy.


Uneducated guess based on the hunch consultancies have more lobbying power with those making the rules, so if they can't fill the void through cheap imported labour they may want concession on the rules to fill their pockets while bringing in the necessary resource through other avenues.

MrMarkyMark
3rd August 2016, 11:09
Uneducated guess based on the hunch consultancies have more lobbying power with those making the rules, so if they can't fill the void through cheap imported labour they may want concession on the rules to fill their pockets while bringing in the necessary resource through other avenues.

You only have to look back and see that PWC pretty much came up with IR35...

eek
3rd August 2016, 19:31
You only have to look back and see that PWC pretty much came up with IR35...

Consultancies would prefer skilled contractors as staff rather than as contractors. I wouldn't expect many consultancies not to play ball with this scheme and to try and force decent contractors into permanent employment.

youngguy
3rd August 2016, 20:43
Consultancies would prefer skilled contractors as staff rather than as contractors. I wouldn't expect many consultancies not to play ball with this scheme and to try and force decent contractors into permanent employment.

Grads from uni....sure. Not sure they will be as successful getting experienced contractors on their payroll. Half of us left that world because we saw the rates they charged compared to our salaries and were sick of the sales targets.

eek
4th August 2016, 08:53
Grads from uni....sure. Not sure they will be as successful getting experienced contractors on their payroll. Half of us left that world because we saw the rates they charged compared to our salaries and were sick of the sales targets.

But when you do public sector work and it's that or nothing?

DotasScandal
4th August 2016, 09:02
But when you do public sector work and it's that or nothing?
Then embrace change.
It's never "that or nothing".

youngguy
4th August 2016, 11:08
But when you do public sector work and it's that or nothing?

True. I would *hope* contractors stand fast....but if it's the difference between earning £0 on the bench and earning their old rate - 30%, then you can see what options they will choose.

I think quality of candidate could well go down, as those that have other options in the private sector will move.

Of course if you believe (like I do) that this is the first step to taxing ALL contractors like permies then it may only buy us a few yrs at most.

malvolio
4th August 2016, 11:43
True. I would *hope* contractors stand fast....but if it's the difference between earning £0 on the bench and earning their old rate - 30%, then you can see what options they will choose.

I think quality of candidate could well go down, as those that have other options in the private sector will move.

Of course if you believe (like I do) that this is the first step to taxing ALL contractors like permies then it may only buy us a few yrs at most.
Actually its the first step in taxing contractors who can't clearly demonstrate they are operating as independent businesses that will be caught. Another reason for concentrating on your terms of engagement. And, incidentally, for breaking the agency stranglehold on freelance recruitment.

youngguy
4th August 2016, 12:58
Actually its the first step in taxing contractors who can't clearly demonstrate they are operating as independent businesses that will be caught. Another reason for concentrating on your terms of engagement. And, incidentally, for breaking the agency stranglehold on freelance recruitment.

Are you sure about that? I don't see that in the consultation doc personally.

Unless you are in a framework (impossible as a solo contractor ) I don't see any examples that allow contractors to demonstrate what you cite...happy for you to point me to the detail though.

malvolio
4th August 2016, 13:05
Are you sure about that? I don't see that in the consultation doc personally.

Unless you are in a framework (impossible as a solo contractor ) I don't see any examples that allow contractors to demonstrate what you cite...happy for you to point me to the detail though.
HMG have always been very clear that they are not after businesses, only disguised employees. So all you have to do is operate as a business and prove that you are doing so.

So, how do you go about doing that...? It's not easy, but if you don't like the alternative, then what choices do you have?

gables
4th August 2016, 13:40
HMG have always been very clear that they are not after businesses, only disguised employees. So all you have to do is operate as a business and prove that you are doing so.

So, how do you go about doing that...? It's not easy, but if you don't like the alternative, then what choices do you have?

Interesting you put it like that, but the HMRC tests (SDC) seem particularly narrow to me and don't determine whether you're a business vs 'disguised employee' <- hate that term.

Surely, if HMRC considered all the activities (accountant, insurances, paye\vat\ct returns, paying for our own training\skills development...) and employee benefits and activities (holidays, sickness, flexi, 1:1, job planning...) that we don't get\participate in from the client you're at, then the conclusion is that we're not employees disguised or otherwise.

Or am I missing something?

jamesbrown
4th August 2016, 14:02
HMG have always been very clear that they are not after businesses, only disguised employees. So all you have to do is operate as a business and prove that you are doing so.

So, how do you go about doing that...? It's not easy, but if you don't like the alternative, then what choices do you have?

I generally agree, but you need to bear in mind that HMRC are being driven by (or willfully using) very dubious statistics w/r to 90% non-compliance. If that's their starting point then, by definition, their view of what distinguishes a legitimate business from disguised employment is entirely different from our view or, more importantly, the legislation that they're using to make that distinction. This is precisely why they're attempting to circumvent the legislation. They have an outcome in mind, more than a process.

westtester
4th August 2016, 14:18
HMG have always been very clear that they are not after businesses, only disguised employees. So all you have to do is operate as a business and prove that you are doing so.

So, how do you go about doing that...? It's not easy, but if you don't like the alternative, then what choices do you have?

Well, one method would be to submit your working practices and contract to someone like QDos for review, who can then present a written confirmation of your business operating status. Unfortunately, at the MoD at least, this method of proving the way you operate is no longer acceptable as evidence.

Everyone has their own interpretation of what being a business means. It's persuading HMRC that's the problem. As IR35 to date has been unable to provide a simple in or out answer to this question, it seems that rather than providing rules which can be easily interpreted, it's easier for them to force everyone inside regardless of any other considerations.

DotasScandal
4th August 2016, 14:51
As IR35 to date has been unable to provide a simple in or out answer to this question, it seems that rather than providing rules which can be easily interpreted, it's easier for them to force everyone inside regardless of any other considerations.

HMRC: "We now need policies to fix our past policies which were the result of other policies". Lather rinse repeat.

youngguy
4th August 2016, 15:08
HMG have always been very clear that they are not after businesses, only disguised employees. So all you have to do is operate as a business and prove that you are doing so.

So, how do you go about doing that...? It's not easy, but if you don't like the alternative, then what choices do you have?

That depends on the definition of business. HMGs new definition doesn't appear to leave much room for a sole director now does it?

As I said, the consultation doc does not see what most of us currently are as businesses .

I think you not answering my Q actually does answer it......there is no Model for the majority of us going forward .

LondonManc
4th August 2016, 15:12
HMRC: "We now need policies to fix our past policies which were the result of other policies". Lather rinse repeat.

Surely it's better to, with scrapping IR35 in mind, establish what they ACTUALLY want to achieve and talk to the likes of IPSE in terms of how it affects limited company contractors.

What are the drivers? Things like too many big clientco's avoiding employer NICs for permietractors (pts), too many pts not behaving like businesses while paying business tax rates rather than inside IR35 rates.

If you want to use limited co route, as said earlier, demonstrate that you're a limited company.
If you want to use an umbrella, then you get forced down the full PAYE route BUT you still get the two year rule on the expenses, but only when staying away/travelling a significant distance - no lunches, daily commute under, say 50, miles, etc.

There's as much a market for pts as there is for genuine contractors and the tax structures should reflect that, rather than any ridiculous tests. It should simply be umbrella for pts and limited co for contractors.

jamesbrown
4th August 2016, 15:20
It's persuading HMRC that's the problem.

It's part of the problem but, ultimately, the courts decide how to apply legislation, not HMRC. Again, these recent changes are about circumventing legislation (narrowing definitions, avoiding court decisions), not about improving enforcement.

youngguy
4th August 2016, 15:23
Interesting you put it like that, but the HMRC tests (SDC) seem particularly narrow to me and don't determine whether you're a business vs 'disguised employee' <- hate that term.

Surely, if HMRC considered all the activities (accountant, insurances, paye\vat\ct returns, paying for our own training\skills development...) and employee benefits and activities (holidays, sickness, flexi, 1:1, job planning...) that we don't get\participate in from the client you're at, then the conclusion is that we're not employees disguised or otherwise.

Or am I missing something?

Exactly.

I have to do marketing , my own development and training. I have legal responsibilities as a Director. I set prices, negotiate terms and prices, do book keeping, pay professionals for parts, I run the risk of no work,I run the risk of being sent home today and my contract terminated.

I don't get any employee rights.

So why am I a disguised employee? That's rhetorical ....because what Malv slightly misses is the fact that HMG DO want to get more tax and contractors are an easy way of doing that. This has nothing to do with being a legitimate business . It is about HMG redefining that term to suit themselves .

malvolio
4th August 2016, 15:24
That depends on the definition of business. HMGs new definition doesn't appear to leave much room for a sole director now does it?

As I said, the consultation doc does not see what most of us currently are as businesses .

I think you not answering my Q actually does answer it......there is no Model for the majority of us going forward .There is, but persuading HMRC and HMG of that s the hard part. That work has been on-going for a while and will continue. It is being pressed very hard right now in the light of this biased and ignorant consultation.

As for us mere observers, 200,000 letters to our MPs might make them take notice, don't you think?

youngguy
4th August 2016, 15:32
There is, but persuading HMRC and HMG of that s the hard part. That work has been on-going for a while and will continue. It is being pressed very hard right now in the light of this biased and ignorant consultation.

As for us mere observers, 200,000 letters to our MPs might make them take notice, don't you think?

I appreciate you are in the inner magic circle and so see all this (allegedly), but I can only go on the consultation doc and I see no model for a solo contractor post April for the PS and (in my view) in any sector in a few years.

youngguy
4th August 2016, 15:35
Surely it's better to, with scrapping IR35 in mind, establish what they ACTUALLY want to achieve and talk to the likes of IPSE in terms of how it affects limited company contractors.

What are the drivers? Things like too many big clientco's avoiding employer NICs for permietractors (pts), too many pts not behaving like businesses while paying business tax rates rather than inside IR35 rates.

If you want to use limited co route, as said earlier, demonstrate that you're a limited company.
If you want to use an umbrella, then you get forced down the full PAYE route BUT you still get the two year rule on the expenses, but only when staying away/travelling a significant distance - no lunches, daily commute under, say 50, miles, etc.

There's as much a market for pts as there is for genuine contractors and the tax structures should reflect that, rather than any ridiculous tests. It should simply be umbrella for pts and limited co for contractors.

Yes! Just have more models. There should also be another rule for business with a certain turnover (say, £3m). How can it be right that I paid more tax than Fbook last yr!

malvolio
4th August 2016, 16:04
I appreciate you are in the inner magic circle and so see all this (allegedly), but I can only go on the consultation doc and I see no model for a solo contractor post April for the PS and (in my view) in any sector in a few years.I'm not in any inner circle. I just pay attention. I certainly don't base my views on HMRC's publications.

youngguy
4th August 2016, 16:18
I'm not in any inner circle. I just pay attention. I certainly don't base my views on HMRC's publications.

What about your 'friends in high places' 'sharp end' 'behind closed doors' IPSE rhetoric?? :)

Given HMRC are enforcing the rules and have confirmed their intention, it's a bit short-sighted to pay no attention to the documentation.

I will gladly thank you if you can point me to the publications I have not been paying attention to which show me a solo contractor model.

LondonManc
4th August 2016, 16:27
Yes! Just have more models. There should also be another rule for business with a certain turnover (say, £3m). How can it be right that I paid more tax than Fbook last yr!

I'd just think that models are better than tests.

Pick the appropriate model, prove that it fits how you operate and get on with it.

teapot418
4th August 2016, 16:33
I think the best thing we can all do is respond to the consultation with the following arguments

1) The whole premise is flawed - the Alexander report showed that 90% of gov depts were compliant with the requirements to ensure that off payroll workers are paying the correct tax. If there is 90% non-compliance, why are HMRC not winning 90% of IR35 investigations?

2) The reaction will be 'risk adverse' - there will be a blanket 'everybody caught' rule. Evidence for this is already here - the MoD insisting that everyone is caught is a reaction to being one of the departments fined from the Alexander review. HMRC's own research doc confirms that the reaction will either be to put everyone inside, or give the work to consultancies.

3) Given the above, there will be a big impact on the availability of flexible resources. Again, this is expressed in the research. We are already seeing contractors turning down PS contracts because of the uncertainty.

4) This will cost the public sector - they will be paying consultancies a multiple of the rate of a 'PSC' for the same worker. Where's this extra money going to come from?

5) Talking about 'fairness' - how is it fair that someone who pays employee taxes will not get employee benefits?

I'm sure there's more, but it's home time :)

youngguy
4th August 2016, 17:00
I think the best thing we can all do is respond to the consultation with the following arguments

1) The whole premise is flawed - the Alexander report showed that 90% of gov depts were compliant with the requirements to ensure that off payroll workers are paying the correct tax. If there is 90% non-compliance, why are HMRC not winning 90% of IR35 investigations?

2) The reaction will be 'risk adverse' - there will be a blanket 'everybody caught' rule. Evidence for this is already here - the MoD insisting that everyone is caught is a reaction to being one of the departments fined from the Alexander review. HMRC's own research doc confirms that the reaction will either be to put everyone inside, or give the work to consultancies.

3) Given the above, there will be a big impact on the availability of flexible resources. Again, this is expressed in the research. We are already seeing contractors turning down PS contracts because of the uncertainty.

4) This will cost the public sector - they will be paying consultancies a multiple of the rate of a 'PSC' for the same worker. Where's this extra money going to come from?

5) Talking about 'fairness' - how is it fair that someone who pays employee taxes will not get employee benefits?

I'm sure there's more, but it's home time :)

Just my tuppence:-
1 and 2 lost already .

3,4,5 should be the focus. More figures, more stats. Media like that, the register picked up the contractor calculator £115m extra cost.

Also, in a yr if I work in the public sector as a PSC I get taxed as an employee ....if I do the same in private sector I am taxed as a Ltd. How is that fair and equal?

Nb: I am aware my last point could lead to the creep to the private sector. The HMRC divide and conquer is quite clever. Private contractors don't care about the changes right now. A yr or two down the line PS contractors won't care when the scope increases as they will see it as 'fair' by then given the tax they've been paying.

malvolio
4th August 2016, 18:06
What about your 'friends in high places' 'sharp end' 'behind closed doors' IPSE rhetoric?? :)

Given HMRC are enforcing the rules and have confirmed their intention, it's a bit short-sighted to pay no attention to the documentation.

I will gladly thank you if you can point me to the publications I have not been paying attention to which show me a solo contractor model.
I'm not doing your research for you, it would take too long. My rates, however, are quite reasonable... :wink

For the last time I have no privileged access to anything and haven't for a few years now. Gaining that access is very simple, it just takes a little willingness to join in the fight. I've not said anything that isn't in the public domain somewhere (in fact, I never have, if you were paying attention) but one source should be immediately obvious.

And you are still apparently missing the point that HMRC's documentation on this has been written from their perspective that everyone is a disguised employee by people who are stuck in the world of steelworks and coal-fired engineering companies in Birmingham. As we all know, that is not even remotely the case

youngguy
4th August 2016, 22:40
I'm not doing your research for you, it would take too long. My rates, however, are quite reasonable... :wink

For the last time I have no privileged access to anything and haven't for a few years now. Gaining that access is very simple, it just takes a little willingness to join in the fight. I've not said anything that isn't in the public domain somewhere (in fact, I never have, if you were paying attention) but one source should be immediately obvious.

And you are still apparently missing the point that HMRC's documentation on this has been written from their perspective that everyone is a disguised employee by people who are stuck in the world of steelworks and coal-fired engineering companies in Birmingham. As we all know, that is not even remotely the case

Oh dear .....you do talk twaddle!

You have made statements and when I ask you cannot back them up. (I won't waste time in the professional forum digging out your quotes about this).

That Sir, speaks volumes.

You are missing the point. HMRCs view is not correct...but that doesn't matter. They have been clear about what they want and their point of view. You seem to think logic and justice will prevail.....

malvolio
5th August 2016, 06:51
Oh dear .....you do talk twaddle!

You have made statements and when I ask you cannot back them up. (I won't waste time in the professional forum digging out your quotes about this).

That Sir, speaks volumes.

You are missing the point. HMRCs view is not correct...but that doesn't matter. They have been clear about what they want and their point of view. You seem to think logic and justice will prevail.....
OK, fine, that's your opinion. It's not mine, nor a lot of other people's. HMRC's view won't change unless someone persuades their masters that they are wrong. There are a lot of major players trying to do that right now.

There is also something slightly off in asking for answers to questions, getting informed answers, then challenging them because you don't like them and CBA to find out for yourself. But hey, let's leave it there, shall we.

youngguy
5th August 2016, 07:19
....There are a lot of major players trying to do that right now.

There is also something slightly off in asking for answers to questions, getting informed answers, then challenging them because you don't like them and CBA to find out for yourself. But hey, let's leave it there, shall we.

Again - you mention major players but don't cite them.

You mention a working model but don't say where it is.

You mention big talks behind closed doors and have no evidence to share....wink wink

You say you have an informed answer but won't share where the information is...

You then say I can't be bothered to find out. I tell you to point me to it and suddenly you have nothing but childish comments.

Yes let's leave it there....this is increasingly like listening to some crazy old guy with a monologue sat on his own in a pub, rather than sharing of information and discussion.

nucastle
5th August 2016, 08:20
Does any of all that even matter thought? Back office discussions and murmurings aside, HMRC have confirmed the changes going ahead and will make their online calculator available in the Autumn.

The only people with any clout in this whole debacle will be the IT service providers who will be rubbing their hands with glee about the increased revenue. Who is actually going to dip in and save this before April next year?

As far as we know it's a done deal.

eek
5th August 2016, 08:24
I'm just regarding it as a test on how good or not IPSE actually are when it comes to lobbying...

teapot418
5th August 2016, 08:42
I'm just regarding it as a test on how good or not IPSE actually are when it comes to lobbying...

They're getting the chance to make their case at the highest levels

https://www.ipse.co.uk/news/ipse-deliver-6-point-plan-brexit-success-prime-minister

LondonManc
5th August 2016, 08:54
OK, fine, that's your opinion. It's not mine, nor a lot of other people's. HMRC's view won't change unless someone persuades their masters that they are wrong. There are a lot of major players trying to do that right now.

There is also something slightly off in asking for answers to questions, getting informed answers, then challenging them because you don't like them and CBA to find out for yourself. But hey, let's leave it there, shall we.

The problem is that many managers are empire builders. You simplify the process and you no longer need an emperor....

youngguy
5th August 2016, 09:26
They're getting the chance to make their case at the highest levels

https://www.ipse.co.uk/news/ipse-deliver-6-point-plan-brexit-success-prime-minister

Let's hope their plans for taxation are not anything like their FLC idea!

DotasScandal
5th August 2016, 09:32
The HMRC divide and conquer is quite clever. Private contractors don't care about the changes right now

Clever? It's the same methods they've been using for decades. Simply playing the selfishness and short-sightedness of contractors (which is not in short supply).
"First they came for PS contractors, and I said nothing, cause I was not a PS contractor"... etc etc.
Boiled frogs also come to mind.

missinggreenfields
5th August 2016, 09:37
Again - you mention major players but don't cite them.

REC, CBI, IPSE, FSB, plus accountancy bodies as well will be engaging with HMRC at the moment and responding to the consultation.

HTH :)

malvolio
5th August 2016, 10:17
Let's hope their plans for taxation are not anything like their FLC idea!
See. You have been paying attention. :happy

If our normal business model is going to be totally f***ed, then the FLC is a possible way forward since it relies on you operating as a business and so avoids all this pseudo-IR35 nonsense. But I'm not going to get back into that argument again.

MrMarkyMark
5th August 2016, 10:50
See. You have been paying attention. :happy

If our normal business model is going to be totally f***ed, then the FLC is a possible way forward since it relies on you operating as a business and so avoids all this pseudo-IR35 nonsense. But I'm not going to get back into that argument again.

By coming up with the Freelance LTD Co idea, I would suggest this is IPSE rolling over.
Sorry, terrible idea IMO.

gables
5th August 2016, 10:57
By coming up with the Freelance LTD Co idea, I would suggest this is IPSE rolling over.
Sorry, terrible idea IMO.

What was the tax regime proposed with the FLC? I've thought a structure that was taxed like a sole trader (I am a sole trader after all) but provides protection against the problems for clients that stops us operating as sole trader might be an option.

MrMarkyMark
5th August 2016, 11:01
What was the tax regime proposed with the FLC? I've thought a structure that was taxed like a sole trader (I am a sole trader after all) but provides protection against the problems for clients that stops us operating as sole trader might be an option.

Gables, I cant recall TBH, I believe it's posted on here somewhere :)

gables
5th August 2016, 11:03
Gables, I cant recall TBH, I believe it's posted on here somewhere :)

Fair dos, I was being lazy :smile

eek
5th August 2016, 11:08
What was the tax regime proposed with the FLC? I've thought a structure that was taxed like a sole trader (I am a sole trader after all) but provides protection against the problems for clients that stops us operating as sole trader might be an option.

Nope that would now sense there was restrictions on how much could be extracted, pay was via paye and I really can't remember the rest as I gave up on about page 2 - due to its utter insanity

malvolio
5th August 2016, 11:16
Nope that would now sense there was restrictions on how much could be extracted, pay was via paye and I really can't remember the rest as I gave up on about page - due to its utter insanity
the intention was to provide a vehicle that was guaranteed clear of IR35 (and hence the current plans for PS payment) lying somewhere between permie and Ltd Co in terms of returns and providing assurance on status to both sides, if you qualify to use one. I've no idea where it is now, or even if it is still up for discussion. However, it is one - and only one - possible way forward.

Perhaps we should be looking at it as a sane pre-emptive strike... :tongue

TheFaQQer
5th August 2016, 11:24
What was the tax regime proposed with the FLC? I've thought a structure that was taxed like a sole trader (I am a sole trader after all) but provides protection against the problems for clients that stops us operating as sole trader might be an option.

The published paper did not propose a tax regime, because it was a discussion paper for HMT to consider the options.

TheFaQQer
5th August 2016, 11:27
Nope that would now sense there was restrictions on how much could be extracted, pay was via paye and I really can't remember the rest as I gave up on about page 2 - due to its utter insanity

Maybe you should have read more, then. There was no restriction on how much could be extracted, save for a suggestion that a low level of capital should be retained by the business. There was no requirement to pay everything via PAYE.

The section on tax treatment begins on page 8, but if you can't be bothered to read the document, then you can't really be expected to understand what was being proposed.

youngguy
5th August 2016, 12:43
REC, CBI, IPSE, FSB, plus accountancy bodies as well will be engaging with HMRC at the moment and responding to the consultation.

HTH :)

Thanks, I was more referring to the Malv comments where he makes out something specific is happening but has no proof of the detail.

youngguy
5th August 2016, 12:45
See. You have been paying attention. :happy

If our normal business model is going to be totally f***ed, then the FLC is a possible way forward since it relies on you operating as a business and so avoids all this pseudo-IR35 nonsense. But I'm not going to get back into that argument again.

If this is a suggestion/inference/ guess that ipse's proposals to Gov are FLC again then we really are all doomed!

IPSE should have learnt how little support their idea had the first time .

youngguy
5th August 2016, 12:49
the intention was to provide a vehicle that was guaranteed clear of IR35 (and hence the current plans for PS payment) lying somewhere between permie and Ltd Co in terms of returns and providing assurance on status to both sides, if you qualify to use one. I've no idea where it is now, or even if it is still up for discussion. However, it is one - and only one - possible way forward.

Perhaps we should be looking at it as a sane pre-emptive strike... :tongue

I think the idea COULD have worked if the terms were somewhere in the middle. And from memory they weren't .

No one wants to pay more tax but there are things which could be a bit fairer all round. Eg reduce the 2 yr expenses rule to 1. Ensure real business expenses (pension, accountancy etc etc) are always valid.

I could go on but there is little point as Gov don't want a fair system, they want Gov depts to collect tax for them from what they consider an easy tax pool.

malvolio
5th August 2016, 13:09
If this is a suggestion/inference/ guess that ipse's proposals to Gov are FLC again then we really are all doomed!

IPSE should have learnt how little support their idea had the first time .
Oh yes, when surveyed a mere 30% or so of the membership were opposed to it...

And no, it's not guesswork, it is informed opinion. It may well be wrong, but I don't think it is. Happy for that to be disproved, preferably by someone much closer to the middle than I am.

DotasScandal
5th August 2016, 13:55
I could go on but there is little point as Gov don't want a fair system, they want Gov depts to collect tax for them from what they consider an easy tax pool.

Amen

missinggreenfields
5th August 2016, 14:08
IPSE should have learnt how little support their idea had the first time .

About 75% of the members supported the idea, I think.

pr1
5th August 2016, 14:10
Oh yes, when surveyed a mere 30% or so of the membership who responded to the survey were opposed to it...

FTFY, probably

missinggreenfields
5th August 2016, 14:12
No one wants to pay more tax but there are things which could be a bit fairer all round. Eg reduce the 2 yr expenses rule to 1. Ensure real business expenses (pension, accountancy etc etc) are always valid.

What makes a reduction to one year fairer than two? The projects that I work on tend to run for years and years, so two years is very unfair to me because of the nature of the work that I do. One year would be even more unfair, and would result in projects that aren't in areas where there are lots of people with the right skills but take longer than a year either having to change resources after a relatively short time, or expecting someone to pick up the costs of that.


I could go on but there is little point as Gov don't want a fair system, they want Gov depts to collect tax for them from what they consider an easy tax pool.

On that point, we do agree though.

pr1
5th August 2016, 14:15
What makes a reduction to one year fairer than two? The projects that I work on tend to run for years and years, so two years is very unfair to me because of the nature of the work that I do. One year would be even more unfair, and would result in projects that aren't in areas where there are lots of people with the right skills but take longer than a year either having to change resources after a relatively short time, or expecting someone to pick up the costs of that.
.

if you're on a multi year project then you could factor it into your rate, or take the hit on expenses knowing you've got a relatively secure income stream

malvolio
5th August 2016, 14:20
FTFY, probably
It was around 1,500 as I recall; certainly enough to be statistically significant. Around 75% were in favour.

missinggreenfields
5th August 2016, 14:20
if you're on a multi year project then you could factor it into your rate, or take the hit on expenses knowing you've got a relatively secure income stream

:rollin:

youngguy
5th August 2016, 14:26
About 75% of the members supported the idea, I think.

Members who voted sure - and to be fair that is all IPSE can do.

But it did come at a time when most of the contingent here questioned IPSE in terms of who they were representing and the feeling here was it was not well thought out. I stand corrected though....the feedback here is not the same as the member feedback which it seems was more in favour .

jamesbrown
5th August 2016, 14:27
If this is a suggestion/inference/ guess that ipse's proposals to Gov are FLC again then we really are all doomed!

IPSE should have learnt how little support their idea had the first time .

Folks, we need some balance here. Regardless of what prejudices you may have about IPSE, based on perceived successes or failures in the past or opinions about certain individuals that may or may not represent them, there's very little mileage in forming a circular firing squad here. We need to face outwards and support whatever lobbying efforts may help to mitigate the damage. I'm not incredibly optimistic, but there's a reasonable chance that policy makers (not HMRC) fail to understand the implications of what is being proposed, because they don't understand the problem, either structurally (what it means to be a contractor, distinct from a temp) or fiscally (i.e. reliance on HMRC estimates that are woefully and demonstrably nonsensical, such as 90% non-compliance). You also need to bear in mind that IPSE is a member organization, and a significant majority of members were supportive of ideas like the FLC (I was not, for reasons I've identified many times before), and this is symptomatic of a wider problem. I'd guess that a majority of contractors know almost feck all about tax or legislation. CUK isn't representative (in a good way), and we have a fair number of muppets around here. :D This is why so many have landed themselves in trouble, historically. Perhaps a little less fighting in a sack?

youngguy
5th August 2016, 14:28
Oh yes, when surveyed a mere 30% or so of the membership were opposed to it...
.

Fair, I can't argue with that ;)

youngguy
5th August 2016, 14:41
What makes a reduction to one year fairer than two?

I don't think it is fairer....but I do think Gov see us as a privileged group/ easy target and they are not going to let this go. At this point I think it is about the best possible deal, not the deal we all want/ feel is fair.

So the Q is where is the happy medium that doesn't cripple real Ltd businesses but appeases the view that Gov have about us having unfair tax advantages.

As others have said the div tax has clawed some tax back.

Another way may be to tighten the expenses rule. This brings in more tax , encourages depts to think about their temporary resource and provides a negotiation point at 12 months. A contractor can take the hit or up rates. A dept can accept or reject based on performance.

Another way would be a tiered Ltd tax model based on income.... That helps tackle the Starbucks issues and sets truly small businesses apart from the larger ones. It means more tax but protects important things such as pension contributions.

northernladuk
5th August 2016, 14:57
So the Q is where is the happy medium that doesn't cripple real Ltd businesses but appeases the view that Gov have about us having unfair tax advantages.


IPSE could chuck the BAU/Servidedesk types under a bus and see if HMRC will leave the rest of us alone for a bit?

Hobosapien
5th August 2016, 16:03
IPSE could chuck the BAU/Servidedesk types under a bus and see if HMRC will leave the rest of us alone for a bit?


Or sell HMRC insurance for every failed investigation they attempt.

missinggreenfields
5th August 2016, 16:04
I don't think it is fairer....but I do think Gov see us as a privileged group/ easy target and they are not going to let this go. At this point I think it is about the best possible deal, not the deal we all want/ feel is fair.

So the Q is where is the happy medium that doesn't cripple real Ltd businesses but appeases the view that Gov have about us having unfair tax advantages.

As others have said the div tax has clawed some tax back.

Another way may be to tighten the expenses rule. This brings in more tax , encourages depts to think about their temporary resource and provides a negotiation point at 12 months. A contractor can take the hit or up rates. A dept can accept or reject based on performance.

Another way would be a tiered Ltd tax model based on income.... That helps tackle the Starbucks issues and sets truly small businesses apart from the larger ones. It means more tax but protects important things such as pension contributions.

So, you think that there should be a separate taxation and expenses regime for "us" and "real Ltd businesses". How do you differentiate between the two camps? Is it based on number of employees (thereby hitting pubs, corner shops, small businesses), number of employees and SIC code (in which case you need to have a list of approved industries and occupations, which someone has to maintain and is easy for HMRC to tweak to their advantage)? Is it based on whether the company is predominantly in the supply of labour (but then you hit lots of other "real" businesses as well)?

Tightening the expenses rule is one way to add complexity to an already complex taxation system, but any government could do that. But it comes back to how do you identify whether the "real business" rules apply, and when do the "not real" rules apply - and if there was a simple way to do that then HMRC would have done something years ago.

A turnover tax is one thing that could happen, but it doesn't make a great deal of sense. As Duncan Bannatyne kept saying on Dragon's Den, turnover is nothing, profit is everything. Look at the turnover of (for example) a large umbrella company, and see what the profit margin is - if you change to a turnover tax then that could well be the end of low-margin businesses. Just because a "PSC" that is in IT makes whacking great margins and might be able to suck up a turnover tax, that doesn't mean that other freelance roles can do the same.

But at the end of the day, if you think that there should be separate taxation and expenses rules applied, is that not the same kind of thing as a Limited Company for Freelancers (let's call it an LCF)?

missinggreenfields
5th August 2016, 16:08
IPSE could chuck the BAU/Servidedesk types under a bus and see if HMRC will leave the rest of us alone for a bit?

First they came for the BAU contractors, but I said nothing etc.

I suspect that HMRC would love that to happen - because they get a whole load of people caught (no idea what percentage of contractors meet your rules), and they also see that nobody is going to fight their proposals so they can do what they want.

And saying to the membership "we don't want these guys, but to make up for that we're going to double your fees" is probably not going to indear the IPSE to the membership much.

MrMarkyMark
5th August 2016, 16:22
IPSE could chuck the BAU/Servidedesk types under a bus and see if HMRC will leave the rest of us alone for a bit?

True, but they would love the divide and conquer victory to be so easily had :(

northernladuk
5th August 2016, 16:25
And saying to the membership "we don't want these guys, but to make up for that we're going to double your fees" is probably not going to indear the IPSE to the membership much.

Bearing in mind we voted for brexit and Trump you never know. Would be interesting to see though wouldn't it?You could ask if they really should be supporting 1st line service desk and pure BAU 'contractors' at all to be fair. Representing anyone that pays membership isn't the best model.

Just being a bit glib really but maybe a topic for discussion.

MrMarkyMark
5th August 2016, 16:29
Bearing in mind we voted for brexit and Trump you never know. Would be interesting to see though wouldn't it?You could ask if they really should be supporting 1st line service desk and pure BAU 'contractors' at all to be fair. Representing anyone that pays membership isn't the best model.

Just being a bit glib really but maybe a topic for discussion.

Not really, its all worth discussion.
They are going for low hanging fruit already by going for the PS, if it works they will attempt to move on to the private sector.

missinggreenfields
5th August 2016, 16:32
Bearing in mind we voted for brexit and Trump you never know. Would be interesting to see though wouldn't it?You could ask if they really should be supporting 1st line service desk and pure BAU 'contractors' at all to be fair. Representing anyone that pays membership isn't the best model.

Just being a bit glib really but maybe a topic for discussion.

Assuming you're a member, why don't you ask whether they should be supporting contractors that don't meet your standards of what a contractor is?

I can't see it making business sense to ditch a load of members, and I don't think throwing a large group of people under the bus will do anything other than say to HMRC "you do what you want".

As an alternative to chucking "the BAU/Servidedesk types under a bus", it would be much easier to chuck everyone working in the public sector under the bus instead and say to HMRC "please leave the rest of us alone" - it's a much easier demographic to pick as a starter.

teapot418
5th August 2016, 16:36
You're going to need a big old bus.

http://static.ibsrv.net/autocomm/Content/FTE/Sept11/black-stallion15.jpg

northernladuk
5th August 2016, 17:00
Assuming you're a member, why don't you ask whether they should be supporting contractors that don't meet your standards of what a contractor is?

A bod sitting on a 1st line is a contractor? Really???


I can't see it making business sense to ditch a load of members, and I don't think throwing a large group of people under the bus will do anything other than say to HMRC "you do what you want".

Again. Depends if those members really are what you are trying to defend. And I don't think it will say that to them at all. It maybe admitting the LTD model is being abused so a slight recorrection is in order.

Most don't see themselves as members either I'll bet. They are in it for the insurances. I wonder what would the lie of the land would be if it was £200 for the benefits and another £50 for membership.



As an alternative to chucking "the BAU/Servidedesk types under a bus", it would be much easier to chuck everyone working in the public sector under the bus instead and say to HMRC "please leave the rest of us alone" - it's a much easier demographic to pick as a starter.

That's completely different. We are contractors so will just get a gig out of the PS. Nothing has been achieved. Focus should be in the 'contractor' not the role.

malvolio
5th August 2016, 18:05
A bod sitting on a 1st line is a contractor? Really???


Again. Depends if those members really are what you are trying to defend. And I don't think it will say that to them at all. It maybe admitting the LTD model is being abused so a slight recorrection is in order.

Most don't see themselves as members either I'll bet. They are in it for the insurances. I wonder what would the lie of the land would be if it was £200 for the benefits and another £50 for membership.



That's completely different. We are contractors so will just get a gig out of the PS. Nothing has been achieved. Focus should be in the 'contractor' not the role.
Say what you like, IPSE will defend its members in line with their fairly deep research into what their members want and how its members (and by inference the rest of the contractor/freelance workforce) think they should be able to work. It doesn't matter why they join, if they have joined they are going to be represented. And that £250 membership fee delivers around £1000 a year in invisible benefits that may come in handy one day - and already have in many cases.

Also IPSE is not an autonomous unrepresentative quango of some sort, it is owned by its members and its policies are determined by contractors, nobody else. I don't think any of them are looking to commit commercial suicide by not pursuing the best interests of IPSE's membership.

youngguy
5th August 2016, 18:12
So, you think that there should be a separate taxation and expenses regime for "us" and "real Ltd businesses". How do you differentiate between the two camps?
...
But at the end of the day, if you think that there should be separate taxation and expenses rules applied, is that not the same kind of thing as a Limited Company for Freelancers (let's call it an LCF)?

I think there are possibly a number of camps:-
Permitractor
LCF (your term may catch on!)
Ltd (your plumber or whatever who is not a sole trader)
SME
Big globals etc

I don't pretend to have all (or any) of the answers but I do think that the risk profile and 'benefits' of each is different, and so I can see an argument for different rules .Maybe a differentiator is number of individual clients per year? The difficulty is finding something which is simple but not a blanket one size fits all when our engagement model is clearly not the same as a one man builder, a small consultancy or a Facebook.

Profit might be a good indicator for LCF,but it clearly is not for Starbucks et al who allegedly have never made a profit in the UK due to how they structure themselves. That is clearly wrong.

Someone else may say a permitractor sat at the same desk for 5 years deserves no expenses and they are clearly wrong.

As I mentioned elsewhere ,I think an FLC /LCF COULD work depending on the details .

missinggreenfields
5th August 2016, 18:33
A bod sitting on a 1st line is a contractor? Really???

Let's look at two things. Firstly, are they inside IR35 or not. Are they subject to supervision, direction and control? Are they obliged to accept work and the client is obliged to offer it to them? Are they lacking a right of substitution? If the answer to all three of those is "yes" then they are inside IR35. If the answer to any one of those is no then they are outside IR35.

Secondly, even if a contractor is inside IR35 (and I've accepted inside IR35 roles which aren't in support or BAU), can they still be described as a "contractor"?

So - if someone is outside IR35 but doing a role in first line support, why would they not be classed as a contractor, apart from on the NLUK definition? If someone is inside IR35 and not doing a 1st line role, does that mean that they aren't a contractor? And if someone is inside IR35 and doing a 1st line support role, does that mean that they aren't a contractor?

I'm sorry that there are some people who don't meet your definition of what a contractor is and what doesn't, but that doesn't mean that IPSE (or anyone) should be saying to HMRC "take this guy, don't come after me please".


Again. Depends if those members really are what you are trying to defend. And I don't think it will say that to them at all. It maybe admitting the LTD model is being abused so a slight recorrection is in order.

If you don't think HMRC would welcome the prospect of an industry lobby group sacrificing their members, then I think you're deluding yourself. It won't make you safe - it'll weaken any influence you had, and will mean that your demise will come quicker.


Most don't see themselves as members either I'll bet. They are in it for the insurances. I wonder what would the lie of the land would be if it was £200 for the benefits and another £50 for membership.

It might be interesting. It might be very different from what you think. However, tilting at windmills will get you nowhere.


That's completely different. We are contractors so will just get a gig out of the PS. Nothing has been achieved. Focus should be in the 'contractor' not the role.

No, it's the same stupid idea - pick a group of people who aren't me, and throw them to the wolves to protect my business.

SueEllen
5th August 2016, 19:04
I think there are possibly a number of camps:-
Permitractor
LCF (your term may catch on!)
Ltd (your plumber or whatever who is not a sole trader)
SME
Big globals etc

I don't pretend to have all (or any) of the answers but I do think that the risk profile and 'benefits' of each is different, and so I can see an argument for different rules .Maybe a differentiator is number of individual clients per year?


Bad idea.

For example in year 1, I have 1 client with 4 distinct projects but the in year 2 I have 4 different clients with 4 different projects.Then in year 3 I have 2 clients where one client takes up 90% of my time but the other client takes up the 10%. So according to your rule I'm only a contractor in year 2 and maybe year 3.

northernladuk
5th August 2016, 19:10
Say what you like, IPSE will defend its members in line with their fairly deep research into what their members want and how its members (and by inference the rest of the contractor/freelance workforce) think they should be able to work. It doesn't matter why they join, if they have joined they are going to be represented. And that £250 membership fee delivers around £1000 a year in invisible benefits that may come in handy one day - and already have in many cases.

Also IPSE is not an autonomous unrepresentative quango of some sort, it is owned by its members and its policies are determined by contractors, nobody else. I don't think any of them are looking to commit commercial suicide by not pursuing the best interests of IPSE's membership.

I get all that. I'm probably the worst type to get into these discussions. I'm not close enough or political enough to understand these organisations yet throw the odd bombs in from time to time that probably frustrate the serious lot.

I just struggle with comments around the deep researching to what it's members want and then say anyone can be a member and it's worthwhile purely on a financial basis. Surely that means they are going have to defend everyone against everything. Surely a narrower focus which would result in most people doing it properly winning (or not changing) with a bit of collateral damage be better than no one winning at all?

As I say I probably don't understand and am possibly doing more harm than good so I'll drop it here.

youngguy
5th August 2016, 19:25
Bad idea.

For example in year 1, I have 1 client with 4 distinct projects but the in year 2 I have 4 different clients with 4 different projects.Then in year 3 I have 2 clients where one client takes up 90% of my time but the other client takes up the 10%. So according to your rule I'm only a contractor in year 2 and maybe year 3.

Not necessarily that you are not a contractor, but maybe the end of yr taxation falls under different rules. Much like IR35, you can be in sometimes and then out. Of the perceived risk is lower maybe the tax (and employee benefits?!) Is higher.....

Its a bit of spitballing, point is I am increasingly wondering however whether there is a one size fits all and Gov are not going to accept the status quo.

jamesbrown
5th August 2016, 20:12
can they still be described as a "contractor"?

It's really quite simple IMO. There are two groups of contractors. One group comprises exploited workers that would prefer to become employees of their end clients (whether temporary or permanent, but with employment benefits and protections). The other group comprises contractors that have explicitly decided that permanent employment is not for them, for a whole multitude of possible reasons. Let's not become too snobby about what constitutes a "legitimate" contractor.

This discussion is really about tax and different perceptions about who is more deserving of a particular tax treatment. In my view, that's the wrong way to look at it. It isn't for us to decide how the tax system should introduce incentives or disincentives for particular ways of working. We can make a case about the flexible workforce, and the chips can fall where they may. But what we should expect is a framework that is based on evidence, rather than made-up numbers, and one that is consistent. You can't (in fairness) propose to classify someone as both a disguised employee and an employer for tax purposes and a contractor/self-employed worker for employment law purposes.

This is one reason that I don't have a massive problem with dividend taxation, if I'm really honest about it (obviously, no one likes to pay more tax :laugh). There's nothing inconsistent about it (there are many forms of "double" taxation, and this isn't a particularly egregious example) and it doesn't involve subjective decisions about who might be a "legitimate contractor" versus a "tax-avoiding, scumbag, disguised employee".

northernladuk
5th August 2016, 20:14
Let's look at two things. Firstly, are they inside IR35 or not.

I stopped here. I'm not getting in to a ridiculous argument about 1st line being a small company selling specialist services to clients. Some roles are temporary roles to fill gaps at a client. I. E. Temps. I can't be arsed arguing the technicalities of it but if we can't recognised the differences between temps and specialised resource we'll win nothing.


I'm sorry that there are some people who don't meet your definition of what a contractor is and what doesn't, but that doesn't mean that IPSE (or anyone) should be saying to HMRC "take this guy, don't come after me please".


I quite agree. I made a pretty generic, slightly tongue in cheek swipe so absolutely there will be people that don't fit the definition.



If you don't think HMRC would welcome the prospect of an industry lobby group sacrificing their members, then I think you're deluding yourself. It won't make you safe - it'll weaken any influence you had, and will mean that your demise will come quicker.

We will have to beg to differ here because I completely disagree. Far too hard to discuss any of this but a tight focus group will be a lot harder to argue against than a catchall.



No, it's the same stupid idea - pick a group of people who aren't me, and throw them to the wolves to protect my business.

Not at all. How does the client we deliver to have any impact in how we deliver. They are after us as a group not the clients we work for. It's nothing to do with me. It's who is a small business delivering specialist skills to clients and who is a disguised permie.

It might have been an abrasive suggestion but I don't see any problem with putting out there. I don't see too many other suggestions being put forward however ridiculous or outlandish.

Far too hard to get all my thoughts together on here to make a full and reasoned argument so on this point I'm also done.

SueEllen
5th August 2016, 20:16
Not necessarily that you are not a contractor, but maybe the end of yr taxation falls under different rules. Much like IR35, you can be in sometimes and then out. Of the perceived risk is lower maybe the tax (and employee benefits?!) Is higher.....


You are presuming my company year end and my personal year end are the same.

They aren't on purpose so I can spread my final bookkeeping and checking over the year.

Finally every now and then my company hires someone or subcontracts work out.*

How would all this fit into your simple model?

To do such a model HMRC would have to rip up the tax book and redefine how freelancers work particularly with agencies and others plus get better at chasing taxes.

*This was one of the main reasons why I was against IPSEs "freelancer limited company".

SueEllen
5th August 2016, 20:24
You can't (in fairness) propose to classify someone as both a disguised employee and an employer for tax purposes and a contractor/self-employed worker for employment law purposes.


This is my big bugbear and why I hope the cases against Uber et al win.

youngguy
5th August 2016, 21:55
You are presuming my company year end and my personal year end are the same.

They aren't on purpose so I can spread my final bookkeeping and checking over the year.

Finally every now and then my company hires someone or subcontracts work out.*

How would all this fit into your simple model?

To do such a model HMRC would have to rip up the tax book and redefine how freelancers work particularly with agencies and others plus get better at chasing taxes.

*This was one of the main reasons why I was against IPSEs "freelancer limited company".

I assure you my 'model' is little more than some early spitballing!

I'm just trying to illustrate that the Gov view of tax us like employees but with no rights is the worst of everything.

There may be mileage is trying to work out different tiers for different models as one model isn't going to be fair to all.

Much easier said than done of course :)

SueEllen
6th August 2016, 07:27
I assure you my 'model' is little more than some early spitballing!

I'm just trying to illustrate that the Gov view of tax us like employees but with no rights is the worst of everything.

There may be mileage is trying to work out different tiers for different models as one model isn't going to be fair to all.

Much easier said than done of course :)

See my post above yours.

youngguy
11th August 2016, 16:39
First official response out : covers 38k members apparently http://www.fcsa.org.uk/hmrcs-planned-reforms-of-the-intermediaries-legislation-in-the-public-sector-will-not-provide-silver-bullet-says-fcsa-in-its-official-response-to-the-consultation/

youngguy
11th August 2016, 16:45
Official response to the consultation http://www.fcsa.org.uk/hmrcs-planned-reforms-of-the-intermediaries-legislation-in-the-public-sector-will-not-provide-silver-bullet-says-fcsa-in-its-official-response-to-the-consultation/

LondonManc
11th August 2016, 17:10
First official response out : covers 38k members apparently HMRC’s planned reforms of the intermediaries legislation in the public sector will not provide silver bullet says FCSA in its official response to the consultation (http://www.fcsa.org.uk/hmrcs-planned-reforms-of-the-intermediaries-legislation-in-the-public-sector-will-not-provide-silver-bullet-says-fcsa-in-its-official-response-to-the-consultation/)

Good. At least they proposed an alternative rather than just poo-pooing the proposal. There's nothing worse than a poo-pooing.

youngguy
11th August 2016, 17:25
Haven't read in detail yet but it seems to have picked up a lot of the main concerns . Whether Gov will take any notice is another matter...

LondonManc
11th August 2016, 18:24
Haven't read in detail yet but it seems to have picked up a lot of the main concerns . Whether Gov will take any notice is another matter...

It's more the point that rather than simply criticising it, they've offered an alternative.

westtester
12th August 2016, 10:53
I'm hoping that a boycott of public sector contract opportunities will drive home the argument that this whole approach by HMRC is folly. But I wonder how many of us will actually do it?

MrMarkyMark
12th August 2016, 10:57
FTFY

I'm hoping that a boycott of public sector contract opportunities will drive home the argument that this whole approach by HMRC is folly. But I wonder how many of us will actually be able to afford to do it?

Ketto
12th August 2016, 11:15
Turned down an extension through to the end of March at my current PS client solely because of this, start new private sector gig on Wednesday. None of the other guys here have a clue what is coming or seem overly interested when I have mentioned it. Will be interesting to see how it all pans out (from the sidelines thankfully!). The plan has more holes in it than Jeremy Corbyn's economic strategy.

nucastle
12th August 2016, 13:18
I've told the managers at work earlier this week, I wont be extending, and told them exactly why.

So, I've done my bit - Come October first can you spare a brother a dime.

The only way this is going to work is by people actually upping and leaving, although the people with the balls to do that, risking time on the bench and instability, are few in number.

westtester
12th August 2016, 14:26
Maybe when those who are staying realise that their incomes are going to take a hit, they might think again. They'll either have to go down the brolly route or start saving for a big deemed payment.

jamesbrown
12th August 2016, 14:52
Maybe when those who are staying realise that their incomes are going to take a hit, they might think again. They'll either have to go down the brolly route or start saving for a big deemed payment.

No saving necessary, as the deemed payment will be operated through RTI. In many cases, there will be an overpayment. For the same reason, there are going to be some shocked PS permietractors this time next year. Only then will people start walking (those leaving now are the smart ones).

eek
14th August 2016, 13:27
I get all that. I'm probably the worst type to get into these discussions. I'm not close enough or political enough to understand these organisations yet throw the odd bombs in from time to time that probably frustrate the serious lot.

I just struggle with comments around the deep researching to what it's members want and then say anyone can be a member and it's worthwhile purely on a financial basis. Surely that means they are going have to defend everyone against everything. Surely a narrower focus which would result in most people doing it properly winning (or not changing) with a bit of collateral damage be better than no one winning at all?

As I say I probably don't understand and am possibly doing more harm than good so I'll drop it here.

Sorry to return to this bit from last week I really was away and not spending much time online.

I think the above sums up my entire problem with the IPSE. I've continually argued that we (sadly) will need to throw some people over the side to protect the more skilled contractor. And to be honest if you are doing first line support as a contractor exactly who is getting the better side of that deal - I can safely say its not really the contractor.

It's whyI much prefer to talk to the unions at least you know what they are fighting for and why.. And with Deliveroo, uber, yodel and all the other companies at the moment trying to force things towards "fake" self employment to fit their business model you can see why momentum is supposedly heading against us...

malvolio
14th August 2016, 17:07
Sorry to return to this bit from last week I really was away and not spending much time online.

I think the above sums up my entire problem with the IPSE. I've continually argued that we (sadly) will need to throw some people over the side to protect the more skilled contractor. And to be honest if you are doing first line support as a contractor exactly who is getting the better side of that deal - I can safely say its not really the contractor.

It's whyI much prefer to talk to the unions at least you know what they are fighting for and why.. And with Deliveroo, uber, yodel and all the other companies at the moment trying to force things towards "fake" self employment to fit their business model you can see why momentum is supposedly heading against us...
Really don't understand lobbying, do you? Nor will you listen when it's explained by the people doing it. But hey, if it makes you happy...

Anyway IPSE have always supported the cause workers who are being forced into pseudo self-employment, since that undermines their whole argument about the difference between company owning chambermaids, BBC presenters and "self-employed" social workers and us genuine freelance contractors. On that basis, there's nobody to throw overboard. And, to challenge your other assertion from the viewpoint of someone whose been delivering IT to businesses for around 40 years, first line support is the face of the IT department and the coding world and the rest of the hyper-technical experts are actually supporting them in delivering the IT service. Nobody is any more or less important than anyone else, nor more or less deserving of support.

Finally you might like to reflect that all unions have as their stated aim the provision of equal employment rights for all workers. A laudable aim if you want to be an employee. I, and at least 20k other people, don't.

eek
14th August 2016, 21:19
Really don't understand lobbying, do you? Nor will you listen when it's explained by the people doing it. But hey, if it makes you happy...

Anyway IPSE have always supported the cause workers who are being forced into pseudo self-employment, since that undermines their whole argument about the difference between company owning chambermaids, BBC presenters and "self-employed" social workers and us genuine freelance contractors. On that basis, there's nobody to throw overboard. And, to challenge your other assertion from the viewpoint of someone whose been delivering IT to businesses for around 40 years, first line support is the face of the IT department and the coding world and the rest of the hyper-technical experts are actually supporting them in delivering the IT service. Nobody is any more or less important than anyone else, nor more or less deserving of support.

Finally you might like to reflect that all unions have as their stated aim the provision of equal employment rights for all workers. A laudable aim if you want to be an employee. I, and at least 20k other people, don't.

And you show once again that you don't understand how realpolitik works and the consequences of that lack of understanding when it comes to the big players in a serious game....

You were far more right on Friday than you are here. Highly skilled specialist contractors need to differentiate themselves from those who contract to either make a few more quid or because their employees want to save a few quid or the hassles of employing people.... Until and unless some group does that as a whole we are merely going to be seen as IR35 tax dodgers....

malvolio
14th August 2016, 21:29
And you show once again that you don't understand how realpolitik works and the consequences of that lack of understanding when it comes to the big players in a serious game....

You were far more right on Friday than you are here. Highly skilled specialist contractors need to differentiate themselves from those who contract to either make a few more quid or because their employees want to save a few quid or the hassles of employing people.... Until and unless some group does that as a whole we are merely going to be seen as IR35 tax dodgers....
OK, that's your opinion. It's not mine. Let's just leave it at that.

6128k
15th August 2016, 12:43
My public sector contract will end in a couple of weeks. It was a pig to get (3 stage interview) and although they had assumed (wrongly) that I would accept an extension, I politely declined.

Shame - it is an interesting project and the look on their face when I declined! :sick

DotasScandal
15th August 2016, 12:50
Shame - it is an interesting project and the look on their face when I declined! :sick

Hope you did mention why.

6128k
15th August 2016, 13:27
Hope you did mention why.

I did indeed, but I fear they simply do not understand. Most of the contractors here have not got a clue either.

Quite a large agency contacted me last week via linkedin and invited me and others (10 in total) to a 3 course dinner and drinks, completely paid for by them. I was rather sceptical at first, but the restaurant was only a 5 minute walk away from my clients work place and the attendee list looked interesting. Anyway, I got talking to the director of the agency and he was surprised that I was even aware of the new legislation. I was the first contractor who had even raised this issue with him. I asked if rates would go up to compensate, he felt that this was possible, but he was unsure. He certainly wasn't impressed by IPSE and their efforts to support us!

mudskipper
15th August 2016, 16:17
I did indeed, but I fear they simply do not understand. Most of the contractors here have not got a clue either.

Quite a large agency contacted me last week via linkedin and invited me and others (10 in total) to a 3 course dinner and drinks, completely paid for by them. I was rather sceptical at first, but the restaurant was only a 5 minute walk away from my clients work place and the attendee list looked interesting. Anyway, I got talking to the director of the agency and he was surprised that I was even aware of the new legislation. I was the first contractor who had even raised this issue with him. I asked if rates would go up to compensate, he felt that this was possible, but he was unsure. He certainly wasn't impressed by IPSE and their efforts to support us!

What is it he thinks that IPSE should have done that they haven't done?

youngguy
18th August 2016, 06:57
IPSE have published their response to the consultation (not sure if it can be shared here?)

On first glance I would say they have done a decent job. Hopefully it will be followed up by press releases and wider media activity from them

Yorkie62
18th August 2016, 12:11
Interesting article on LinkedIn
https://www.linkedin.com/pulse/ir35-public-sector-reform-we-cant-let-happen-les

DonkeyRhubarb
19th August 2016, 08:40
FWIW

https://www.whatdotheyknow.com/request/ps440m_psc_non_compliance#incoming-853564

teapot418
19th August 2016, 08:44
IPSE have published their response to the consultation (not sure if it can be shared here?)

On first glance I would say they have done a decent job. Hopefully it will be followed up by press releases and wider media activity from them

It's public on the website

https://www.ipse.co.uk/news/ipse-response-consultation-ir35-public-sector

Both this and the FCSA reponse make a good case IMO. Let's hope common sense prevails...

teapot418
19th August 2016, 08:47
FWIW

https://www.whatdotheyknow.com/request/ps440m_psc_non_compliance#incoming-853564

That's helpful then. :rolleyes:

LondonManc
19th August 2016, 08:52
FWIW

https://www.whatdotheyknow.com/request/ps440m_psc_non_compliance#incoming-853564

"We've guessed" would have sufficed.

eek
19th August 2016, 09:01
That's helpful then. :rolleyes:

It was actually as now I know the response they use I can hit them with one that's more difficult to get out of...

https://www.whatdotheyknow.com/request/criteria_used_to_arrive_at_estim

youngguy
19th August 2016, 09:15
It's ironic, when you do a Gov business case you have to document your calculations and how you reached your figures, alongside any assumptions. Clearly a different rule for HMRC

eek
19th August 2016, 09:18
It's ironic, when you do a Gov business case you have to document your calculations and how you reached your figures, alongside any assumptions. Clearly a different rule for HMRC

It's always been different rules and It is why you need to be very explicit in your requests. Last year I was tempted to phone up my mate to get the name of the system he was working on to point HMRC in the direction of the figures they were denying were available....

SueEllen
19th August 2016, 09:32
It's always been different rules and It is why you need to be very explicit in your requests. Last year I was tempted to phone up my mate to get the name of the system he was working on to point HMRC in the direction of the figures they were denying were available....

If it wouldn't have been linked back to your mate you should have done so. Or got someone else on here to ask the question. ;)

jamesbrown
19th August 2016, 09:39
It was actually as now I know the response they use I can hit them with one that's more difficult to get out of...

https://www.whatdotheyknow.com/request/criteria_used_to_arrive_at_estim

Can you double-check your linky works (to the consultation doc)?

eek
19th August 2016, 10:38
Can you double-check your linky works (to the consultation doc)?

I've had to add a second letter. There is a rogue " in the original linky which I noticed when testing the link and then forgot to correct....

That's the problem with making things simple, it makes things too simple so you miss things out...

eek
19th August 2016, 10:39
If it wouldn't have been linked back to your mate you should have done so. Or got someone else on here to ask the question. ;)

Mentioning internal system names really doesn't go down well - I decided it wasn't worth the hassle....

youngguy
19th August 2016, 11:18
It's always been different rules and It is why you need to be very explicit in your requests. Last year I was tempted to phone up my mate to get the name of the system he was working on to point HMRC in the direction of the figures they were denying were available....

I'd love to be a fly on the wall. I can't imagine they don't have contractors and it must be interesting to see their 'thought process's behind closed doors

eek
19th August 2016, 11:23
I'd love to be a fly on the wall. I can't imagine they don't have contractors and it must be interesting to see their 'thought process's behind closed doors

He's a contractor - as are an most of the productive people sat in Longbenton.... If you noticed my comment further up the people implementing this definitely won't be talking to people on the coal face.

In the same way that I discussed the transfer of some civil servants to awful offices in hideous parts of London outside Westminster I reckon a few of them will be transferred from policy into implementation once the consequences become clear....

jamesbrown
19th August 2016, 15:15
I've had to add a second letter. There is a rogue " in the original linky which I noticed when testing the link and then forgot to correct....

That's the problem with making things simple, it makes things too simple so you miss things out...

They never make it easy :laugh

jonnyboy
25th August 2016, 10:42
Hi all, new poster (long time lurker) here. Can somebody clarify something for me on this proposal?

I have skimmed through the initial document, looked at the examples, and all as far as I can see are based around a supply of a service for x days at x pounds?
What about the supply of a fix price no-days-specified-for-duration project.. such as "We will develop and supply a widget software app for you, it will be written in SQL and C#, and will cost a total of £25,000" - no day rate, no agency, no number of days.. does this fall into the catchment?

Looking at the flow in diagram 2 (page 23) it suggest that it goes into the "consideration" part, but then on the next flow, (diagram 4) the questions would be...
IS the worker required to do the work themselves - yes.. possibly I could outside some development to an overseas coding factory. How much do I need to farm out to NOT be doing it myself, 1%, 100%?
Does the engager decide OR HAVE THE RIGHT to decide how the work should be done.... this is where I have a problem

This last question is very very fuzzy - I cant imagine ANYBODY giving up this for anything - otherwise I might deliver something thats in Russian with yellow fonts and blue backgrounds. How far does the right for somebody to say "It must be in English and look nice" fall into this question. Or what about "And it must interface to our xxxxxx system using this interface"?

Thanks to anybody who can shed some light on this.

mudskipper
26th August 2016, 21:28
Hi all, new poster (long time lurker) here. Can somebody clarify something for me on this proposal?

I have skimmed through the initial document, looked at the examples, and all as far as I can see are based around a supply of a service for x days at x pounds?
What about the supply of a fix price no-days-specified-for-duration project.. such as "We will develop and supply a widget software app for you, it will be written in SQL and C#, and will cost a total of £25,000" - no day rate, no agency, no number of days.. does this fall into the catchment?

Looking at the flow in diagram 2 (page 23) it suggest that it goes into the "consideration" part, but then on the next flow, (diagram 4) the questions would be...
IS the worker required to do the work themselves - yes.. possibly I could outside some development to an overseas coding factory. How much do I need to farm out to NOT be doing it myself, 1%, 100%?
Does the engager decide OR HAVE THE RIGHT to decide how the work should be done.... this is where I have a problem

This last question is very very fuzzy - I cant imagine ANYBODY giving up this for anything - otherwise I might deliver something thats in Russian with yellow fonts and blue backgrounds. How far does the right for somebody to say "It must be in English and look nice" fall into this question. Or what about "And it must interface to our xxxxxx system using this interface"?

Thanks to anybody who can shed some light on this.

At the moment it's not clear which procurement frameworks will be covered by the legislation. Remember, you won't be answering the questions, it will be the engager. The risk is that most will just go with "everybody caught" rather than assessing each engagement individually.

northernladuk
26th August 2016, 21:40
You are mixing two problems. One is the consultation. The second is trying to work with the PS in the way you want. Now I'm in no way an expert but from my limited experience you won't be able to send work offshore. There is the engagement method as well. They just removed a load of recruiters off glcoud and out them through the correct bum on seat channels. Again I'm not 100% sure but you are going to struggle to get costed work through a bum on seat channel.

Dunno the details but something you need consider rather than just make up possible ways out.

eek
26th August 2016, 21:56
The way I've read it is that you need to supply things with a tangible value alongside the bum on a seat.

It's why I'm spending so long at the moment creating "building block" tools for the software I work on. That gives me a combination of fixed prices I can automatically add to the bill followed by an argument that only my company is authorised to do further customize it...

Granted its probably not the greatest argument in the world and the above is not the best explanation but its far more organised than other people are..

jamesbrown
26th August 2016, 21:58
Hi all, new poster (long time lurker) here. Can somebody clarify something for me on this proposal?

I have skimmed through the initial document, looked at the examples, and all as far as I can see are based around a supply of a service for x days at x pounds?
What about the supply of a fix price no-days-specified-for-duration project.. such as "We will develop and supply a widget software app for you, it will be written in SQL and C#, and will cost a total of £25,000" - no day rate, no agency, no number of days.. does this fall into the catchment?

Looking at the flow in diagram 2 (page 23) it suggest that it goes into the "consideration" part, but then on the next flow, (diagram 4) the questions would be...
IS the worker required to do the work themselves - yes.. possibly I could outside some development to an overseas coding factory. How much do I need to farm out to NOT be doing it myself, 1%, 100%?
Does the engager decide OR HAVE THE RIGHT to decide how the work should be done.... this is where I have a problem

This last question is very very fuzzy - I cant imagine ANYBODY giving up this for anything - otherwise I might deliver something thats in Russian with yellow fonts and blue backgrounds. How far does the right for somebody to say "It must be in English and look nice" fall into this question. Or what about "And it must interface to our xxxxxx system using this interface"?

Thanks to anybody who can shed some light on this.

To be brutally honest, all of this is moot, as mudskipper suggests. In the absence of due process (and that's what HMRC/HMG are trying to circumvent), it doesn't matter whether your contract is inside IR35 or not. What matters is the process that leads to a view about whether it's inside or not, and that process will be rigged against you by virtue of the liabilities in defending an outside position as an engager.

That being said, were the facts to matter, a superficial assessment of your scenario would be favourable. While payment terms are irrelevant in themselves, a fixed price contract typically entails a degree of risk and autonomy that would be difficult to prosecute as being inside. Obviously, it would depend on the facts. However, your last statement is confusing requirements ("what") and methodology ("how"). The purpose of SDC (HMRC's particular view of D&C) is to distinguish between requirements and methodology; that is, between what must be delivered and how it is delivered. In their view (and I have some sympathy with this, based on case law) what matters about D&C is the autonomy provided in delivering requirements, and not the requirements themselves, which may be prescribed upfront. If you engage a heating engineer to fit a new boiler, they don't have the autonomy to interpret that as a new shower, but they do have the autonomy to decide how best to fit it, as an independent expert. Now, arguably, there are situations where the "what" and "how" overlap, but generally speaking, you shouldn't be told how to deliver. Difficulties arise when a particular methodology is imposed (I don't work in IT, so this may be a cack-handed analogy, but my impression is that Agile could stray too far into the "how").

youngguy
30th August 2016, 14:29
Article in 'mainstream' media about the impending changes. The comments confirm the public is not on our side!

http://www.thisismoney.co.uk/money/smallbusiness/article-3761454/Tax-ruling-contractors-leave-public-sector-work.html#article-3761454

northernladuk
30th August 2016, 16:21
Article in 'mainstream' media about the impending changes. The comments confirm the public is not on our side!

http://www.thisismoney.co.uk/money/smallbusiness/article-3761454/Tax-ruling-contractors-leave-public-sector-work.html#article-3761454

And in other breaking news it has been found out that bears really do shit in the woods.

youngguy
30th August 2016, 17:27
And in other breaking news it has been found out that bears really do shit in the woods.

Yes,yes I know! It's more reaffirmation than new news....but plays to the points I previously made about hearts and minds and education of the differences we have.

I'd like to see the lobbying tackle this element as well as the Gov tax collection propaganda

MrMarkyMark
30th August 2016, 20:06
Yes,yes I know! It's more reaffirmation than new news....but plays to the points I previously made about hearts and minds and education of the differences we have.

I'd like to see the lobbying tackle this element as well as the Gov tax collection propaganda

The thing is most won't care in the least, they will just see that their tax money is being spent on tax avoiding expensive resource.

:rolleyes:

mudskipper
31st August 2016, 05:14
Yes,yes I know! It's more reaffirmation than new news....but plays to the points I previously made about hearts and minds and education of the differences we have.

I'd like to see the lobbying tackle this element as well as the Gov tax collection propaganda

TBH, given some of the comments on the article, I think these perceptions are down to contractors themselves, who flash the cash, say "I'll expense it" and generally boast about how little tax they pay. It's a small minority, but while people do behave like that, those who work with them (and possibly know the day rates) are going to think everyone is taking the mickey.

eek
31st August 2016, 07:15
TBH, given some of the comments on the article, I think these perceptions are down to contractors themselves, who flash the cash, say "I'll expense it" and generally boast about how little tax they pay. It's a small minority, but while people do behave like that, those who work with them (and possibly know the day rates) are going to think everyone is taking the mickey.

To a very little extent, the comments actually are more those of jealousy and greed... For many people its fine for people to be self employed if they earn less than you, awful and should be stopped if they earn more than you....

youngguy
31st August 2016, 08:03
TBH, given some of the comments on the article, I think these perceptions are down to contractors themselves, who flash the cash, say "I'll expense it" and generally boast about how little tax they pay. It's a small minority, but while people do behave like that, those who work with them (and possibly know the day rates) are going to think everyone is taking the mickey.

Quite. It reminds me of the days when I saw contractors with custom paint jobs for their Porsche's.....they were the same ones who off shored and then panicked when corp tax was due as they'd spent everything in their account.

There will always be an element of stupidity and rule breaking in any system and it is quick to judge when all you hear is the Gov's version.

Of those 'citizens' I have spoken to, most don't realise the responsibility we have in relation to running a company,insurances, pension and THE RISK. When you explain the full spectrum they at least get all the information and can then take a balanced and informed view. What they see is not the full story.

youngguy
31st August 2016, 08:06
To a very little extent, the comments actually are more those of jealousy and greed... For many people its fine for people to be self employed if they earn less than you, awful and should be stopped if they earn more than you....

Agree. The most common response I give (politely) when permies bitch about my fee etc is "come join the party". I follow up with the fact that will have costs,risk, no holidays training, etc etc. They soon scuttle back to their desk for a cup of tea and log their hours in their flexible working time sheet :)

Fact is, they want to have their cake and eat it......kind like the Gov with taxing us as employees but giving us no rights!

teapot418
1st September 2016, 08:32
If this PS nonsense comes in, it's going to be boom for brollies - agencies aren't going to want the hassle of payroll, so they will insist that the contractor uses a brolly. I wonder if our brolly friends responded to the consultation.

eek
1st September 2016, 21:11
Just sent what's going to be my default response for CLone contracts from now on

Sadly I won't be applying for the role. A colleague pointed me at the following consultation
https://www.gov.uk/government/consultations/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation
which alongside the statement that CLone contracts are subject to Direction and Control as specified in the latest version of
http://ccs-agreements.cabinetoffice.gov.uk/sites/default/files/contracts/4427-15%20Contingent%20Labour%20Generic.pdf means that it currently makes sense to only look for work outside the public sector.

eek
2nd September 2016, 09:40
Just sent what's going to be my default response for CLone contracts from now on

Sadly I won't be applying for the role. A colleague pointed me at the following consultation
https://www.gov.uk/government/consultations/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation
which alongside the statement that CLone contracts are subject to Direction and Control as specified in the latest version of
http://ccs-agreements.cabinetoffice.gov.uk/sites/default/files/contracts/4427-15%20Contingent%20Labour%20Generic.pdf means that it currently makes sense to only look for work outside the public sector.

And a very nice response from the Agent accepting my decision and stating that he feels that if they want to treat people like employees they will need to employ them as employees.

LondonManc
2nd September 2016, 10:29
And a very nice response from the Agent accepting my decision and stating that he feels that if they want to treat people like employees they will need to employ them as employees.

Thought you might have also gone with "or my day rate to reflect the status of the contract is £xxxx" to see the reaction :)

Hobosapien
2nd September 2016, 10:53
Don't many of the larger agencies already deal with temps that are employed and paid by them, so will already have all the PAYE stuff in place to add PS contractors onto for next year?

So this will impact the smaller agencies that either don't have or don't want that ability, depending how much upheaval/cost it will have on them to implement.

If the above is in any way on the right lines then the new legislation could be seen as a pincer movement by consultancies and big agencies to corner the market, aided by the govermin after the lobbying of appropriate MPs to give them the unfair advantage.

No need for brollies either if the agency takes that role.

eek
2nd September 2016, 11:16
Thought you might have also gone with "or my day rate to reflect the status of the contract is £xxxx" to see the reaction :)

To be honest the statement of under supervision direction and control by a civil servant is enough to put me off for good.

If you are going to treat me as a member of staff go and find a member of staff. If you want the specialist who would keep that system going for the next 21 months employ me as the specialist and leave me to it..

The fact the CLone document now explicitly states you are under SDC means I would seriously recommend avoiding anything to do with CLone even without the proposed changes...

malvolio
2nd September 2016, 11:24
To be honest the statement of under supervision direction and control by a civil servant is enough to put me off for good.

If you are going to treat me as a member of staff go and find a member of staff. If you want the specialist who would keep that system going for the next 21 months employ me as the specialist and leave me to it..

The fact the CLone document now explicitly states you are under SDC means I would seriously recommend avoiding anything to do with CLone even without the proposed changes...
It's not CLOne, it's all PS recruitment if you can't get in as a B2B supplier.

eek
2nd September 2016, 12:07
It's not CLOne, it's all PS recruitment if you can't get in as a B2B supplier.

True but that I was only discussing an element of it.

There is an explicit change in the July 2016 version of http://ccs-agreements.cabinetoffice.gov.uk/sites/default/files/contracts/4427-15%20Contingent%20Labour%20Generic.pdf which means CLone contracts are definitely going to be inside IR35 I would not be able to argue SDC.

The point is that another duck has been carefully added to the row....

LondonManc
2nd September 2016, 12:07
To be honest the statement of under supervision direction and control by a civil servant is enough to put me off for good.

If you are going to treat me as a member of staff go and find a member of staff. If you want the specialist who would keep that system going for the next 21 months employ me as the specialist and leave me to it..

The fact the CLone document now explicitly states you are under SDC means I would seriously recommend avoiding anything to do with CLone even without the proposed changes...

Haha, fair enough. Everyone has a limit I guess.

CLone - is that a PS department? I've never done PS contracting - came close but they wanted to pay what turned out to be about my old perm rate as a day rate.

eek
2nd September 2016, 12:11
Haha, fair enough. Everyone has a limit I guess.

CLone - is that a PS department? I've never done PS contracting - came close but they wanted to pay what turned out to be about my old perm rate as a day rate.

CLone is a shortcut for Contingent Labour one which is the framework under which crapita provide


Interim Managers
Specialist Contractors
Administration and Clerical Workers
Operational Workers


to central government departments and others..

northernladuk
2nd September 2016, 12:20
CLone is a shortcut for Contingent Labour one which is the framework under which crapita provide


Interim Managers
Specialist Contractors
Administration and Clerical Workers
Operational Workers


to central government departments and others..

Not all of them use Capita though.

nucastle
2nd September 2016, 12:31
A few of my contractor colleagues here are via Cap Gemini and then through an agent, skipping Capita entirely.

My engagement is via Capita, then a boutique software house and then my contract is with the software house.

So we all do the same job, but the ENGAGEMENT (thanks SueEllen) route is different.

interestingly that document seems to suggest that IT/Technology roles do not come under CL1, or am I reading that incorrectly?

SueEllen
2nd September 2016, 12:36
A few of my contractor colleagues here are via Cap Gemini and then through an agent, skipping Capita entirely.

My engagement is via Capita, then a boutique software house and then my contract is with the software house.

So we all do the same job, but the employment route is different.

interestingly that document seems to suggest that IT/Technology roles do not come under CL1, or am I reading that incorrectly?

So you admit you are a disguised employee and should be paying the right amount of tax under IR35?

eek
2nd September 2016, 12:41
A few of my contractor colleagues here are via Cap Gemini and then through an agent, skipping Capita entirely.

My engagement is via Capita, then a boutique software house and then my contract is with the software house.

So we all do the same job, but the employment route is different.

interestingly that document seems to suggest that IT/Technology roles do not come under CL1, or am I reading that incorrectly?

I think it would depend on how the role is being specified and delivered as the document (http://ccs-agreements.cabinetoffice.gov.uk/sites/default/files/contracts/4427-15%20Contingent%20Labour%20Generic.pdf) has a flow chart showing how people should be hired...

As these roles are being hired via CLone they are being treated as Specialists Consultants rather than technical people. One issue is how do you staff a transformation project once the initial system has been delivered (follow that flowchart and you see where you end up)...

In other news just told two other agents the news why I'm not interested - I added the new rate but it doesn't seem to have made any difference.

Given that I'm probably the number 1 choice for this role (skillset, location and then past knowledge of the project) how many more agents do you think I'll need to reply to...

nucastle
2nd September 2016, 12:46
So you admit you are a disguised employee and should be paying the right amount of tax under IR35?

I see what you did there.

10/10 ;)

youngguy
2nd September 2016, 13:31
I think it would depend on how the role is being specified and delivered as the document (http://ccs-agreements.cabinetoffice.gov.uk/sites/default/files/contracts/4427-15%20Contingent%20Labour%20Generic.pdf) has a flow chart showing how people should be hired...

As these roles are being hired via CLone they are being treated as Specialists Consultants rather than technical people. One issue is how do you staff a transformation project once the initial system has been delivered (follow that flowchart and you see where you end up)...

In other news just told two other agents the news why I'm not interested - I added the new rate but it doesn't seem to have made any difference.

Given that I'm probably the number 1 choice for this role (skillset, location and then past knowledge of the project) how many more agents do you think I'll need to reply to...

Sweepstake time!

I sort of feel sorry for the dept. They just want someone who can do the job (ie you) but will have to settle for whoever is willing to work under the new terms which will be caught contractually

LondonManc
2nd September 2016, 13:34
Sweepstake time!

I sort of feel sorry for the dept. They just want someone who can do the job (ie you) but will have to settle for whoever is willing to work under the new terms which will be caught contractually

You'll get BoS contractors blindly accepting it then having a heart attack after they get their first payment through.

eek
2nd September 2016, 13:49
Sweepstake time!

I sort of feel sorry for the dept. They just want someone who can do the job (ie you) but will have to settle for whoever is willing to work under the new terms which will be caught contractually

Not quite. At the moment they will probably find someone who doesn't know whats about to happen (that's not however one of the people who know the system).

However they will be coming from London or somewhere else as the market is very small. The money probably looks fine at the moment, come April however pay is paid net and expenses go :eek:

youngguy
2nd September 2016, 14:28
Not quite. At the moment they will probably find someone who doesn't know whats about to happen (that's not however one of the people who know the system).

However they will be coming from London or somewhere else as the market is very small. The money probably looks fine at the moment, come April however pay is paid net and expenses go :eek:

Where was the location?

The doc you showed is a major change - one presumes the CL contract will have to be updated as it is currently "IR35 friendly " after the last attempt to change it failed due to staff (MoJ) threatening to walk .

DaveB
2nd September 2016, 14:58
Where was the location?

The doc you showed is a major change - one presumes the CL contract will have to be updated as it is currently "IR35 friendly " after the last attempt to change it failed due to staff (MoJ) threatening to walk .

Wasn't just MoJ. Cabinet Office, Home Office and others all protested.

Interestingly the flow chart provided appears to indicate that if you are signed up to deliver a work package or other discreet deliverable then you don't end up on the CLOne framework.


Is the requirement output
based/statement of work/
work package (See Step 1)

I suspect this may well provide some wiggle room when aspiration meets reality.

malvolio
2nd September 2016, 16:46
Wasn't just MoJ. Cabinet Office, Home Office and others all protested.

Interestingly the flow chart provided appears to indicate that if you are signed up to deliver a work package or other discreet deliverable then you don't end up on the CLOne framework.



I suspect this may well provide some wiggle room when aspiration meets reality.
I admire your optimism. Very little PS work can be described in terms of a discrete (or even discreet :tongue ) deliverable apart from the people at the top of the programme. They aren't about to issues SoWs for every development item within a programme, for example, and if they get too general in the specification of an SoW they'll get smacked for not following the rules.

The challenge here is not to look to circumvent the new rules but to prove how much damage this is going to do to all PS work, which will be considerable, and then persuade TPTB that they are making a huge mistake by killing off the UK's flexible workforce.

jamesbrown
2nd September 2016, 16:50
I admire your optimism. Very little PS work can be described in terms of a discrete (or even discreet :tongue ) deliverable apart from the people at the top of the programme. They aren't about to issues SoWs for every development item within a programme, for example, and if they get too general in the specification of an SoW they'll get smacked for not following the rules.

The challenge here is not to look to circumvent the new rules but to prove how much damage this is going to do to all PS work, which will be considerable, and then persuade TPTB that they are making a huge mistake by killing off the UK's flexible workforce.

Agreed, but I admire your optimism too :D

eek
2nd September 2016, 17:33
Wasn't just MoJ. Cabinet Office, Home Office and others all protested.

Interestingly the flow chart provided appears to indicate that if you are signed up to deliver a work package or other discreet deliverable then you don't end up on the CLOne framework.



I suspect this may well provide some wiggle room when aspiration meets reality.

Sadly I think you are looking at it from the wrong direction.

If you look at the flowchart anything that contains discrete work packages is not covered by CLOne but by Digital Outcomes and Specialists** or Cloud 1. So no doubt it will be argued that as you were recruited by CLOne the discrete work packages are merely a facade that this new document sees through and the fact you've come in under CLOne by itself shows that you are under supervision direction or control...

much that it pains me to agree with malvolio he is right no one is going to create statements of work for small items within a bigger project especially as they need to then go via a different framework and that is just one rule designed to discourage departments trying to ignore them.


Finally someone asked where the contracts are based. Shall we just say up north near a newish castle with the offices original department. And as I've stated before this contract is to keep something essential running as other systems change around it until it can be replaced... Hence there is no real chance of a statement of work being issued beyond keep it going - I just suspect something will get interesting some time late next year and hit the news...

youngguy
7th September 2016, 12:33
http://www.contractoruk.com/news/0012680office_tax_simplification_criticises_ir35_p roposals.html

Interesting view on VAT.

eek
8th September 2016, 17:32
It was actually as now I know the response they use I can hit them with one that's more difficult to get out of...

https://www.whatdotheyknow.com/request/criteria_used_to_arrive_at_estim

And we have a response. Were I feeling better I would add a comment but that can wait till tomorrow

WordIsBond
9th September 2016, 09:34
And we have a response. Were I feeling better I would add a comment but that can wait till tomorrow
I'll put their response in shorter terms.

"The number is based on assumptions. We're using this figure to manipulate politicians and public opinion until legislation is passed. It is therefore not in the public interest for you to know what the assumptions are, since the legislation hasn't passed yet. So we aren't telling yet. But we're assuming you and everyone else is stupid since we're using the same number we used to use before the dividend tax increase, which any sane person over the age of 5 would understand would change the number. We don't care because we're busy trying to get the legislation passed. Thank you for your participation in the process by playing this pointless game. Please note that of course you can appeal this decision, but we're the ones who hear that appeal."

Even shorter version:
"We made it up but we can't admit that until the legislation is passed."

Still shorter:
:p

My response:

Total mockery of FOI to have a consultation on public policy and use a number in that consultation without being willing to back it up. If I were PM, I'd be firing some fools for this stuff. The "public interest" is in making as much disclosure as possible of the facts and statistics you are using in a public policy discussion. How are people supposed to respond to a consultation when the facts are in question and YOU won't back them up? The obvious answer is that nobody is allowed to question them.

It only proves that the consultation is a mockery with a predetermined answer. They aren't coming to the public as partners in the process of trying to find a good policy solution. They are the bosses who will dribble out what information they feel like giving, in the form they feel like giving it, without scrutiny. And given that, the obvious conclusion is the consultation is all a sham, the answer has been predetermined.

MrMarkyMark
9th September 2016, 09:56
I'll put their response in shorter terms.

"The number is based on assumptions. We're using this figure to manipulate politicians and public opinion until legislation is passed. It is therefore not in the public interest for you to know what the assumptions are, since the legislation hasn't passed yet. So we aren't telling yet. But we're assuming you and everyone else is stupid since we're using the same number we used to use before the dividend tax increase, which any sane person over the age of 5 would understand would change the number. We don't care because we're busy trying to get the legislation passed. Thank you for your participation in the process by playing this pointless game. Please note that of course you can appeal this decision, but we're the ones who hear that appeal."

Even shorter version:
"We made it up but we can't admit that until the legislation is passed."

Still shorter:
:p

My response:

Total mockery of FOI to have a consultation on public policy and use a number in that consultation without being willing to back it up. If I were PM, I'd be firing some fools for this stuff. The "public interest" is in making as much disclosure as possible of the facts and statistics you are using in a public policy discussion. How are people supposed to respond to a consultation when the facts are in question and YOU won't back them up? The obvious answer is that nobody is allowed to question them.

It only proves that the consultation is a mockery with a predetermined answer. They aren't coming to the public as partners in the process of trying to find a good policy solution. They are the bosses who will dribble out what information they feel like giving, in the form they feel like giving it, without scrutiny. And given that, the obvious conclusion is the consultation is all a sham, the answer has been predetermined.

+1 and isn't it a fact that the extra divi tax has been omiited from the figure?

WordIsBond
9th September 2016, 10:21
+1 and isn't it a fact that the extra divi tax has been omiited from the figure?
Well, they SAY it is for 2016-2017, and the divi tax applies to that tax year.

So obviously, if this number is right and their old number is right then there are many more PSCs making a lot more money in 2016-17 than the year before, so as to keep the answer the same, right?

Somebody said HMRC bods monitor this page. If they do, every time that figure is cited I hope they have the decency to blush.

It's so very revealing. The tax goes up on those outside IR35, and the number doesn't change. If the number were based on a calculation, of course, that number would be easy to change. Since it didn't change, it means either it is either pulled out of their nether regions or they were too stupid to change the tax rate in their calculations. And why IPSE doesn't issue a press release every time this number appears saying so is beyond me.

"HMRC is STILL using this obviously wrong number and won't justify it, so how much else is just wrong in the stuff they are putting out." I don't have a megaphone, but IPSE does.

eek
9th September 2016, 10:35
I think its because they thought there was some logic behind it rather than blind guesswork. Turns out what the rest of us suspected was true after all.

Between this and another discover today (regarding council tax and government grants) I'm utterly unimpressed with the Civil Service....

kolata
22nd September 2016, 10:19
How can all this work?

Here is a situation.

There are 2 contractors in public sector body. There is a system in this office which has been designed and run and modified by contractors for the last 10+ years.
Now the only 2 people who can run it and maintain it are the said 2 contractors. No one of the permies has the skills/knowledge/experience to run it.
There is no control or direction by the permies/organization on how the contractors should run the system. Is really up to them as long as it just works.

The contractors can work whenever, but generally business hours.

How can the agency or client or anyone really say these contractors do the same as permies or whatever so they will have to be inside it35?

Fred Bloggs
22nd September 2016, 10:24
Because in the parallel universe of HMG and HMRC, they are caught. And that's all that really matters to them.

eek
22nd September 2016, 10:24
How can all this work?

Here is a situation.

There are 2 contractors in public sector body. There is a system in this office which has been designed and run and modified by contractors for the last 10+ years.
Now the only 2 people who can run it and maintain it are the said 2 contractors. No one of the permies has the skills/knowledge/experience to run it.
There is no control or direction by the permies/organization on how the contractors should run the system. Is really up to them as long as it just works.

The contractors can work whenever, but generally business hours.

How can the agency or client or anyone really say these contractors do the same as permies or whatever so they will have to be inside it35?

The question may well be under what framework are they employed.

Contracted directly they may not have a problem. Employed via CLone they appear to be screwed.

MrMarkyMark
22nd September 2016, 10:25
How can all this work?

Here is a situation.

There are 2 contractors in public sector body. There is a system in this office which has been designed and run and modified by contractors for the last 10+ years.
Now the only 2 people who can run it and maintain it are the said 2 contractors. No one of the permies has the skills/knowledge/experience to run it.
There is no control or direction by the permies/organization on how the contractors should run the system. Is really up to them as long as it just works.

The contractors can work whenever, but generally business hours.

How can the agency or client or anyone really say these contractors do the same as permies or whatever so they will have to be inside it35?

Obviously they will argue that the roles, specialist or otherwise, should be perm if they have existed for 10 (!) years.

As for the practicalities of the situation they simply don't care.

kolata
22nd September 2016, 10:34
Obviously they will argue that the roles, specialist or otherwise, should be perm if they have existed for 10 (!) years.

As for the practicalities of the situation they simply don't care.

I know they might argue a lot of things.
Would a tribunal care about the practicalities or indeed about the reality of it?

MrMarkyMark
22nd September 2016, 10:48
I know they might argue a lot of things.
Would a tribunal care about the practicalities or indeed about the reality of it?

What sort of tribunal?

I mean you just said you weren't an employee, didn't you? :eyes






e

eek
22nd September 2016, 10:49
I know they might argue a lot of things.
Would a tribunal care about the practicalities or indeed about the reality of it?

What tribunal would you be aiming for?

The entire purpose of the new rules is to scare the public sector to pay you via paye and remove any incentive or ability for you to appeal...

malvolio
22nd September 2016, 11:15
Obviously they will argue that the roles, specialist or otherwise, should be perm if they have existed for 10 (!) years.[.Don't be so sure. I've contracted out my water, electricity, gas and waste disposal for many years, I don't think I employ that many people...

As has been said already, it's about which framework they are covered by. CLOne will be caught but others may well not be.

MrMarkyMark
22nd September 2016, 11:28
Don't be so sure. I've contracted out my water, electricity, gas and waste disposal for many years, I don't think I employ that many people...

As has been said already, it's about which framework they are covered by. CLOne will be caught but others may well not be.

They will try argue it, for sure, whether it is right or not is another question.

Hopefully, there will be room for flex, but knowing HMRC I wouldn't bank on it.

eek
22nd September 2016, 11:33
They will try argue it, for sure, whether it is right or not is another question.

Hopefully, there will be room for flex, but knowing HMRC I wouldn't bank on it.

We've already seen the CLone documentation changed on the quiet to reflect the new reality - CLOne contracts by default are under SDC

Danglekt
22nd September 2016, 12:12
sorry to be dim, what is CLOne?

northernladuk
22nd September 2016, 12:13
sorry to be dim, what is CLOne?

Contingent Labour 1. It's their framework for taking contractors on.

mudskipper
22nd September 2016, 12:32
I know they might argue a lot of things.
Would a tribunal care about the practicalities or indeed about the reality of it?

If you are deemed to be IR35 caught, you can challenge that decision, which could, potentially, go to tribunal who would look at the reality of the engagement in a similar way to IR35 cases today.

malvolio
22nd September 2016, 12:35
We've already seen the CLone documentation changed on the quiet to reflect the new reality - CLOne contracts by default are under SDC
Yes, for roles that are clearly manpower replacement or bulk skills on a given project (which to be fair is most of them). There are other routes for true specialists such as strategic consultants and suppliers of highly specific knowledge, and routes for suppliers of software and hardware (in our terms) such as someone building a site-wide LAN and providing all the tin and wires and monitoring as well as people.

The hard part will be finding a role that hasn't been defaulted to CLOne, but it is possible and I've seen it done.

eek
22nd September 2016, 12:44
If you are deemed to be IR35 caught, you can challenge that decision, which could, potentially, go to tribunal who would look at the reality of the engagement in a similar way to IR35 cases today.

Well you could but it would take a year at least to get the tribunal during which time you would be target number 1 to be removed from the client....

Also exactly what will you gain by going to a tribunal. The tax was already paid by the 3rd party and won't be reclaimable - the best you can hope for would be an agreement that you weren't covered by IR35 but oops we can't solve that now....

The killer in these changes is not just who determines the IR35 status and who has to pay up if its wrong but the switch in the tribunal rules away from HMRC trying to get money from a limited company, to a limited company trying to get it's client to pay money that said client has already paid HMRC and really, really, really doesn't want to pay twice especially when parts of it are not reclaimable from HMRC...

So yes you could argue the decision in a tribunal I just doubt you would be arguing over that much money as your contract will have been given to someone else.

eek
22nd September 2016, 12:46
Yes, for roles that are clearly manpower replacement or bulk skills on a given project (which to be fair is most of them). There are other routes for true specialists such as strategic consultants and suppliers of highly specific knowledge, and routes for suppliers of software and hardware (in our terms) such as someone building a site-wide LAN and providing all the tin and wires and monitoring as well as people.

The hard part will be finding a role that hasn't been defaulted to CLOne, but it is possible and I've seen it done.

Have you seen it done since the new guidance with simple flowcharts appeared in August?

jamesbrown
22nd September 2016, 13:18
The hard part will be finding a role that hasn't been defaulted to CLOne, but it is possible and I've seen it done.

I don't work in the PS, so I'm speculating, but I would imagine that the compliance framework for determining the choice of contracting vehicle will be heavily policed following these changes, otherwise it would be an obvious workaround...

SueEllen
22nd September 2016, 13:26
I don't work in the PS, so I'm speculating, but I would imagine that the compliance framework for determining the choice of contracting vehicle will be heavily policed following these changes, otherwise it would be an obvious workaround...

Departments and agencies will have to use workarounds as they won't be able to get the contractors....

eek
22nd September 2016, 13:30
Departments and agencies will have to use workarounds as they won't be able to get the contractors....

I think you have more faith than I do. I'm in a position where I can turn down work I don't like, I suspect a lot of other people can't turn down work or will rapidly end up in a position where they have no choice but to take a public sector contract.

And it's this attrition that will be used to show how successful the changes are.

jamesbrown
22nd September 2016, 14:34
I think you have more faith than I do. I'm in a position where I can turn down work I don't like, I suspect a lot of other people can't turn down work or will rapidly end up in a position where they have no choice but to take a public sector contract.

And it's this attrition that will be used to show how successful the changes are.

Yeah. It's going to be interesting to see how the survey evidence (e.g. from IPSE) translates into reality.

The difficulty with departments/agencies looking for workarounds is that they're now taking the risk, not the supplier. Even if they did have a route to certify status (i.e. a framework that didn't default to IR35-caught), they're going to approach this very cautiously (especially agencies - there's no way an agency is going to take the risk).

Jolie
22nd September 2016, 15:57
Yeah. It's going to be interesting to see how the survey evidence (e.g. from IPSE) translates into reality.

The difficulty with departments/agencies looking for workarounds is that they're now taking the risk, not the supplier. Even if they did have a route to certify status (i.e. a framework that didn't default to IR35-caught), they're going to approach this very cautiously (especially agencies - there's no way an agency is going to take the risk).

You would think so, but the agent who recently tried to tempt me to take a contract at HMRC that in his words was outside of IR35 was either reckless or simply stupid. He claimed to have contractors onsite at MOD sites who were outside IR35 also. I politely declined.

BoredBloke
23rd September 2016, 08:53
You would think so, but the agent who recently tried to tempt me to take a contract at HMRC that in his words was outside of IR35 was either reckless or simply stupid. He claimed to have contractors onsite at MOD sites who were outside IR32 also. I politely declined.

The pimp can say whatever he likes as it's not him that the HMRC will come looking for when they want their (your) cash. If any contact me for roles in the public sector I always decline them and state it's because of the IR35 proposals.

DaveB
23rd September 2016, 08:56
The pimp can say whatever he likes as it's not him that the HMRC will come looking for when they want their (your) cash. If any contact me for roles in the public sector I always decline them and state it's because of the IR35 proposals.

Actually they will be, as it will be the agents and clients responsibility to determine status and the agency will be responsible for collecting any tax due as a result.

I'm not saying no to PS contracts but my rate has gone up considerably and I'm citing the changes as the reason I wont take less.

youngguy
23rd September 2016, 09:13
I'm not saying no to PS contracts but my rate has gone up considerably and I'm citing the changes as the reason I wont take less.

How have you calculated how much your rate needs to increase by?

What kind of response have you been getting?

mudskipper
23rd September 2016, 09:55
Actually they will be, as it will be the agents and clients responsibility to determine status and the agency will be responsible for collecting any tax due as a result.


Agents are going to have a lot of learning to do, fast.

kolata
23rd September 2016, 09:59
Don't be so sure. I've contracted out my water, electricity, gas and waste disposal for many years, I don't think I employ that many people...

As has been said already, it's about which framework they are covered by. CLOne will be caught but others may well not be.

What is CLOne?

DaveB
23rd September 2016, 10:01
How have you calculated how much your rate needs to increase by?

What kind of response have you been getting?

I've basically doubled it. If anyone actually says yes to that then I'll talk to them, but I'm not expecting there to be a stampede to hire me.

northernladuk
23rd September 2016, 10:02
What is CLOne?

Look at post 454 on the previous page. Someone else asked and the answer is there.

MrMarkyMark
23rd September 2016, 10:02
What is CLOne?

Google is your friend :wink

Contingent Labour ONE | Crown Commercial Service (http://ccs-agreements.cabinetoffice.gov.uk/contracts/rm960)

DaveB
23rd September 2016, 10:03
What is CLOne?

Contingent Labour One

It's the overarching framework under which Capita provide resources into HMG. In the vast majority of cases your Agent will be dealing with Capita under CLOne, not directly with the PS Client.

kolata
23rd September 2016, 10:07
Look at post 454 on the previous page. Someone else asked and the answer is there.

I saw it 3 sec too late :)

Oh well.

northernladuk
23rd September 2016, 10:09
I saw it 3 sec too late :)

Oh well.

Should have tried a search ;)

kolata
23rd September 2016, 10:13
Should have tried a search ;)

I guess the question here is 'Do they have any other route to bring in contractors than CL1?'
Again we are talking for very special knowledge that no permie has at the moment, or had before.
Also, is this UK thing or England only?

MrMarkyMark
23rd September 2016, 10:17
I guess the question here is 'Do they have any other route to bring in contractors than CL1?'
Again we are talking for very special knowledge that no permie has at the moment, or had before.
Also, is this UK thing or England only?

One way would be to get on the PSL as a managed service provider?

eek
23rd September 2016, 10:24
One way would be to get on the PSL as a managed service provider?

Surely that depends on who is managing the service. If its hosted by the PSL its going to be very hard to argue that what is being provided is a managed service....

MrMarkyMark
23rd September 2016, 11:10
Surely that depends on who is managing the service. If its hosted by the PSL its going to be very hard to argue that what is being provided is a managed service....


Well, it was just a shoot in the dark suggestion.

However any other people providing managed services get in I guess, maybe that isn't on the PSL for PS?
It would be as far as IB is concerned, as I have looked into it.

You know the PS market / disaster far better than me :smile

DaveB
23rd September 2016, 11:32
I guess the question here is 'Do they have any other route to bring in contractors than CL1?'
Again we are talking for very special knowledge that no permie has at the moment, or had before.
Also, is this UK thing or England only?

Yes there is, but it's down to local department procurement and how much they want to piss of the Treasury. A number of central govt bodies will bring in contract resource without using CLOne if they can demonstrate they can get a better deal. I've had a couple of gigs this way via the resourcing arms of consultancies like Steria etc. who have enough commercial clout to undercut Capita.

Won't make any difference in the long run, the new rules will still apply regardless of the framework the contract is let under.

northernladuk
23rd September 2016, 11:45
What DaveB says. They've cleaned gcloud up recently and moved a lot of agents off that in to CL1. There 'maybe' ways around it but you'd need to be something special. A new contractor off the street? You'll be lucky.

eek
23rd September 2016, 14:20
What DaveB says. They've cleaned gcloud up recently and moved a lot of agents off that in to CL1. There 'maybe' ways around it but you'd need to be something special. A new contractor off the street? You'll be lucky.

It's remarkable how joined up HMG appear to be at the moment. Shame that the consequences could be their skilled staff disappearing elsewhere taking the knowledge with them...

gables
30th September 2016, 14:43
I guess the question here is 'Do they have any other route to bring in contractors than CL1?'
Again we are talking for very special knowledge that no permie has at the moment, or had before.
Also, is this UK thing or England only?

I knew I had seen this question somewhere... So is it England only? Here in Scotland, where I am, they've not heard of Clone, in fact the intranet has details of two frameworks (for different type of resource) with agency details who are contacted directly.

So presumably, if I were to continue here, it would be under the current situation?

jamesbrown
7th October 2016, 17:11
More than 100 BBC stars facing tax avoidance probes, HMRC reveals (http://www.telegraph.co.uk/news/2016/10/07/more-than-100-bbc-stars-facing-tax-avoidance-probes-hmrc-reveals/)

QCApproved
7th October 2016, 19:08
The inquiries go back to 2006 - is this the thin end of the wedge?
At least they will not be sent an APN and will have some genuine litigation process. As HMRC win 90% (recently updated) of their cases we await the arguments presented.

Fred Bloggs
8th October 2016, 00:56
More than 100 BBC stars facing tax avoidance probes, HMRC reveals (http://www.telegraph.co.uk/news/2016/10/07/more-than-100-bbc-stars-facing-tax-avoidance-probes-hmrc-reveals/)
I have zero sympathy for the BBC presenters. They are told when to turn up, what programme to present, where to sit and to read from an auto cue. If that isn't D&C then I don't know what is. I hope the IR35 book is thrown at them, very hard.

difficulttimes
8th October 2016, 07:09
I think people should be careful what they wish for...
I find the timing of this as very convenient with the IR35 test coming the public sector's way. High profile BBC presenters which will get picked up by the press and the public will take HMRC's side.

The articles in mainstream media are also very misleading so I'm sure the press release has been written by the 'nudge' unit. The most important take away is:

The tribunal case itself doesn’t concern the IR35 decision, but rather the BBC’s application to provide evidence as a non-party.

It seems like the BBC would provide evidence that would kill the case in an instant and HMRC are trying to block it - but I could be off the mark!

re: IR35: I would be very surprised if a) the presenters had compliance checks on this dating back to 2006 if they have had any at all, b) didn't have IR35 insurance c) the PSCs are probably now closed so harder for HMRC to do anything about.

In terms of D&C, yes they probably had more than most Ltd. Co contractors but still 80-90% of contractors out there who are interim covering permanent posts would have no less D&C .. But you are forgetting the 'S' - supervision and I would assume they would have had none. I would also argue that presenters would have a lot of control - but that is only from watching the Newsroom with no first hand experience.

But as I said I would be very careful would you wish for...

Fred Bloggs
8th October 2016, 08:32
FTAOD, I don't wish for anything re ir35. I'm as far away from ir35 as it possible to get.

SueEllen
8th October 2016, 10:23
I think people should be careful what they wish for...
I find the timing of this as very convenient with the IR35 test coming the public sector's way. High profile BBC presenters which will get picked up by the press and the public will take HMRC's side.

The articles in mainstream media are also very misleading so I'm sure the press release has been written by the 'nudge' unit. The most important take away is:

The tribunal case itself doesn’t concern the IR35 decision, but rather the BBC’s application to provide evidence as a non-party.

It seems like the BBC would provide evidence that would kill the case in an instant and HMRC are trying to block it - but I could be off the mark!

re: IR35: I would be very surprised if a) the presenters had compliance checks on this dating back to 2006 if they have had any at all, b) didn't have IR35 insurance c) the PSCs are probably now closed so harder for HMRC to do anything about.

In terms of D&C, yes they probably had more than most Ltd. Co contractors but still 80-90% of contractors out there who are interim covering permanent posts would have no less D&C .. But you are forgetting the 'S' - supervision and I would assume they would have had none. I would also argue that presenters would have a lot of control - but that is only from watching the Newsroom with no first hand experience.

But as I said I would be very careful would you wish for...

I don't think so.

From the people I've know and met in TV loads of people are freelance. While the presenters have the most public face there are producers, editors, researchers, cameramen etc who are anonymous to the public so in theory can work any of the smaller production companies/their own projects while working for the Beeb. (They won't because of the working hours.) Then there are some experts who pop up on random channels even though you see them on the Beeb a lot, and some people can do more than one role.

I suspect HMRC doesn't want the Beeb to turn up because apart from a few presenters it's these people they are after.

difficulttimes
11th October 2016, 17:14
https://www.ipse.co.uk/events/tue-11012016-1200/ir35-reform-public-sector-webinar

youngguy
11th October 2016, 20:40
http://www.computerweekly.com/news/450400847/IR35-dispute-prompts-mass-walkout-of-IT-contractors-from-MoD-agency?platform=hootsuite

DaveB
12th October 2016, 12:01
Well my position from April next year, assuming it all goes ahead as expected, is that My Co. rates will be quoted *net* of PAYE, plus Expenses. Not expecting to get much PS work, but if they get desperate enough they might pay it.

youngguy
12th October 2016, 14:31
Well my position from April next year, assuming it all goes ahead as expected, is that My Co. rates will be quoted *net* of PAYE, plus Expenses. Not expecting to get much PS work, but if they get desperate enough they might pay it.

That's an interesting approach 🙂

"My rate is £500pd NET, you work it out - as the Gov legislation says you are responsible for calculating and collecting taxes - and let me know!"

SussexSeagull
12th October 2016, 14:41
IR35 dispute prompts mass walkout of IT contractors from MoD agency (http://www.computerweekly.com/news/450400847/IR35-dispute-prompts-mass-walkout-of-IT-contractors-from-MoD-agency?platform=hootsuite)

So they were doing support stuff? In fairness that does sound a little too close to IR35 for my liking anyway.

They also all need to find roles in the private sector. Good luck with that at the moment.

DaveB
12th October 2016, 14:48
So they were doing support stuff? In fairness that does sound a little too close to IR35 for my liking anyway.

They also all need to find roles in the private sector. Good luck with that at the moment.

The way I read it was that 30 out of 32 contractors walked, and the two left are dealing with support issues simply to keep the lights on as there is now no resource for anything else.

SussexSeagull
12th October 2016, 14:52
The way I read it was that 30 out of 32 contractors walked, and the two left are dealing with support issues simply to keep the lights on as there is now no resource for anything else.

Great example of a place not being able to function without contractors!

Problem is with the public sector is they don't pay their people enough or develop and train them then the moan when they have to fork out on contractors (in fairness that could be said of a lot of the private sector as well).

All going to end badly.

jamesbrown
12th October 2016, 15:26
Well my position from April next year, assuming it all goes ahead as expected, is that My Co. rates will be quoted *net* of PAYE, plus Expenses. Not expecting to get much PS work, but if they get desperate enough they might pay it.

Obviously, the PS client doesn't know your final PAYE liability, which is a critical flaw in the whole proposal and will lead to major disparities between the RTI payments and the final (correct) liability declared in your SATR. For the same reason, it would be difficult to approach this as you suggest. I think the only sensible approach, if you want to charge more, is to ask for more. In any case, I'd expect that's the only way the client/agent would engage in a conversation (even if it ended with, "no way").

SueEllen
12th October 2016, 15:59
Great example of a place not being able to function without contractors!

Problem is with the public sector is they don't pay their people enough or develop and train them then the moan when they have to fork out on contractors (in fairness that could be said of a lot of the private sector as well).

All going to end badly.

Shame the other two don't walk. They must live in walking distance from the site not to.

Oh and in the private sector they presume they can just get them from abroad. :laugh

Pherlopolus
12th October 2016, 16:07
Shame the other two don't walk. They must live in walking distance from the site not to.

Oh and in the private sector they presume they can just get them from abroad. :laugh

I wondered if the last 2 use an umbrella anyway...

DaveB
12th October 2016, 16:23
Obviously, the PS client doesn't know your final PAYE liability, which is a critical flaw in the whole proposal and will lead to major disparities between the RTI payments and the final (correct) liability declared in your SATR. For the same reason, it would be difficult to approach this as you suggest. I think the only sensible approach, if you want to charge more, is to ask for more. In any case, I'd expect that's the only way the client/agent would engage in a conversation (even if it ended with, "no way").

Not really, you just tell the "employer" your current tax standing - equivalent to a permit giving them payslips or a P45 from their last employer, and they can work it out from there. Provided you keep payslips from your co. showing what you've "earned" you just inform the next client accordingly, or not if they are not PS.

jamesbrown
12th October 2016, 16:43
Not really, you just tell the "employer" your current tax standing - equivalent to a permit giving them payslips or a P45 from their last employer, and they can work it out from there. Provided you keep payslips from your co. showing what you've "earned" you just inform the next client accordingly, or not if they are not PS.

That isn't nearly good enough for anything but the simplest of arrangements. The liability could be drastically wrong when engaged in a mix of private and public sector contracts during a tax year, whether in sequence or in parallel. Also, frankly, I think you'd be perceived as not being credible unless you attempted to negotiate a gross payment. In that sense, it's really no different than negotiating a permie salary.