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IPSE
21st July 2016, 11:58
A short while back - before all the Brexit furore - HMRC announced worrying plans to radically change the way IR35 works for public sector engagements. IPSE will robustly fight the plans announced in the consultation, published on May 26th, which the government intends to come into force from April 2017.

What exactly is government proposing?

The consultation document (https://www.gov.uk/government/consultations/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation) puts forward a set of proposals that will change the way IR35 works for public sector engagements. In essence the government wants public sector organisations or the agency to determine the IR35 status of engagements and then, if caught, apply taxes as they would for their employees, through the RTI system. This paragraph from page six sums it up:


‘This means that where an individual provides services to a public sector engager through a PSC and is doing a similar job in a similar manner to an employee, both they and their engager will be required to pay broadly the same tax and National Insurance as if they were an employee. This will be the case whether the individual is engaged directly or through a third party such as a recruitment agency. Taxes will be reported through the Real Time Information system, and paid using HMRC’s accounting procedures which public sector organisations and agencies will already be using for any individuals they employ directly’.

For more details and to keep up-to-date on the consultation and IPSE's response to it, visit www.ipse.co.uk - we'll also post here as things develop.

DonkeyRhubarb
21st July 2016, 12:03
And, if it proves successful for the public sector...

TestMangler
21st July 2016, 12:49
When you say 'robustly fight', do you mean 'accept and sell an insurance product for it' or 'propose something just as bad but robustly fight for 10% off at BHS' ?

northernladuk
21st July 2016, 12:50
Didn't one of our posters say IPSE don't sell insurance? ;)

eek
21st July 2016, 12:59
A short while back - before all the Brexit furore - HMRC announced worrying plans to radically change the way IR35 works for public sector engagements. IPSE will robustly fight the plans announced in the consultation, published on May 26th, which the government intends to come into force from April 2017.

What exactly is government proposing?

The consultation document (https://www.gov.uk/government/consultations/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation) puts forward a set of proposals that will change the way IR35 works for public sector engagements. In essence the government wants public sector organisations or the agency to determine the IR35 status of engagements and then, if caught, apply taxes as they would for their employees, through the RTI system. This paragraph from page six sums it up:



For more details and to keep up-to-date on the consultation and IPSE's response to it, visit www.ipse.co.uk - we'll also post here as things develop.

Keep up at the back (http://forums.contractoruk.com/future-contracting/114703-public-sector-ir35-consultation-launched.html) - we knew about it on May 26th (and from memory I think it was myself that pointed IPSE at it)....

As for the need to panic.... Yep I'd agree with that this is a done deal as will be reflected by other payroll changes in the Autumn statement to reflect the changing world and the abuse of self-employment... That has full union backing so unless you are working with the unions you won't have a prayer....

LondonManc
21st July 2016, 13:00
No doubt sponsored/recommended by Crapita to get competent contractors out of their way.

Hobosapien
21st July 2016, 13:01
At least it gives us until next April to get well clear of the PS. They will then be blacklisted as far as my future work seeking goes.

I'm sure the government will have it all well thought out so after the agency pays the tax on the contractor's behalf that double taxation is easy to avoid for the rest of the invoice payment made from the agency to the ltd. The accountants will be rubbing their hands in all the extra effort for ltd company accounts to ensure it's handled correctly. Good for them, not for me, I'm out.

IPSE
21st July 2016, 13:07
When you say 'robustly fight', do you mean 'accept and sell an insurance product for it' or 'propose something just as bad but robustly fight for 10% off at BHS' ?
:grin You appeal to the cynic in me too :grin

However, I think we meant robustly fight as in what we did on S660, changes to T&S allowance for LtdCos, Security Clearance, MAC rules tightened, AWD exclusion for LtdCos, AWR, SmallBiz Commissioner, HMRC corrupted BETs withdrawn, one/two month proposal scotched. We do our best and, as a not-for-profit, it's our core activity. The other member benefits, e.g. savings for our members of >£500k this quarter alone, are just icing on their cake.

IPSE
21st July 2016, 13:08
And, if it proves successful for the public sector...
That's the big worry we have too.

MrMarkyMark
21st July 2016, 13:09
:grin You appeal to the cynic in me too :grin

However, I think we meant robustly fight as in what we did on S660, changes to T&S allowance for LtdCos, Security Clearance, MAC rules tightened, AWD exclusion for LtdCos, AWR, SmallBiz Commissioner, HMRC corrupted BETs withdrawn, one/two month proposal scotched. We do our best and, as a not-for-profit, it's our core activity. The other member benefits, e.g. savings for our members of >£500k this quarter alone, are just icing on their cake.

Let's not forget the Freelance LTD Co idea :suicide:

northernladuk
21st July 2016, 13:10
At least it gives us until next April to get well clear of the PS. They will then be blacklisted as far as my future work seeking goes.
.

Not really. You want to be out of PS before Jan as there will be droves leaving between Jan and April when they finally realise. You want to be out before Oct, Dec to avoid the quite period so you should be looking to make a decision around Sept so not long at all.

LondonManc
21st July 2016, 13:12
Not really. You want to be out of PS before Jan as there will be droves leaving between Jan and April when they finally realise. You want to be out before Oct, Dec to avoid the quite period so you should be looking to make a decision around Sept so not long at all.

You are kidding right? 80% of contractors won't be aware of it until their accountant mentions it to them at the end of April.

Hobosapien
21st July 2016, 13:21
Not really. You want to be out of PS before Jan as there will be droves leaving between Jan and April when they finally realise. You want to be out before Oct, Dec to avoid the quite period so you should be looking to make a decision around Sept so not long at all.


Perfect! That fits my current situation down to a cup of tea. Lovely.

Hobosapien
21st July 2016, 13:25
You are kidding right? 80% of contractors won't be aware of it until their accountant mentions it to them at the end of April.


I wouldn't even be confident of the accountants being that aware.

So first time some contractors will find out may be when they submit their first invoice to the agency and wonder what the hell is going on with the payment amount. :laugh

I'm sure the level of competence in the agency world will mean all affected PS contracts will be clearly marked as such in the job spec and contract terms. So that should catch those that aren't previously clued up.

northernladuk
21st July 2016, 13:58
You are kidding right? 80% of contractors won't be aware of it until their accountant mentions it to them at the end of April.

Well I've added it to my risk log and escalated it as our project has slipped past April. Hopefully that will get it some visibility.

That said, bearing in mind I am having to educate my agency and pass the relevant links for them to ponder I am absolutely sure there will be a lot of very surprised people come April.

eek
21st July 2016, 14:01
:grin You appeal to the cynic in me too :grin

However, I think we meant robustly fight as in what we did on S660, changes to T&S allowance for LtdCos, Security Clearance, MAC rules tightened, AWD exclusion for LtdCos, AWR, SmallBiz Commissioner, HMRC corrupted BETs withdrawn, one/two month proposal scotched. We do our best and, as a not-for-profit, it's our core activity. The other member benefits, e.g. savings for our members of >£500k this quarter alone, are just icing on their cake.

A battle comprehensively won by the Unions - as they got exactly what they asked for....

LondonManc
21st July 2016, 14:16
I wouldn't even be confident of the accountants being that aware.

So first time some contractors will find out may be when they submit their first invoice to the agency and wonder what the hell is going on with the payment amount. :laugh

I'm sure the level of competence in the agency world will mean all affected PS contracts will be clearly marked as such in the job spec and contract terms. So that should catch those that aren't previously clued up.

:bluelight

The big problem I have is the double whammy of permie-like and T&S. If Hector is treating these gigs like permie roles, then I'm a permie of MyCo Ltd and should be allowed to claim travel expenses to ClientCo site.

DotasScandal
21st July 2016, 14:17
However, I think we meant robustly fight as in what we did on S660, changes to T&S allowance for LtdCos, Security Clearance, MAC rules tightened, AWD exclusion for LtdCos, AWR, SmallBiz Commissioner, HMRC corrupted BETs withdrawn, one/two month proposal scotched.

Guess all this robust fighting left no time at all for the retrotax shenanigans (http://forums.contractoruk.com/hmrc-scheme-enquiries/) a great many of your members are persecuted with.

missinggreenfields
21st July 2016, 14:27
Guess all this robust fighting left no time at all for the retrotax shenanigans (http://forums.contractoruk.com/hmrc-scheme-enquiries/) a great many of your members are persecuted with.

From what I've read here, there aren't a "great many" IPSE members affected by this.

How many IPSE members are affected?

eek
21st July 2016, 14:29
From what I've read here, there aren't a "great many" IPSE members affected by this.

How many IPSE members are affected?

None that were members at the time they used a scheme so IPSE don't deem it important.... If you want me to dig up the appropriate link on the IPSE forum I'll have a look

missinggreenfields
21st July 2016, 14:37
None that were members at the time they used a scheme so IPSE don't deem it important.... If you want me to dig up the appropriate link on the IPSE forum I'll have a look

If you would, yes please.

But if no members are affected, that seems to be a long way from the "great many" that has been suggested in this thread. Althoguh from a pure mathematical point of view, zero is a great number because it is fascinating.

gables
21st July 2016, 14:42
I'm sure this will have been asked before but I've missed it, but how does this work with pensions?

I think I'm correct in thinking that pension contributions come out before the calculation for the IR35 paye element, and therefore the amount of pension contribution being made will determine how much is due under IR35... so how can the correct amount be taken before the invoice is paid?

eek
21st July 2016, 14:52
I'm sure this will have been asked before but I've missed it, but how does this work with pensions?

I think I'm correct in thinking that pension contributions come out before the calculation for the IR35 paye element, and therefore the amount of pension contribution being made will determine how much is due under IR35... so how can the correct amount be taken before the invoice is paid?

My reading of it is that because you will be paid net you will probably lose the employee and employer NI contributions as they will have been deducted by the agency / Public sector payroll alongside the income tax due.

You would be able to reclaim the income tax side of the pension (I bet HMRC haven't included even that on things that need to do) but they probably haven't thought about how to do NI contributions....

DotasScandal
21st July 2016, 14:56
But if no members are affected...

Please re-read eek's post, and familiarize yourself with the retrospective nature of what is being discussed. One could have been in a "scheme" 10 years ago, a Ltd Co. contractor and member of PCG/IPSE for the past 9, and be affected by APNs today.

gables
21st July 2016, 14:57
My reading of it is that because you will be paid net you will probably lose the employee and employer NI contributions as they will have been deducted by the agency / Public sector payroll alongside the income tax due.

You would be able to reclaim the income tax side of the pension (I bet HMRC haven't included even that on things they need to do) but they probably haven't thought about how to do NI contributions....

Hmm, it's quite astonishing the lack of thinking this stuff through by HMRC.

So, if you had an IR35 caught contract for the year invoicing 100K and you were paying 40K into a pension, that would make a considerable difference in what the tax due would be, no?

teapot418
21st July 2016, 14:59
Keep up at the back (http://forums.contractoruk.com/future-contracting/114703-public-sector-ir35-consultation-launched.html) - we knew about it on May 26th (and from memory I think it was myself that pointed IPSE at it)....

Do you mean you posted a link on their forum?

By that logic, it was me who pointed you at the consultation.

Who says tea and biccies doesn't work? :)

eek
21st July 2016, 15:06
Do you mean you posted a link on their forum?

By that logic, it was me who pointed you at the consultation.

Who says tea and biccies doesn't work? :)

Yep.... But my point was that CUK was ahead of IPSE in knowing about this....

As I said we knew about this before IPSE did and I posted on IPSE's forum well before anyone over there started discussing it....

eek
21st July 2016, 15:07
Hmm, it's quite astonishing the lack of thinking this stuff through by HMRC.

So, if you had an IR35 caught contract for the year invoicing 100K and you were paying 40K into a pension, that would make a considerable difference in what the tax due would be, no?

Yep but now they are going to get £8k or so in NI contributions that you can't reclaim....

missinggreenfields
21st July 2016, 15:08
Please re-read eek's post, and familiarize yourself with the retrospective nature of what is being discussed. One could have been in a "scheme" 10 years ago, a Ltd Co. contractor and member of PCG/IPSE for the past 9, and be affected by APNs today.

OK, nobody was a member of PCG when they were in the scheme. So a "great many" have joined IPSE since they were in the "scheme" 10 years ago.

How many that are affected are current IPSE members? You said it was a "great many" - is that more than 10? more than 100? more than 1000? more than 10000?

teapot418
21st July 2016, 15:10
I'm sure this will have been asked before but I've missed it, but how does this work with pensions?

I think I'm correct in thinking that pension contributions come out before the calculation for the IR35 paye element, and therefore the amount of pension contribution being made will determine how much is due under IR35... so how can the correct amount be taken before the invoice is paid?

The pension "thing" is an example of why this just won't work. Currently, if you're IR35 caught, you can pay as much as you want into your SIPP as a company contribution (up to the 40K limit).

By paying in post tax, you get your tax relief, but you don't get NI back, so you would be considerably 'worse off' that IR35 caught today.

How about fighting for your employment rights, including a nice final salary scheme...

northernladuk
21st July 2016, 15:16
How about fighting for your employment rights, including a nice final salary scheme...

We automatically get employment rights after two years don't we???

TestMangler
21st July 2016, 15:17
We automatically get employment rights after two years don't we???

Have you asked your employer ?

missinggreenfields
21st July 2016, 15:18
The pension "thing" is an example of why this just won't work. Currently, if you're IR35 caught, you can pay as much as you want into your SIPP as a company contribution (up to the 40K limit).

By paying in post tax, you get your tax relief, but you don't get NI back, so you would be considerably 'worse off' that IR35 caught today.

How about fighting for your employment rights, including a nice final salary scheme...

You could get the engager to pay to make employer contributions to your salary scheme :laugh

That way, you'd be taxed as an employee, pay NI as an employee (and employer), have them pay into your salary as an employer - but you categorically would not be an employee for employment rights.

Platypus
21st July 2016, 15:25
What exactly is government proposing?

Isn't this legislation designed to "catch" all those NHS and PS management fatcats who charge the PS a fortune as "consultants" to be full-time CEOs, managers etc of NHS trusts, the BBC and the like?

I mention this because if so I assume that he public will be very much in favour of this legislation.

Best of luck with your campaign but I for one couldn't support it

LondonManc
21st July 2016, 15:27
Isn't this legislation designed to "catch" all those NHS and PS management fatcats who charge the PS a fortune as "consultants" to be full-time CEOs, managers etc of NHS trusts, the BBC and the like?

I mention this because if so I assume that he public will be very much in favour of this legislation.

Best of luck with your campaign but I for one couldn't support it

Sledgehammer to crack a nut. I'd like to think that IPSE are going to campaign to get the sledgehammer changed to a nutcracker so that there's not the catastrophic collateral damage that we are expecting as things stand.

IPSE
21st July 2016, 15:27
Isn't this legislation designed to "catch" all those NHS and PS management fatcats who charge the PS a fortune as "consultants" to be full-time CEOs, managers etc of NHS trusts, the BBC and the like?

I mention this because if so I assume that he public will be very much in favour of this legislation.

Best of luck with your campaign but I for one couldn't support it

Much of that sector is already IR35-caught by dint of the Officeholders legislation. This will affect every ordinary contractor.

missinggreenfields
21st July 2016, 15:28
Isn't this legislation designed to "catch" all those NHS and PS management fatcats who charge the PS a fortune as "consultants" to be full-time CEOs, managers etc of NHS trusts, the BBC and the like?

No - they are already caught inside IR35 because they are in controlling positions. Danny Alexander brought the rule in, which makes sense to a lot of people.

northernladuk
21st July 2016, 15:29
Much of that sector is already IR35-caught by dint of the Officeholders legislation. This will affect every ordinary contractor.

What about extraordinary ones?

teapot418
21st July 2016, 15:30
Yep.... But my point was that CUK was ahead of IPSE in knowing about this....

As I said we knew about this before IPSE did and I posted on IPSE's forum well before anyone over there started discussing it....

No, your point is that it was being discussed on the CUK forums before it was discussed on the IPSE forums. A forum discussion requires someone to start a thread, which I did here and someone did on IPSE, and very useful it was too. But I think it's probably a bit of a stretch to assume IPSE were blissfully ignorant until that thread was posted. :)

IPSE
21st July 2016, 15:30
What about extraordinary ones?

They're all too busy posting on CUK to worry about HMRC :rollin:

DotasScandal
21st July 2016, 15:41
How many that are affected are current IPSE members? You said it was a "great many" - is that more than 10? more than 100? more than 1000? more than 10000?

Probably somewhere between 1000 and 10000. Most of those who spoke to us and are still contracting are now Ltd Co. and IPSE members. Big Group paints a similiar picture.

missinggreenfields
21st July 2016, 15:46
Probably somewhere between 1000 and 10000. Most of those who spoke to us and are still contracting are now Ltd Co. and IPSE members. Big Group paints a similiar picture.

Curious that if it's close to 10000 that with that volume, no single candidate for CC ever has mentioned it, no board candidate has ever mentioned it, and there's been near silence on the PCG / IPSE forums for as long as I can remember - surely if nearly half the membership are affected someone would have made more of an issue and demanded action.

Hopefully, some of those thousands will be pushing more for you all - if I was affected, I'd be disappointed that no-one has considered it before :(

DotasScandal
21st July 2016, 15:54
Curious that if it's close to 10000 that with that volume, no single candidate for CC ever has mentioned it, no board candidate has ever mentioned it, and there's been near silence on the PCG / IPSE forums for as long as I can remember - surely if nearly half the membership are affected someone would have made more of an issue and demanded action.
Hopefully, some of those thousands will be pushing more for you all - if I was affected, I'd be disappointed that no-one has considered it before :(

First, just like only a tiny tiny proportion of contractors at large frequent the CUK forums, we'd hazard that only a minority of IPSE members use / are aware of the forums at all.
Second, we understand that Big Group have approached IPSE, and that IPSE is adopting a "elephant in the room" approach to the whole matter.
And yes, this is a cause of disappointment.

Hobosapien
21st July 2016, 16:03
The pension "thing" is an example of why this just won't work. Currently, if you're IR35 caught, you can pay as much as you want into your SIPP as a company contribution (up to the 40K limit).

By paying in post tax, you get your tax relief, but you don't get NI back, so you would be considerably 'worse off' that IR35 caught today.

How about fighting for your employment rights, including a nice final salary scheme...


HMRC will see this new approach as closing that loophole where as a disguised employee you should be paying PAYE/NI on the full amount. By them moving responsibility further up the payment chain they take that option away so in a way it's their view of tax simplification. :freaky:

LondonManc
21st July 2016, 16:14
HMRC will see this new approach as closing that loophole where as a disguised employee you should be paying PAYE/NI on the full amount. By them moving responsibility further up the payment chain they take that option away so in a way it's their view of tax simplification. :freaky:

Oh it is simplification ; they can screw you over in far simpler ways. They get one payment from PS dept and not lots from different people who don't know whether they're inside IR35 or not.

missinggreenfields
21st July 2016, 16:35
First, just like only a tiny tiny proportion of contractors at large frequent the CUK forums, we'd hazard that only a minority of IPSE members use / are aware of the forums at all.

But if there are 10000 IPSE members who are affected, that's probably close to half the membership. You'd have thought that one (maybe even two?) of those would post something on the forums, or stand for CC or stand for board -if that many are affected, surely it would be a walk-on and then you'd be able to change things from inside :ohwell


Second, we understand that Big Group have approached IPSE, and that IPSE is adopting a "elephant in the room" approach to the whole matter.

Informative - I've seen things written about how there have been talks but nothing formal, but if that is true then that must be incredibly frustrating for the great number of IPSE members who are caught. But if you want IPSE to do something then why aren't you pushing them to do something? :confused:


And yes, this is a cause of disappointment.

:(

missinggreenfields
21st July 2016, 16:39
HMRC research finds 'resistance' to proposals to shift contractor tax compliance burden - The Register (http://www.theregister.co.uk/2016/07/21/ir35_compliance_burden_shift/)

DotasScandal
21st July 2016, 16:43
But if there are 10000 IPSE members who are affected, that's probably close to half the membership. You'd have thought that one (maybe even two?) of those would post something on the forums, or stand for CC or stand for board -if that many are affected, surely it would be a walk-on and then you'd be able to change things from inside :ohwell

Informative - I've seen things written about how there have been talks but nothing formal, but if that is true then that must be incredibly frustrating for the great number of IPSE members who are caught. But if you want IPSE to do something then why aren't you pushing them to do something? :confused:

:(

Never said there are "10000 IPSE members who are affected"... but play candid / stupid if you like.

We are not "pushing them to do something" because as mentioned earlier, IPSE are not interested, and we are already busy enough as it is fighting this through other avenues.

missinggreenfields
21st July 2016, 17:40
Never said there are "10000 IPSE members who are affected"... but play candid / stupid if you like.

We are not "pushing them to do something" because as mentioned earlier, IPSE are not interested, and we are already busy enough as it is fighting this through other avenues.

No - you said "Probably somewhere between 1000 and 10000" so let's go with your lowest estimate.

1000 members - if that many are affected, then I'd have thoguht that at least one could / would say "I think this is terrible and I want to do something about it", but each to their own.

Seems strange to be moaning that IPSE aren't going anything, but none of the "great many" affected members (and I don't think for a second that there are over 1000 members who are affected) want to do the simple thing of asking / pushing the organisation that they belong to to do something to me.

I'd be surprised if 1000 members even voted in the elections, so it would be dead easy to write a statement that says "I'm a scheme user and IPSE should do more - if you're affected then vote for me" and get elected by the great many affected members. It would also send a clear message to the management that they should do something.

Fred Bloggs
21st July 2016, 18:55
IIRC, the IPSE party line is that they always advised against using schemes. So, if you used one anyway, then you were always on your own.

youngguy
21st July 2016, 19:03
For more details and to keep up-to-date on the consultation and IPSE's response to it, visit www.ipse.co.uk - we'll also post here as things develop.

I'm an IPSE member and this is a question for them (please do respond):-

What exactly are you doing about this?

This is the biggest issue and most serious 'threat' we have ever seen. Very little on the ipse forum bar a comms guy asking individual contractors to publicly state their issues.

I have seen an email begging for us to get our mates to join (nice membership revenue) to boost numbers.

I have seen a rather desperate angle by IPSE of 'as you will be busy with brexit shall we just put all this stuff on hold?'

I know there was a round table last week but I've not seen any details yet and I completed a questionnaire but haven't seen an output.

Joe public thinks us greedy contractors get loads and should be taxed the same. What are IPSE doing to lobby them and explain that we have a diff model and taxing us like them but giving us no rights is not fair?

What is IPSE doing with HMRC to explain the tool needs to be available now so contractors can calculate what it means and end contracts or renegotiate? What about the details such as if we are deemed 'caught' mid contract we have a get out clause ? What about the whole host of Qs about how their double tax model will work? What about challenging the revenue they will make and the alleged mere 500k to implement?

What about agencies and the additional workload on them and their costs?

What about the impact on the public sector with mass exodus, rate rises or additional agency costs? What is IPSE doing to show how this idea affects a large number of different stakeholders in the chain? What about costing what this means to overall PS costs and showing how that will offset the alleged extra tax? What about PR and comms and engagement each and every month to keep the pressure on?

Is the IPSE plan merely to produce one submission pre sept and hope for the best?

I'm not saying ipse doesn't have an aggressive, multi faceted plan for all this to tackle all stakeholders .....but if they have could they share some of their thoughts and progress because I don't get an immediate sense they are doing a huge amount and I've seen more from other contractor websites (which don't require a membership) and Deloitte etc on this subject.

So come on IPSE, share the battle plan!

Ketto
21st July 2016, 19:22
Great post.... I'm an IPSE+ member too, would love to hear what you will be doing to support us?

IPSE
22nd July 2016, 08:21
I'm an IPSE member and this is a question for them (please do respond):-

What exactly are you doing about this?

This is the biggest issue and most serious 'threat' we have ever seen. Very little on the ipse forum bar a comms guy asking individual contractors to publicly state their issues.

I have seen an email begging for us to get our mates to join (nice membership revenue) to boost numbers.

I have seen a rather desperate angle by IPSE of 'as you will be busy with brexit shall we just put all this stuff on hold?'

I know there was a round table last week but I've not seen any details yet and I completed a questionnaire but haven't seen an output.

Joe public thinks us greedy contractors get loads and should be taxed the same. What are IPSE doing to lobby them and explain that we have a diff model and taxing us like them but giving us no rights is not fair?

What is IPSE doing with HMRC to explain the tool needs to be available now so contractors can calculate what it means and end contracts or renegotiate? What about the details such as if we are deemed 'caught' mid contract we have a get out clause ? What about the whole host of Qs about how their double tax model will work? What about challenging the revenue they will make and the alleged mere 500k to implement?

What about agencies and the additional workload on them and their costs?

What about the impact on the public sector with mass exodus, rate rises or additional agency costs? What is IPSE doing to show how this idea affects a large number of different stakeholders in the chain? What about costing what this means to overall PS costs and showing how that will offset the alleged extra tax? What about PR and comms and engagement each and every month to keep the pressure on?

Is the IPSE plan merely to produce one submission pre sept and hope for the best?

I'm not saying ipse doesn't have an aggressive, multi faceted plan for all this to tackle all stakeholders .....but if they have could they share some of their thoughts and progress because I don't get an immediate sense they are doing a huge amount and I've seen more from other contractor websites (which don't require a membership) and Deloitte etc on this subject.

So come on IPSE, share the battle plan!


Great post.... I'm an IPSE+ member too, would love to hear what you will be doing to support us?

Clearly we won't be setting out our plans on any public forum so it'll have to suffice to say that we'll be using evidence-based arguments, calling our members to action as and when appropriate and speaking with HMG, HMRC, HMT and politicians at the highest levels. We also work closely with all the other stakeholders - CBI, REC, APSCo, the accountancy profession, end-users &etc. This has worked in the past and may well work again this time.

Evidence is key, hence the member surveys and the call for member submissions but we've also commissioned independent research around the economic impact - HMG won't listen to pure rhetoric, but they can and do pay attention to hard evidence. We attend and organise roundtables at which HMRC receive your (very vocal) feedback. And yes, membership numbers do make a difference - the larger IPSE is the louder your voice, so getting your mates to join and get involved is no bad thing.

eek
22nd July 2016, 08:31
Clearly we won't be setting out our plans on any public forum so it'll have to suffice to say that we'll be using evidence-based arguments, calling our members to action as and when appropriate and speaking with HMG, HMRC, HMT and politicians at the highest levels. We also work closely with all the other stakeholders - CBI, REC, APSCo, the accountancy profession, end-users &etc. This has worked in the past and may well work again this time.


The Unions, low pay campaigners..... Or are you continuing to try and ignore the elephant in the room that is the fake self employment many companies use....

IPSE
22nd July 2016, 08:36
The Unions, low pay campaigners..... Or are you continuing to try and ignore the elephant in the room that is the fake self employment many companies use....

IPSE's position on exploitation is well known and we make it well known to the unions and politicians alike.

eek
22nd July 2016, 08:39
IPSE's position on exploitation is well known and we make it well known to the unions and politicians alike.

So its a continuation of the Ian Paisley approach of No, no, no....

TestMangler
22nd July 2016, 08:41
So its a continuation of the Ian Paisley approach of No, no, no....

So why have I now got a loud Norn Irish voice in my head shouting "IPSE says NO!!!!!"

Thanks for that :mad:

IPSE
22nd July 2016, 08:50
So its a continuation of the Ian Paisley approach of No, no, no....

IPSE's role is not to campaign on behalf of exploited workers - of which there are legion - but rather to campaign on behalf of contractors who are far from exploited. We have, many times, told HMRC of examples of worker exploitation and, many times, told HMG what they need to do regarding exploited workers. It's crucial that politicians see contractors as valuable contributors to UK plc and that IPSE defends our way of working - that's our raison d'être.

As you rightly point out there's the Low Pay Commission, the Trade Unions and others who can and do battle for exploited - see the current court case (https://www.theguardian.com/technology/2016/jul/19/uber-drivers-court-tribunal-self-employed-uk-employment-law) brought by Uber drivers.

youngguy
22nd July 2016, 08:54
Clearly we won't be setting out our plans on any public forum .
Why not? Why the need for secrecy? It isn't like this is a bus development opportunity where your ideas will be stolen? I'd be keen to understand more around your comment and why you feel the need to be so cloak and dagger.

I fear that if you drop your secret stuff at the last minute it will be swept under the table . Why not start asking the tough questions now to expose the lack of thought from Gov?



using evidence-based arguments.
About what?


calling our members to action .
How and when?


get involved is no bad thing.
What is it you want me to do,other than be a lone case study or recruit more members for you ?


This has worked in the past and may well work again this time.
.
I guess I will cross my fingers then.......

LondonManc
22nd July 2016, 08:55
Clearly we won't be setting out our plans on any public forum so it'll have to suffice to say that we'll be using evidence-based arguments, calling our members to action as and when appropriate and speaking with HMG, HMRC, HMT and politicians at the highest levels. We also work closely with all the other stakeholders - CBI, REC, APSCo, the accountancy profession, end-users &etc. This has worked in the past and may well work again this time.

Evidence is key, hence the member surveys and the call for member submissions but we've also commissioned independent research around the economic impact - HMG won't listen to pure rhetoric, but they can and do pay attention to hard evidence. We attend and organise roundtables at which HMRC receive your (very vocal) feedback. And yes, membership numbers do make a difference - the larger IPSE is the louder your voice, so getting your mates to join and get involved is no bad thing.

Evidence for things that haven't happened yet? Impressive, most impressive.

How about a few scenarios for, a range of people who get caught, rather than HMRC's examples of who they are doing this to catch?

If they see that there's a critical mass of skilled workers who will leave the public sector rather than get taxed to high heaven and be unable to claim T&S to use their experience from one health trust at another, HMRC might then understand the full impact and that they're using a sledgehammer rather than the intended nutcracker. If they carry on regardless, then it needs publicising that they are bringing it on themselves; I'd make a strong emphasis on the T&S because nobody likes other people paying less tax than them.

eek
22nd July 2016, 08:57
IPSE's role is not to campaign on behalf of exploited workers - of which there are legion - but rather to campaign on behalf of contractors who are far from exploited. We have, many times, told HMRC of examples of worker exploitation and, many times, told HMG what they need to do regarding exploited workers. It's crucial that politicians see contractors as valuable contributors to UK plc and that IPSE defends our way of working - that's our raison d'être.

As you rightly point out there's the Low Pay Commission, the Trade Unions and others who can and do battle for exploited - see the current court case (https://www.theguardian.com/technology/2016/jul/19/uber-drivers-court-tribunal-self-employed-uk-employment-law) brought by Uber drivers.

Given two plans, one that protects 3 million workers and impacts contractors (perceived by many people including the treasury as tax dodging ....) and one that protects a few thousand over paid contractors while making things no better or indeed worse for those 3 million workers which option do you think will be chosen..

Unless you provide options that protect both those 3 million workers and ourselves we are just going to be lost as collateral damage... If you don't grasp that pretend to be a union leader representing 100,000 outsourced public sector workers and go back and read the proposals especially the example relating to employees through a consultancy....

As LondonManc states above remember what our reputation is of undertaxed and overpaid.... Any argument needs to use other factors such as the impact T&S will have on northern authorities and offices....

IPSE
22nd July 2016, 08:59
Why the need for secrecy?

This is a public forum and FTAOD we also regard IPSE's forums as pretty much public. In general, it's probably not a great idea to broadcast plans and thereby offer the opposition insights.

eek
22nd July 2016, 09:03
This is a public forum and FTAOD we also regard IPSE's forums as pretty much public. In general, it's probably not a great idea to broadcast plans and thereby offer the opposition insights.

Them and us - oh dear....

DotasScandal
22nd July 2016, 09:36
We'll be using evidence-based arguments, calling our members to action as and when appropriate and speaking with HMG, HMRC, HMT and politicians at the highest levels. We also work closely with all the other stakeholders - CBI, REC, APSCo, the accountancy profession, end-users &etc. This has worked in the past and may well work again this time.

Evidence is key, hence the member surveys and the call for member submissions but we've also commissioned independent research around the economic impact - HMG won't listen to pure rhetoric, but they can and do pay attention to hard evidence. We attend and organise roundtables at which HMRC receive your (very vocal) feedback. And yes, membership numbers do make a difference - the larger IPSE is the louder your voice, so getting your mates to join and get involved is no bad thing.

So in a nutshell, IPSE is doing or plans to do exactly what Big Group is doing already. Yet won't join forces with Big Group. Marvellous!
:facepalm:

eek
22nd July 2016, 09:41
So in a nutshell, IPSE is doing or plans to do exactly what Big Group is doing already. Yet won't join forces with Big Group. Marvellous!
:facepalm:

:confused:

Big group is dealing with the fallout of HMRC schemes and the possible tax changes in April 2019 which supposedly mop up missing unpaid tax.

IPSE started this topic to talk about the consultation into the off payroll working in the public sector - reform of the intermediaries legislation (IR35) (https://www.gov.uk/government/consultations/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation) as published on May 26th with a consultation end date of August 18th...

If Big group are sending a response to the consultation will that is interesting but I didn't think it was the purpose of Big Group....

youngguy
22nd July 2016, 09:52
This is a public forum and FTAOD we also regard IPSE's forums as pretty much public. In general, it's probably not a great idea to broadcast plans and thereby offer the opposition insights.

But WHY? What do you think you will lose by starting to ask and lobby?

Gov is not opposition ....this is not a political leadership where it is equal and a third party (the public ) choose.

Gov have decided to do something and we need to show them the ramifications and ask the questions that show they have not understood the impact. If you leave it too late Gov can say they had no feedback or had no time to consider the feedback

Simple example
Gov: we will legislate and get more tax
Us: we will increase rates (overall cost goes up and offsets your tax profit ) or leave PS and you will have no workers .

So once again IPSE, why the secrecy?

BrilloPad
22nd July 2016, 09:55
When HMRC decide what will happen, the government just enacts it. Waste your time and money if you want.

DotasScandal
22nd July 2016, 10:00
:confused:
Big group is dealing with the fallout of HMRC schemes and the possible tax changes in April 2019 which supposedly mop up missing unpaid tax.


As per BG's mission statement:
"Our focus is on mobilising a collaborative voice to develop a strategy for resolution of the existing enquiry in a fair and appropriate way ensuring the future sustainability of the contractor profession."

As such, the scope of BG's action goes well beyond "dealing with the fallout of HMRC schemes" and has much to do with demonstrating to HMRC why it's not in their best (mid-term and long-term) interest to remove thousands of skilled contractors from the workforce by way of APN-triggered bankruptcy.
Yes, it's about closing the whole topic in a sensible manner, but it's also, perhaps more importantly, about ensuring the contractors in question can continue to work. For their own benefit, for the benefit of their clients, and for the benefit of HMRC themselves.



IPSE started this topic to talk about the consultation into the off payroll working in the public sector - reform of the intermediaries legislation (IR35) as published on May 26th with a consultation end date of August 18th...
If Big group are sending a response to the consultation will that is interesting but I didn't think it was the purpose of Big Group....
We understand that. BG is also involved with these topics. Remember it's largely IR35 that put most if not all BG members in the sorry situation to start with

This will be our last post on this thread as the intention is not to hijack IPSE's discussion.

Lance
22nd July 2016, 10:09
Am I missing something?
The IPSE OP post has the following phrase...

"an individual provides services to a public sector engager through a PSC and is doing a similar job in a similar manner to an employee, both they and their engager will be required to pay broadly the same tax and National Insurance as if they were an employee"

Surely this only effects IR35 caught contracts?
And as the employer won't want to be clobbered with NICs then they're more likely to ensure that their contractors are NOT doing a similar job in a similar manner to an employee.

Please help with my lack of understanding as I cannot see what the big deal is here.

northernladuk
22nd July 2016, 10:12
You could read all the other threads and discussions to try understand it fully?

missinggreenfields
22nd July 2016, 10:15
As per BG's mission statement:
"Our focus is on mobilising a collaborative voice to develop a strategy for resolution of the existing enquiry in a fair and appropriate way ensuring the future sustainability of the contractor profession."

As such, the scope of BG's action goes well beyond "dealing with the fallout of HMRC schemes" and has much to do with demonstrating to HMRC why it's not in their best (mid-term and long-term) interest to remove thousands of skilled contractors from the workforce by way of APN-triggered bankruptcy.

And yet to become a member you have a mandatory field "Schemes to be included in membership & appropriate dates" and must "Upload of document proving membership of scheme registered (e.g APN, Contract agreement, Notice from provider)"

If your intention is to present yourselves as broader than those who are facing an enquiry from HMRC about use of a "scheme" then you might want to consider changing that.

BrilloPad
22nd July 2016, 10:17
And yet to become a member you have a mandatory field "Schemes to be included in membership & appropriate dates" and must "Upload of document proving membership of scheme registered (e.g APN, Contract agreement, Notice from provider)"

If your intention is to present yourselves as broader than those who are facing an enquiry from HMRC about use of a "scheme" then you might want to consider changing that.

And let HMRC see their forums?

malvolio
22nd July 2016, 10:19
First, just like only a tiny tiny proportion of contractors at large frequent the CUK forums, we'd hazard that only a minority of IPSE members use / are aware of the forums at all.
Second, we understand that Big Group have approached IPSE, and that IPSE is adopting a "elephant in the room" approach to the whole matter.
And yes, this is a cause of disappointment.
My understanding is that IPSE are leaving the Big Group team, who are the real experts in this area, to fight their corner without opening a pointless second front, and are simply keeping a watching brief.

And FWIW it was me wot pointed Mr Webber and IPSE at each other in the first place...

jamesbrown
22nd July 2016, 11:35
FWIW, I'm grateful that IPSE is posting here. Inevitably, there are disagreements in various areas - these are complex matters - but we are fundamentally on the same side and have many of the same objectives. This public sector consultation is, I fear, more profound than the original introduction of IR35 (and indirectly changes the criteria, regardless of what the consultation suggests). I won't be impacted initially, but I think we all know where this is heading.

Fortunately, there is overwhelming evidence that this will negatively impact contracting businesses and their clients, so there is scope for lobbying and evidence-based arguments. This will be an important test of IPSE and all of us in responding to the consultation and making those arguments. If those arguments are put convincingly and they're ignored, it will be obvious again that this is more politics than evidence-based policy making.

eek
22nd July 2016, 11:41
FWIW, I'm grateful that IPSE is posting here. Inevitably, there are disagreements in various areas - these are complex matters - but we are fundamentally on the same side and have many of the same objectives. This public sector consultation is, I fear, more profound than the original introduction of IR35 (and indirectly changes the criteria, regardless of what the consultation suggests). I won't be impacted initially, but I think we all know where this is heading.

Fortunately, there is overwhelming evidence that this will negatively impact contracting businesses and their clients, so there is scope for lobbying and evidence-based arguments. This will be an important test of IPSE and all of us in responding to the consultation and making those arguments. If those arguments are put convincingly and they're ignored, it will be obvious again that this is more politics than evidence-based policy making.

+1 it won't effect me either as we know whats about to happen and can distance ourselves from it. Hopefully I can distance myself enough that I won't be contracting full stop....

My worry however is that the unions are seeing this as something they actively want to protect their members both in the public sector and the private sector. Unless means are suggested that ensure their members are caught by these new rules whilst we remain outside I'm certain the far louder Union voices will prevail....

nobody123
22nd July 2016, 12:23
Would the intended policy affect you, If you were contracting for a supplier e.g IBM that happens to be engaged with a PS client/project for which you are working on? Or does this only affect contractors that work direct for PS via an Agency?

jamesbrown
22nd July 2016, 14:07
+1 it won't effect me either as we know whats about to happen and can distance ourselves from it. Hopefully I can distance myself enough that I won't be contracting full stop....

My worry however is that the unions are seeing this as something they actively want to protect their members both in the public sector and the private sector. Unless means are suggested that ensure their members are caught by these new rules whilst we remain outside I'm certain the far louder Union voices will prevail....

Agreed.

Just listening to the PAC on the rollout of UC, over some lunch (:nerd) and the Director General was asked what keeps him awake at night. IT resourcing :laugh. What's UC supposed to save? Something like 20B+ and a 5B opportunity cost for each year of delay (IIRC). Good luck with that.

eek
22nd July 2016, 14:25
Agreed.

Just listening to the PAC on the rollout of UC, over some lunch (:nerd) and the Director General was asked what keeps him awake at night. IT resourcing :laugh. What's UC supposed to save? Something like 20B+ and a 5B opportunity cost for each year of delay (IIRC). Good luck with that.

DWP have brought things in house with staff / contractors rather than leaving it to consultancies to try and improve project delivery

MrMarkyMark
22nd July 2016, 14:27
FTFY


DWP have brought things in house with staff / contractors rather than leaving it to consultancies to try and make sure that something tangible actually gets delivered, rather than just reams of, out of date, documentation

eek
22nd July 2016, 14:36
FTFY

I actually delivered. But it did require me to wait for the conference call where the 4 layers of management above me weren't on it to pull a fast one and organize a visit to their offices the following day before anyone could stop it....

MrMarkyMark
22nd July 2016, 14:39
I actually delivered. But it did require me to wait for the conference call where the 4 layers of management above me weren't on it to pull a fast one and organize a visit to their offices the following day before anyone could stop it....

Difficult in anything PS related.
I have seen consultancies just not do anything though and was suggesting that it is just better not to have them involved.

Seen the same in the private sector, also. You have to push really hard to get things done, way of the world these days :eyes

northernladuk
22nd July 2016, 14:39
Would the intended policy affect you, If you were contracting for a supplier e.g IBM that happens to be engaged with a PS client/project for which you are working on? Or does this only affect contractors that work direct for PS via an Agency?

I doubt it as your client would be IBM. You would be seen as an employee of theirs on site. It's highly likely they would be engaged through Gcloud or other framework and delivering a service so not as a bum on seat contractor to the PS.

MrMarkyMark
22nd July 2016, 14:49
I doubt it as your client would be IBM. You would be seen as an employee of theirs on site. It's highly likely they would be engaged through Gcloud or other framework and delivering a service so not as a bum on seat contractor to the PS.

+1, that's how I saw it also.

jamesbrown
22nd July 2016, 15:47
Would the intended policy affect you, If you were contracting for a supplier e.g IBM that happens to be engaged with a PS client/project for which you are working on? Or does this only affect contractors that work direct for PS via an Agency?

Probably not, but it's impossible to completely dismiss at this stage. Part of the consultation focused on the boundary between the PS and the private sector w/r to private sector suppliers. Personally, I think that would be difficult to enforce without a global application across the public and private sectors, so the boundary will probably be quite tight around the PS if they proceed.

DotasScandal
22nd July 2016, 15:54
Personally, I think that would be difficult to enforce without a global application across the public and private sectors

Does anybody really think this will stop at the PS? Seriously? :rolleyes:

missinggreenfields
22nd July 2016, 16:33
Probably not, but it's impossible to completely dismiss at this stage. Part of the consultation focused on the boundary between the PS and the private sector w/r to private sector suppliers. Personally, I think that would be difficult to enforce without a global application across the public and private sectors, so the boundary will probably be quite tight around the PS if they proceed.

I think that by not having the boundary, it makes it much easier to roll this out everywhere.

Rather than just being PSC > client or PSC > agency > client, I wouldn't be surprised if the target is PSC > anyone / any number of entities, including professional service companies / SI > public sector. From there, it's dead easy to say "these guys manage it for public sector work, so everyone can do it".

:(

eek
22nd July 2016, 16:40
Probably not, but it's impossible to completely dismiss at this stage. Part of the consultation focused on the boundary between the PS and the private sector w/r to private sector suppliers. Personally, I think that would be difficult to enforce without a global application across the public and private sectors, so the boundary will probably be quite tight around the PS if they proceed.

The example reads as based on the building you are in. That may or may not be an issue for the large consultancies for the medium size ones such as say sopra steria it could be when they provide a team as bums on seats at the end client.

The problem is that we just don't know and it's not worth the risk - so the advice has to be to get out now before everyone discovers what is happening and it becomes a stampede

eek
22nd July 2016, 16:41
I think that by not having the boundary, it makes it much easier to roll this out everywhere.

Rather than just being PSC > client or PSC > agency > client, I wouldn't be surprised if the target is PSC > anyone / any number of entities, including professional service companies / SI > public sector. From there, it's dead easy to say "these guys manage it for public sector work, so everyone can do it".

:(

I doubt it's that broad but it's definitely possible to read it that way. It's equally possible that HMRC don't understand the consequences of the examples they have used, we need to wait and see.

jamesbrown
22nd July 2016, 17:45
Does anybody really think this will stop at the PS? Seriously? :rolleyes:

No, I don't think anyone imagines that. Obviously, they will deny it without ministerial approval for broader application, but any perceived successes in the PS rollout will be used to justify a broader application (but the reverse probably isn't true :laugh).

WordIsBond
23rd July 2016, 06:48
If facts supposedly work with HMRC, can someone please convince them to stop using the £400 million number which was calculated before the dividend tax hike?

And if they won't stop using it, can we at least convince a few MPs to start pouring scorn on them publicly for this until they do? It's just dishonest propaganda.

THAT would be something I would think IPSE COULD accomplish.

jamesbrown
23rd July 2016, 09:02
BBC brings 85 presenters on staff after being told to ditch personal service companies (http://www.telegraph.co.uk/news/2016/07/22/bbc-brings-85-presenters-on-staff-after-being-told-to-ditch-pers/)

MrMarkyMark
23rd July 2016, 09:11
BBC brings 85 presenters on staff after being told to ditch personal service companies (http://www.telegraph.co.uk/news/2016/07/22/bbc-brings-85-presenters-on-staff-after-being-told-to-ditch-pers/)

About time really. Interesting some still passed a self employment "test".

Loved this bit


Jeremy Paxman ,the former Newsnight presenter, who had his own service company, said the BBC “required me to form a company if I wanted to continue to present Newsnight. They claimed they had been told to do so by HMRC."

malvolio
23rd July 2016, 09:25
If facts supposedly work with HMRC, can someone please convince them to stop using the £400 million number which was calculated before the dividend tax hike?

And if they won't stop using it, can we at least convince a few MPs to start pouring scorn on them publicly for this until they do? It's just dishonest propaganda.

THAT would be something I would think IPSE COULD accomplish.
They've been told. They choose not to listen. Go figure...

mudskipper
23rd July 2016, 09:26
BBC brings 85 presenters on staff after being told to ditch personal service companies (http://www.telegraph.co.uk/news/2016/07/22/bbc-brings-85-presenters-on-staff-after-being-told-to-ditch-pers/)

And that is how the problem should be dealt with IMO.

MrMarkyMark
23rd July 2016, 09:30
And that is how the problem should be dealt with IMO.

Exactly, except the plan is to make people pay full tax with no employment rights or benefits. :eyes

Fred Bloggs
23rd July 2016, 10:03
Exactly, except the plan is to make people pay full tax with no employment rights or benefits. :eyesThat's simply what IR35 set out to achieve. This is just addressing the failure of that legislation.

eek
23rd July 2016, 11:24
Exactly, except the plan is to make people pay full tax with no employment rights or benefits. :eyes

The tax is all HMRC cares about. To them the other bits are utterly irrelevant

westtester
25th July 2016, 10:22
A short while back - before all the Brexit furore - HMRC announced worrying plans to radically change the way IR35 works for public sector engagements. IPSE will robustly fight the plans announced in the consultation, published on May 26th, which the government intends to come into force from April 2017.

What exactly is government proposing?

The consultation document (https://www.gov.uk/government/consultations/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation) puts forward a set of proposals that will change the way IR35 works for public sector engagements. In essence the government wants public sector organisations or the agency to determine the IR35 status of engagements and then, if caught, apply taxes as they would for their employees, through the RTI system. This paragraph from page six sums it up:



For more details and to keep up-to-date on the consultation and IPSE's response to it, visit www.ipse.co.uk - we'll also post here as things develop.

The MoD has already adopted the legislation, causing me and pretty much every other contractor on site to decline upcoming renewals which would have forced us all within IR35 regardless of working conditions or contract reviews. This idea of a consultation is laughable.

Any lobbying for PS is going to be too late I fear and your objective should be making sure this doesn't get extended to the private sector.

DotasScandal
25th July 2016, 10:50
The MoD has already adopted the legislation, causing me and pretty much every other contractor on site to decline upcoming renewals which would have forced us all within IR35 regardless of working conditions or contract reviews. This idea of a consultation is laughable.

This.
Those who took part (and IPSE did not) in the consultation on APNs (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/298554/Summary_of_responses_TMTA_27032014_Final_v1.0.pdf) back in in Q1 2014 (how times flies) know that HMRC considers such consultations merely a "look, we let them express their opinions" PR exercise. They'll push through whatever they want to push through, regardless of what you say.

eek
25th July 2016, 10:58
This.
Those who took part (and IPSE did not) in the consultation on APNs (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/298554/Summary_of_responses_TMTA_27032014_Final_v1.0.pdf) back in in Q1 2014 (how times flies) know that HMRC considers such consultations merely a "look, we let them express their opinions" PR exercise. They'll push through whatever they want to push through, regardless of what you say.

But IPSE won their T&S battle*

* Nope the unions got exactly what they wanted - it also moved IR35 back up the agenda exactly as HMRC wanted - which is why we are here now...

malvolio
25th July 2016, 12:03
This.
Those who took part (and IPSE did not) in the consultation on APNs (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/298554/Summary_of_responses_TMTA_27032014_Final_v1.0.pdf) back in in Q1 2014 (how times flies) know that HMRC considers such consultations merely a "look, we let them express their opinions" PR exercise. They'll push through whatever they want to push through, regardless of what you say.
IPSE aren't directly in the APN fight, as has been said several times. However, quite a view of those participants (ICAEW and E&Y for example) do work closely with IPSE and are well aware of the issues.

And it's funny that, as you quite rightly point out, most consultations are ignored then people complain loudly when IPSE and others can't get changes made. Heigh ho...

DotasScandal
25th July 2016, 14:48
And it's funny that, as you quite rightly point out, most consultations are ignored then people complain loudly when IPSE and others can't get changes made. Heigh ho...
These "consultations" are theatre all right (especially when the minister can pull stunts like this and no one bats an eye (https://www.dotas-scandal.org/gauke-performs-magic-trick-transforms-847-responses-into-20-and-lies-to-parliament-in-the-process/)), but that is not to say that there are no actual levers that IPSE members can reasonably expect IPSE to action behind closed doors. When there are few results to show, members have a right to be disappointed. It's understandable.

Going back on topic, most worrying to us is that IPSE seems to be figthing last year's war here (see westtester's post above).

youngguy
26th July 2016, 06:51
EDITED

Hobosapien
26th July 2016, 07:08
“We have heard a lot of commentators saying that this is going to apply to the private sector. We can confirm there are no plans to do so.

It's definite then. :rollin:


“The reality is that the private sector is a very different beast to the public sector in a lot of ways, so it doesn’t necessarily follow that something that works in the public sector will work in the private sector.”


:rollin: :rollin: :rollin: There's all the ammo you need AIPSE to go after these morons. Contracting is a very different beast to permanent employment so doesn't necessary follow that what works in the contracting sector will work in the employment sector.

What a cluster**** this is going to be. Agencies paying deemed tax payments (in higher tax bracket just to be sure) for all PS contracts regardless of reality (just to be sure) and the contractor having to reclaim any overpaid taxes each year (good luck with that :laugh). Only a mug will entertain PS work after this.

I'm so glad my last ever PS contract is only weeks away from ending. :banana:

WordIsBond
26th July 2016, 07:25
They've been told. They choose not to listen. Go figure...
Did you miss the part where I said "if they won't stop using it"?

Look, this is mind-numbingly obvious. They came up with the figure before the dividend tax increase. Since then, everyone who is allegedly dodging IR35 is paying more tax. Real money. A ten year old could understand, "Hey, those people were dodging taxes, £400 million, but Osbo increased the tax they pay, so the £400 million will be LESS now." This is not a hard concept.

The reason THEY choose not to listen is probably because they can't verify the number, so they also can't say how much it changed.

I was more interested in the "pour scorn" part of the equation. (I have some spare scorn for them if you need to borrow any.) Every time that number appears in the press or any public statement, it needs to be mocked unmercifully. "Any ten year old knows that's wrong." Any reporter who reports that number should be contacted by a reputable organisation like IPSE, and told, "These numpties can't even do maths. Want to hear about it?" Every time it appears, IPSE should contact their insider friends in government and say, "That's a lying number. These people are idiots. When are you going to do anything about them?"

Every time, it should be documented, and when there is a nice long list, go to the new Chancellor and the Self Employment Czar (or whatever they call him these days) and say, "Your government is consistently lying to the public, it has gone on long enough that we believe it is an intentional and malicious coordinated campaign, we're going to go to the press with this, and we're going to start bringing it up IN COURT on IR35 cases to show that HMRC is engaging in a dishonest, adversarial approach to IR35, and that their subjective evaluations cannot be relied upon. That's what happens if you don't fix this."

IPSE may have cozy relationships with some people, but you can't have cozy relationships with people who are lying about your issues and know they are and won't fix it. And not everyone in positions of power is willing to lie for HMRC. If IPSE isn't ready to go to war on something that is an obvious question of fact and is being used repeatedly in propaganda against contractors, why does IPSE actually exist as a lobbying organisation? Opinions are opinions, strategies are strategies, there can be multiple views on the right solution to problems, but facts are facts, and no one has the right to have their own invented facts be treated as real.

WordIsBond
26th July 2016, 07:30
It's definite then. :rollin:

LOL. It's not even definite it will happen in the public sector, because they still don't have a working on-line tool. And come next January or February, if they still don't have it, there just might be an announcement that the public sector rollout will be delayed.

Maybe they can get it done if they bring in an outside specialist to do it. Wonder if they'll try to exercise SDC or not....

youngguy
26th July 2016, 07:35
Only a mug will entertain PS work after this.


Agreed, but I'd love to see all PS contractors up their rates, demand contract changes to give get out clauses etc which would resuklt in no overall change to how much Gov gets in tax.

Forgotmylogin
26th July 2016, 07:47
LOL. It's not even definite it will happen in the public sector, because they still don't have a working on-line tool. And come next January or February, if they still don't have it, there just might be an announcement that the public sector rollout will be delayed.

Maybe they can get it done if they bring in an outside specialist to do it. Wonder if they'll try to exercise SDC or not....

Yes, they could bring someone in. And we've all seen the HMRC example of how that person needs to ensure they stay out of SDC. All they can be told is "We need an online tool" and then the specialist can make the rest up by themselves and put it live when finished.

Hobosapien
26th July 2016, 07:51
LOL. It's not even definite it will happen in the public sector....

That bit was satirical. See how many times have the government said they have no plans to do something then almost immediately do it.

Hobosapien
26th July 2016, 07:58
Agreed, but I'd love to see all PS contractors up their rates, demand contract changes to give get out clauses etc which would resuklt in no overall change to how much Gov gets in tax.


If that was likely and feasible it would already be happening to offset the risk of the IR35 tax.

Besides it's not just the financial impact but all the hassle with the new paper trail, such as how it will impact ltd company activity and accounts if there's this pre-invoice payment being taken by the agency.

LondonManc
26th July 2016, 08:10
Agreed, but I'd love to see all PS contractors up their rates, demand contract changes to give get out clauses etc which would resuklt in no overall change to how much Gov gets in tax.

Bless. You're assuming contractors understand the implications of being inside IR35.

westtester
26th July 2016, 08:21
Bless. You're assuming contractors understand the implications of being inside IR35.

If they don't now, then the first demand for a deemed payment is likely to make them look into it.

DotasScandal
26th July 2016, 08:39
Every time that number appears in the press or any public statement, it needs to be mocked unmercifully. "Any ten year old knows that's wrong." Any reporter who reports that number should be contacted by a reputable organisation like IPSE, and told, "These numpties can't even do maths. Want to hear about it?" Every time it appears, IPSE should contact their insider friends in government and say, "That's a lying number. These people are idiots. When are you going to do anything about them?"

Every time, it should be documented, and when there is a nice long list, go to the new Chancellor and the Self Employment Czar (or whatever they call him these days) and say, "Your government is consistently lying to the public, it has gone on long enough that we believe it is an intentional and malicious coordinated campaign, we're going to go to the press with this, and we're going to start bringing it up IN COURT on IR35 cases to show that HMRC is engaging in a dishonest, adversarial approach to IR35, and that their subjective evaluations cannot be relied upon. That's what happens if you don't fix this."

IPSE may have cozy relationships with some people, but you can't have cozy relationships with people who are lying about your issues and know they are and won't fix it. And not everyone in positions of power is willing to lie for HMRC. If IPSE isn't ready to go to war on something that is an obvious question of fact and is being used repeatedly in propaganda against contractors, why does IPSE actually exist as a lobbying organisation?

Excellent points. Thanks for this post.

DotasScandal
26th July 2016, 08:49
Your government is consistently lying to the public, it has gone on long enough that we believe it is an intentional and malicious coordinated campaign"

Again, something that APN'ers will be very familiar with.
How often does your Government lie to you? (https://www.dotas-scandal.org/how-often-does-your-government-lie-to-you/)

The lies DO get debunked on a regular basis by various parties, the problem is that this info stays confined to specialist blogs or the professional press - to HMRC's delight no doubt.
IPSE does have the reach and size necessary to crack the can of worms open in earnest, but maybe they want to stay "cosy" with whoever they are "cosy" with. And if that's the case, that is a problem.

LondonManc
26th July 2016, 09:05
If they don't now, then the first demand for a deemed payment is likely to make them look into it.

My point entirely. I don't think you'll see the full fall out on this until mid-summer 2017.

IPSE
26th July 2016, 09:30
Again, something that APN'ers will be very familiar with.
How often does your Government lie to you? (https://www.dotas-scandal.org/how-often-does-your-government-lie-to-you/)

The lies DO get debunked on a regular basis by various parties, the problem is that this info stays confined to specialist blogs or the professional press - to HMRC's delight no doubt.
IPSE does have the reach and size necessary to crack the can of worms open in earnest, but maybe they want to stay "cosy" with whoever they are "cosy" with. And if that's the case, that is a problem.

Agreed, we should attack their figures again - no-one really understands HMRCs numbers - including the House of Lords Select Committee on Personal Service Companies (http://www.publications.parliament.uk/pa/ld201314/ldselect/ldpersonal/160/16003.htm) . HMRC never give any explanation where they come from or try to validate them.

In the current consultation document it says:

“However, evidence shows there is widespread non-compliance with the intermediaries legislation. The government estimates only one in ten PSCs who should be operating the rules on at least part of their income are doing so. This non-compliance is estimated to cost the Exchequer £440m in tax year 2016 to 2017. This figure takes into account the changes to the taxation of dividends from April 2016.” [my emphasis]

We will certainly ask them how they arrived at this figure but I think it’s difficult for us to take the line that government is ‘lying’. We can say we disagree/don’t understand how they’ve made that calculation, but if we say they are lying it'd probably make us look like crazy conspiracy theorists.

We do agree with the essence of your point though – that IPSE should challenge these figures.

eek
26th July 2016, 09:38
Agreed, we should attack their figures again - no-one really understands HMRCs numbers - including the House of Lords Select Committee on Personal Service Companies (http://www.publications.parliament.uk/pa/ld201314/ldselect/ldpersonal/160/16003.htm) . HMRC never give any explanation where they come from or try to validate them.

In the current consultation document it says:

“However, evidence shows there is widespread non-compliance with the intermediaries legislation. The government estimates only one in ten PSCs who should be operating the rules on at least part of their income are doing so. This non-compliance is estimated to cost the Exchequer £440m in tax year 2016 to 2017. This figure takes into account the changes to the taxation of dividends from April 2016.” [my emphasis]

We will certainly ask them how they arrived at this figure but I think it’s difficult for us to take the line that government is ‘lying’. We can say we disagree/don’t understand how they’ve made that calculation, but if we say they are lying it'd probably make us look like crazy conspiracy theorists.

We do agree with the essence of your point though – that IPSE should challenge these figures.

Perhaps you could ask why the figure didn't change between 1999 (http://www.v3.co.uk/v3-uk/news/2000499/government-exaggerating-ir35-tax-yield-claims-smith-williamson)and 2016-17 when the dividend tax clearly should have an impact on the difference....

MrMarkyMark
26th July 2016, 09:44
Perhaps you could ask why the figure didn't change between 1999 (http://www.v3.co.uk/v3-uk/news/2000499/government-exaggerating-ir35-tax-yield-claims-smith-williamson)and 2016-17 when the dividend tax clearly should have an impact on the difference....

Good point :)

youngguy
26th July 2016, 09:45
Bless. You're assuming contractors understand the implications of being inside IR35.

Fair! Most I've spoken to don't know about IR35_let alone this coming change....

youngguy
26th July 2016, 09:50
If that was likely and feasible it would already be happening to offset the risk of the IR35 tax.

Besides it's not just the financial impact but all the hassle with the new paper trail, such as how it will impact ltd company activity and accounts if there's this pre-invoice payment being taken by the agency.

Agreed. I fully expect agencies and accountants to factor the extra costs into their prices .

Oversimplification I know but if extra costs to a contractor is, say, 20% they can then say to the PS 'My rate is now x + 20% take it or leave it'. If there is a mass exodus and demand/supply alters then PS depts nay have no choice.

DotasScandal
26th July 2016, 09:51
We can say we disagree/don’t understand how they’ve made that calculation, but if we say they are lying it'd probably make us look like crazy conspiracy theorists.

Seriously, that's what you are afraid of?
What your members expect from you is that you use your resources to turn conspiracy theory into conspiracy FACT. Produce a solid alternative economic model. HMRC can only continue peddling their narrative year in and year out because they are never called on their BS. Expose it and then you'll really be doing your job. Sometimes you have to say thing as they are.

youngguy
26th July 2016, 09:54
Agreed, we should attack their figures again - no-one really understands HMRCs numbers - including the House of Lords Select Committee on Personal Service Companies (http://www.publications.parliament.uk/pa/ld201314/ldselect/ldpersonal/160/16003.htm) . HMRC never give any explanation where they come from or try to validate them.

In the current consultation document it says:

“However, evidence shows there is widespread non-compliance with the intermediaries legislation. The government estimates only one in ten PSCs who should be operating the rules on at least part of their income are doing so. This non-compliance is estimated to cost the Exchequer £440m in tax year 2016 to 2017. This figure takes into account the changes to the taxation of dividends from April 2016.” [my emphasis]

We will certainly ask them how they arrived at this figure but I think it’s difficult for us to take the line that government is ‘lying’. We can say we disagree/don’t understand how they’ve made that calculation, but if we say they are lying it'd probably make us look like crazy conspiracy theorists.

We do agree with the essence of your point though – that IPSE should challenge these figures.

Did you not get the memo? It's a done deal. Your lobbying is quite probably too little and too late. I sincerely hope to be proven wrong and if IPSE have a smoking gun they are going to unveil I will apologise!

westtester
26th July 2016, 10:03
Agreed. I fully expect agencies and accountants to factor the extra costs into their prices .

Oversimplification I know but if extra costs to a contractor is, say, 20% they can then say to the PS 'My rate is now x + 20% take it or leave it'. If there is a mass exodus and demand/supply alters then PS depts nay have no choice.

The question of increased rates was raised at my last site and not an option. So a mass exodus is happening instead from the end of August when the new rules are being enforced. Interestingly, some permies were also reconsidering their position at the prospect of having to pick up the tulip that contractors normally do.

missinggreenfields
26th July 2016, 10:26
The question of increased rates was raised at my last site and not an option. So a mass exodus is happening instead from the end of August when the new rules are being enforced. Interestingly, some permies were also reconsidering their position at the prospect of having to pick up the tulip that contractors normally do.

The more people that do this the better.

Although then we'll be complaining about private sector rates dropping because of a saturated market.

DotasScandal
26th July 2016, 10:32
Interestingly, some permies were also reconsidering their position at the prospect of having to pick up the tulip that contractors normally do.

But but but.... I thought permies and contractors are doing the exact same job? (HMRC :wave: told me so)

Simply put, It's gonna be unintented consequences galore - Same as every time HMRC forces through a short-sighted, cash grab-oriented policy.

These morons just never learn.

DonkeyRhubarb
26th July 2016, 12:23
This non-compliance is estimated to cost the Exchequer £440m in tax year 2016 to 2017.

We will certainly ask them how they arrived at this figure

Might be worth an FOI request. They'd be hard pressed to refuse when the estimate has been touted in a public document.
https://www.whatdotheyknow.com

eek
26th July 2016, 12:57
Might be worth an FOI request. They'd be hard pressed to refuse when the estimate has been touted in a public document.
https://www.whatdotheyknow.com

:rollin:

I'm still wait for a response to the number of people paid via either an umbrella or limited company (i.e. just the grand total information from the agency payment regulations)....

Given that I could tell them what the sql query would be the claim that it would be too expensive really doesn't wash. But that is the response I received...

DonkeyRhubarb
26th July 2016, 13:08
FOI - £440m PSC non-compliance (http://www.whatdotheyknow.com/request/ps440m_psc_non_compliance)

teapot418
26th July 2016, 14:17
Running figures through a calculator - £400 a day, 44 weeks a year, 6K pension contributions you end up with around £10K a year extra tax liability if IR35 caught (rough figures)

So that would be 44,000 PSCs who should be'IR35 caught' but not declaring themselves as such. According to the doc, 10% of those that should be are, so that's a total of 49,000 IR35 caught PSCs - back of fag packet calculation.

From previous discussion doc, there are 265,000 PSCs.

I haven't got a gut feel for whether 49,000 of 265,000 is too high, too low or about right - any thoughts?

LondonManc
26th July 2016, 14:30
Running figures through a calculator - £400 a day, 44 weeks a year, 6K pension contributions you end up with around £10K a year extra tax liability if IR35 caught (rough figures)

So that would be 44,000 PSCs who should be'IR35 caught' but not declaring themselves as such. According to the doc, 10% of those that should be are, so that's a total of 49,000 IR35 caught PSCs - back of fag packet calculation.

From previous discussion doc, there are 265,000 PSCs.

I haven't got a gut feel for whether 49,000 of 265,000 is too high, too low or about right - any thoughts?

What's a PSC?

teapot418
26th July 2016, 14:32
What's a PSC?

I fear that battle is all but lost.

teapot418
26th July 2016, 14:54
Running figures through a calculator - £400 a day, 44 weeks a year, 6K pension contributions you end up with around £10K a year extra tax liability if IR35 caught (rough figures)

So that would be 44,000 PSCs who should be'IR35 caught' but not declaring themselves as such. According to the doc, 10% of those that should be are, so that's a total of 49,000 IR35 caught PSCs - back of fag packet calculation.

From previous discussion doc, there are 265,000 PSCs.

I haven't got a gut feel for whether 49,000 of 265,000 is too high, too low or about right - any thoughts?


Ah, from the original discussion document



Whilst many PSCs would not fall within the legislation because the worker would properly be
regarded as self-employed, the government would still expect to see a larger increase in the
number of people paying tax and NICs under IR35. In 2011-12 around 10,000 people paid tax
under IR35, an estimated 10% of those who should have paid tax on at least part of the
income their PSC receives under the legislation.

So they think 100,000 should be 'caught' (an extra 90,000) - in which case their estimate of additional tax take seems low...

missinggreenfields
26th July 2016, 16:12
Running figures through a calculator - £400 a day, 44 weeks a year, 6K pension contributions you end up with around £10K a year extra tax liability if IR35 caught (rough figures)

So that would be 44,000 PSCs who should be'IR35 caught' but not declaring themselves as such. According to the doc, 10% of those that should be are, so that's a total of 49,000 IR35 caught PSCs - back of fag packet calculation.

From previous discussion doc, there are 265,000 PSCs.

I haven't got a gut feel for whether 49,000 of 265,000 is too high, too low or about right - any thoughts?

HMRC say that this will affect 20000 PSCs, and raise £400 million. So that means that every PSC will be stung for an extra £20000 for those numbers to add up.

But that doesn't factor in the cost of the tribunals, staffing, appeals, tax repayment, complexity etc that this will bring in. The numbers don't add up, but they never do.

teapot418
26th July 2016, 16:33
HMRC say that this will affect 20000 PSCs, and raise £400 million. So that means that every PSC will be stung for an extra £20000 for those numbers to add up.

But that doesn't factor in the cost of the tribunals, staffing, appeals, tax repayment, complexity etc that this will bring in. The numbers don't add up, but they never do.

No, I don't think they do - they say non-compliance "costs" £440 million. I don't believe they're suggesting that this proposal would recover £440 million.

malvolio
26th July 2016, 18:43
No, I don't think they do - they say non-compliance "costs" £440 million. I don't believe they're suggesting that this proposal would recover £440 million.
The £440m has been around for years. When IPSE got the real numbers, it was a tiny percentage of that. It's another of those pointless numbers that HMRC invents to justify their existence, where they add up the "lost" tax revenue caused by people using things like their personal allowances and other entirely sensible measures.

There's a reason I don't pay full employee PAYE and NICs on MyCo's income: it's because MyCo is not an employee.

Mordac
26th July 2016, 20:07
The £440m has been around for years. When IPSE got the real numbers, it was a tiny percentage of that. It's another of those pointless numbers that HMRC invents to justify their existence, where they add up the "lost" tax revenue caused by people using things like their personal allowances and other entirely sensible measures.

There's a reason I don't pay full employee PAYE and NICs on MyCo's income: it's because MyCo is not an employee.

Or we could just do a "Sir Shifty" and flog the company for a quid. Which wouldn't be nice, but wouldn't be illegal...

SueEllen
26th July 2016, 20:34
The £440m has been around for years. When IPSE got the real numbers, it was a tiny percentage of that. It's another of those pointless numbers that HMRC invents to justify their existence, where they add up the "lost" tax revenue caused by people using things like their personal allowances and other entirely sensible measures.

There's a reason I don't pay full employee PAYE and NICs on MyCo's income: it's because MyCo is not an employee.

So HMRC wants contractors going down the job centre and claiming JSA (and any associated benefits) every time we have a break between contracts? Sounds a bit like the DVLA and their tax discs.

Wombat14
26th July 2016, 21:58
I noted something which might be useful:


HMRC has already confirmed in its consultation document that it will be bound by the decision determined by the tool. However, Horswill went on to suggest that the tool would be able to replicate the outcome that case law judges would issue in court.

“The questions that we ask will be based on case law. We are confident in the expertise that we have in house and we believe we will be able to ask a set number of questions and get a result that is almost certainly what the courts and the tribunals would come out with.”

Philip Horswill is the HMRC rep quoted in the article.

A couple of things come to mind on reading that quote:

1) The obvious point is that we/IPSE/interested parties will presumably be able to run historic tribunal cases through this tool to see whether or not it does indeed spit out the same end results. This will probably not be terribly helpful (though worth a look anyway) because we know that HMRC cherry-pick their cases. However:

2) We will collectively have lots of cases where HMRC have opened an IR35 investigation and chosen not to take it to a tribunal (e.g. cases where the contractor had IR35 insurance and HMRC would have had to do some actual work). We could run the facts of those contracts through the tool as well. This will lead to one of two outcomes:

a) The verdict of the tool is "outside IR35". Great! Perhaps this is a genuinely excellent bit of software development - well done Hector! I'm sure that this is the excellent outcome that we are all confidently expecting.

b) The verdict of the tool is "inside IR35". Well hang on a minute, HMRC looked diligently at these cases with full consideration of applicable legislation, and concluded that there was not sufficient prospect of victory to justify proceeding to tribunal. But the tool is providing a different result. So is the tool wrong, or did HMRC make the wrong decision in all of those cases? And in either case, Mr Horswill's confidence in HMRC's expertise in these matters is demonstrably misplaced.

No doubt (b) is highly unlikely to occur, but I think that IPSE (with input from the records of helpful solicitors such as B&C) should conduct this exercise on the remote off-chance that Mr Horswill's team is not quite as expert as he believes.

eek
26th July 2016, 22:09
The thing to remember is that HMRC are trying to get new rules here. They have continually lost ever time an ir35 case ends up looking at substitution and mutual obligation. As such they don't want those rules in their perfect ir35 world.

Wombat14
26th July 2016, 22:21
You're right, of course, I'm sure they would love to establish new rules. But their consultation paper suggests that they're not doing that, they're only changing the means by which those rules are applied:


The basis on which the rules are applied to determine whether a worker would have been an employee if engaged directly is not changing. This is the case for engagements with both private and public sector clients. The new rules move the liability to make the determination about whether the intermediaries rules apply, and the associated tax liability if so, from the PSC to the public sector end-client or agency or other third party closest in the chain to the PSC if there is one.

And:


To provide greater clarity and certainty HMRC has developed a new simplified process using the current employment status rules which will make it easier to make a decision on an engagement. This will be supported by a digital tool to provide upfront certainty.

It's entirely possible that I'm missing something, though.

jamesbrown
26th July 2016, 22:56
It's entirely possible that I'm missing something, though.

Yes, the consultation proposes that one of two preconditions must be passed before engagers conduct the online test. This is a de facto tightening. Working practices that might win a tribunal case will be screened, a priori, as a fail. So you see that, regardless of the word collage they present in this consultation, the reality is transparently different. Moreover, no one will ever know or care, because none of those false positives will make it to a tribunal.

Yampy
27th July 2016, 00:15
I am quite new to contracting so forgive me if this has been covered before. These proposed changes seem to be aimed at PSC's. The general definition of a PSC is 'a limited company that typically has a sole director, the contractor, who owns most or all of the shares'. Would it help the situation if the company business was diversified to include managing a few rental properties with my wife employed to manage them and made a director and shareholder. Would this mean, in effect, that the company would no longer be a PSC hence out of scope for public sector tax changes

northernladuk
27th July 2016, 00:19
I am quite new to contracting so forgive me if this has been covered before. These proposed changes seem to be aimed at PSC's. The general definition of a PSC is 'a limited company that typically has a sole director, the contractor, who owns most or all of the shares'. Would it help the situation if the company business was diversified to include managing a few rental properties with my wife employed to manage them and made a director and shareholder. Would this mean, in effect, that the company would no longer be a PSC hence out of scope for public sector tax changes

Erm.. If it were that easy do you think there would be such a long thread with IPSE and many other senior posters discussing it?

Yampy
27th July 2016, 00:35
Erm.. If it were that easy do you think there would be such a long thread with IPSE and many other senior posters discussing it?

I take that's a big fat no then :ohwell

jamesbrown
27th July 2016, 01:27
I take that's a big fat no then :ohwell

There's no legal definition of a PSC and there's no legislation, existing or proposed, that depends on one. Indeed, the whole point of IR35 (the Intermediaries legislation) is to look through any intermediaries to understand the "true" relationship between the contractor and end client.

Hobosapien
27th July 2016, 08:31
PSC's are required to be sole director/shareholder according to some agencies:

Taken from another thread (http://forums.contractoruk.com/business-contracts/105145-agency-stipulating-sole-director-ownership-ltd-4.html):


‘XXXX have strict compliance policies and require all contractors operating through their own limited company to comply with applicable law. XXXX’ compliance department works alongside XXXX’ lawyers and tax advisors to set and enforce minimum standards which we expect all our own limited contractors to meet.

One of these minimum standards is that each own limited company contractor is the sole director and shareholder of their own limited company this is because multiple directors or shareholders may be an indicator that a contractor is operating a tax avoidance scheme. The correct amount of tax depends on whether the individual genuinely controls the limited company they offer their services through, if the individual is not the sole director or shareholder of the limited company then this suggests that they have split control over the company and should be paying a higher rate of tax (equivalent to that of an employee).

Tax debt transfer provisions under the Income Tax (Earnings and Pensions) Act (as amended) means that the tax authorities may try to recover the tax the limited company has failed to pay from XXXX in certain circumstances. This is not a risk that XXXX can afford to take which is why we have a sole shareholder and director requirement. ‘

So all this risk aversion by the agencies is easy to see that there won't even be a need for a new online assessment tool as it will never get that far and the agencies will default to this 'cannot take the risk' position and make all PS contracts fall within the new rules of PAYE/NI RTI and whatever other bollox is foisted upon them.

Avoiding the public sector from April 2017 is unlikely to be enough as it inevitably will only be a matter of time before it's also applied to the private sector, and maybe some agencies will do so ahead of actually being required to just to make their lives 'easier' and 'derisked' in their eyes, as seen by the MOD feedback.

Personally I'm considering my options for next year as far as non-contracting goes. Seems like a good time to go and do something totally different when my current contract ends soon. That or change my title from contractor to consultant, charge 5 times as much and go for government tenders like the rest of the troughers. :smokin

fidot
27th July 2016, 13:31
It's entirely possible that I'm missing something, though.

That they might be lying ?

quackhandle
28th July 2016, 13:41
Interesting thread - should be a sticky. :wink

Come next April I think your going to have a number of clued up contractors (probably regular posters here, or have come via here) who will understand what is happening and walk (if they haven't already done so) and avoid PS gigs entirely.

Then you'll have the newbies who don't know tulip from tulipola or experienced ones who just can't be bothered with it all. (I've met a few, been contracting for many years but they just don't care about IR35). The noobies they'll go along blindly, think, "ah crap I'm paying more tax, oh well I'll just carry on then, I like working here, the career prospects are quite good, they have personal development plans and everything." :eyes

Big question is how many of each type you're going to get.

qh

LondonManc
28th July 2016, 13:45
Interesting thread - should be a sticky. :wink

Come next April I think your going to have a number of clued up contractors (probably regular posters here, or have come via here) who will understand what is happening and walk (if they haven't already done so) and avoid PS gigs entirely.

Then you'll have the newbies who don't know tulip from tulipola or experienced ones who just can't be bothered with it all. (I've met a few, been contracting for many years but they just don't care about IR35). The noobies they'll go along blindly, think, "ah crap I'm paying more tax, oh well I'll just carry on then, I like working here, the career prospects are quite good, they have personal development plans and everything." :eyes

Big question is how many of each type you're going to get.

qh

A bit too polar that quackers.

You'll have those doing the psexit sooner who are clued up, then of the ones that don't realise, you'll have:
Some carry on and not realise and be left with a huge tax bill that they cannot afford
Some get to three months in, realise what their new tax bill is and Foxtrot Oscar.
Some carry on and go, ah well, it's still a job
Some convert to perm

cojak
28th July 2016, 16:06
If you see how many newbies complain after their proper umbrella has deducted the correct amount of tax, you'll get some idea of the nasty shock they'll get when they realise that being a contractor really isn't about the money anymore...

LondonManc
28th July 2016, 16:48
If you see how many newbies complain after their proper umbrella has deducted the correct amount of tax, you'll get some idea of the nasty shock they'll get when they realise that being a contractor really isn't about the money anymore...

Never has been for me. If we get better rates and there are fewer of us doing it because others have fled back to permiedom, great.

pr1
29th July 2016, 07:22
Some carry on and not realise and be left with a huge tax bill that they cannot afford


Isn't the tax going to be taken at source?

LondonManc
29th July 2016, 08:42
Isn't the tax going to be taken at source?

If it's implemented correctly, yes. This *is* the public sector we're talking about though.

DotasScandal
29th July 2016, 09:13
Never has been for me. If we get better rates and there are fewer of us doing it because others have fled back to permiedom, great.

"I'm all right, Jack...". Except you might find the story doesn't really end that way.
The endgame implies the cake going zero percent to contractors and a hundred percent to crony consultancies.

LondonManc
29th July 2016, 10:11
"I'm all right, Jack...". Except you might find the story doesn't really end that way.
The endgame implies the cake going zero percent to contractors and a hundred percent to crony consultancies.

Not at all. I just think that there is a different case for contractors and BoS permietractors. Unfortunately the sort of loan scheme scams that have been run have come out of poor tax laws and HMRC/HMG failing to understand the workforce within their country.

jamesbrown
29th July 2016, 10:15
If it's implemented correctly, yes. This *is* the public sector we're talking about though.

If it isn't taken at source, it's their problem. Remember, nothing is changing in IR35 case law, only in its administration. They are attempting to take tax at source and avoid an argument later (not dissimilar to APNs in some ways). In the unlikely event that there is an argument later, they are still going to lose if the working practices are outside. They are basically trying to circumvent the risk of due process, because that hasn't worked out too well.

LondonManc
29th July 2016, 10:16
If it isn't taken at source, it's their problem. Remember, nothing is changing in IR35 case law, only in its administration. They are attempting to take tax at source and avoid an argument later (not dissimilar to APNs in some ways). In the unlikely event that there is an argument later, they are still going to lose if the working practices are outside. They are basically trying to circumvent the risk of due process, because that hasn't worked out too well.

So they'll take the money first and then you've got to argue that you get it back later?

jamesbrown
29th July 2016, 10:21
So they'll take the money first and then you've got to argue that you get it back later?

If they take the money at source, that's going to be noticed by even the dimmest of PS permietractors who will then either accept it or move on. I really don't see them taking it to tribunal in most cases, given the costs involved. It's basically switching the incentive from HMG to the contractor, as the money is switching.

eek
29th July 2016, 10:29
If it isn't taken at source, it's their problem. Remember, nothing is changing in IR35 case law, only in its administration. They are attempting to take tax at source and avoid an argument later (not dissimilar to APNs in some ways). In the unlikely event that there is an argument later, they are still going to lose if the working practices are outside. They are basically trying to circumvent the risk of due process, because that hasn't worked out too well.

Remember what I said in the other thread - this is about scaring public sector agencies into implementing it. The consequence of not implementing it (for very senior civil servants) is losing their comfy office in Whitehall with a forced move to a basement office in Kings Cross.... So it will be implemented...

jamesbrown
29th July 2016, 10:36
Remember what I said in the other thread - this is about scaring public sector agencies into implementing it. The consequence of not implementing it (for very senior civil servants) is losing their comfy office in Whitehall with a forced move to a basement office in Kings Cross.... So it will be implemented...

Absolutely, there's very little chance it won't be implemented. But in the unlikely event that the relevant supplier fails to implement this, the actual case law hasn't changed.

quackhandle
29th July 2016, 10:37
Remember what I said in the other thread - this is about scaring public sector agencies into implementing it. The consequence of not implementing it (for very senior civil servants) is losing their comfy office in Whitehall with a forced move to a basement office in Kings Cross.... So it will be implemented...

I'm sure there's a few who will be all too familiar with Kings Cross and it's local clientele. Luv you long time. :spank:

qh

eek
29th July 2016, 10:40
Absolutely, there's very little chance it won't be implemented. But in the unlikely event that the relevant supplier fails to implement this, the actual case law hasn't changed.

That's because it doesn't need to. HMRC are just sneaking in a set of rules that bypass the substitution and mutual obligation bits and then ensuring tax is paid before anyone can do anything about it... Just to show you what will happen note that HMRC are now attacking some agencies for paying people via tax schemes see http://forums.contractoruk.com/hmrc-scheme-enquiries/116218-tax-schemes-agencies-being-hit.html which should be enough to ensure all agencies are compliant come April....

There may be a good reason why this is just being implemented in the public sector - in the private sector they would be told where to go followed by see you in court....

eek
29th July 2016, 10:41
I'm sure there's a few who will be all too familiar with Kings Cross and it's local clientele. Luv you long time. :spank:

qh

I'm trying to remember where else in Central London poor quality Central Government Offices still exist (i.e. where a civil servant can be sent to but cannot protest about it). There aren't that many of them left

jamesbrown
29th July 2016, 10:49
That's because it doesn't need to.

We agree. :laugh I'm simply saying that, if the implementation is ballsed in particular instances, and they do need a tribunal decision, it's no more likely to go their way after these changes. Aside from that point of detail, I think we're all in agreement about what's happening and what the implications will be.

malvolio
29th July 2016, 10:51
I'm trying to remember where else in Central London poor quality Central Government Offices still exist (i.e. where a civil servant can be sent to but cannot protest about it). There aren't that many of them left
That's easy. The Home Office outpost in Croydon...

jamesbrown
29th July 2016, 10:58
There may be a good reason why this is just being implemented in the public sector - in the private sector they would be told where to go followed by see you in court....

I think we'll see this is the private sector, eventually. They may take it slowly, but the "no plans" line is classic BS. When they do, I think companies will mostly rollover, at least for BoS contractors, because this will be handled by a compliance team, who are naturally risk averse. I don't think project-based/short-term work is going anywhere, but the model will change for BoS work. Companies that work with many and/or very expensive specialists may fight it or simply increase rates, because there's no way that specialists are going on permie payroll - the costs would far exceed any legal/tax costs.

LondonManc
29th July 2016, 11:00
I think we'll see this is the private sector, eventually. They may take it slowly, but the "no plans" line is classic BS. When they do, I think companies will mostly rollover, at least for BoS contractors, because this will be handled by a compliance team, who are naturally risk averse. I don't think project-based/short-term work is going anywhere, but the model will change for BoS work. Companies that work with many and/or very expensive specialists may fight it or simply increase rates, because there's no way that specialists are going on permie payroll - the costs would far exceed any legal/tax costs.

It's kind of what it should be heading to - where specialists get treated as consultancies.

The big bummer is the loss of T&S for people. What extra rights will these people have or are they a still a completely expendable set of workers who can be binned off at a moment's notice, despite being unable to claim the T&S for staying away?

eek
29th July 2016, 11:04
We agree. :laugh I'm simply saying that, if the implementation is ballsed in particular instances, and they do need a tribunal decision, it's no more likely to go their way after these changes. Aside from that point of detail, I think we're all in agreement about what's happening and what the implications will be.

I find it best to be clear and explain things in little words. There are some who have posted on this thread that really don't understand how well planned and executed this attack has been starting from the announcement of the Agency Intermediary reporting regulations...

youngguy
29th July 2016, 11:07
It's kind of what it should be heading to - where specialists get treated as consultancies.

The big bummer is the loss of T&S for people. What extra rights will these people have or are they a still a completely expendable set of workers who can be binned off at a moment's notice, despite being unable to claim the T&S for staying away?

Is the expectation there will be no t and s?

I notice in the consultation doc even the 5% flat rate expenses are not a given.

So you work with all the risk and no employee rights; no pension, holiday , sick pay etc. You get taxed as an employee and you can't claim ANY expenses? Not even pension or admin and accountancy costs?

That can't be right surely ?

eek
29th July 2016, 11:09
It's kind of what it should be heading to - where specialists get treated as consultancies.

The big bummer is the loss of T&S for people. What extra rights will these people have or are they a still a completely expendable set of workers who can be binned off at a moment's notice, despite being unable to claim the T&S for staying away?

You need to understand that your typical IT contractor is the exception here. The vast majority of the people these rules impact will be people living locally who are being supplied via an agency. I thought current clientco had a total of 3 contractors as that is all I've met (me and 2 others all specialist skill sets).

It turns out there are 15 others who do the exact same job as various permanent people do around here - they aren't permanent though as the public sector agency can't employ them (even on fixed term contracts) due to recruitment freezes.

So you can see that there are unintended consequences here until you realise how much Unison and the GMB want these tricks removed...

eek
29th July 2016, 11:12
Is the expectation there will be no t and s?

I notice in the consultation doc even the 5% flat rate expenses are not a given.

So you work with all the risk and no employee rights; no pension, holiday , sick pay etc. You get taxed as an employee and you can't claim ANY expenses? Not even pension or admin and accountancy costs?

That can't be right surely ?

IR35 = No T&S's as from April 5th 2016

5% flat rate expenses is unknown but given the way payments are planned to be pre-taxed my bet is that its gone as it will be impossible to do.... Remember the entire point is to shift people onto payroll so I can't see HMRC keeping it...

Pensions we don't know - that will be interesting...

northernladuk
29th July 2016, 11:15
How can you not know about the T&S. There was a massive furor about it and it's been in place 4 months already????

jamesbrown
29th July 2016, 11:18
It's kind of what it should be heading to - where specialists get treated as consultancies.

The big bummer is the loss of T&S for people. What extra rights will these people have or are they a still a completely expendable set of workers who can be binned off at a moment's notice, despite being unable to claim the T&S for staying away?

Perhaps, and I think it will. However, BoS contractors are nothing like employees in most instances. This is simply going to replace the non-issue of false self-employment (90% compliance in the PS, versus the 10% compliance argued by HMRC) with a big issue of false employment.

I think there's a legitimate flight on employment rights (as I've said before, one that would make me feel uncomfortable, but this is beyond feelings). This is why HMG are so keen to emphasise that nothing is changing w/r to employment law. :laugh This will be something for IPSE, in due course.

jamesbrown
29th July 2016, 11:19
I find it best to be clear and explain things in little words. There are some who have posted on this thread that really don't understand how well planned and executed this attack has been starting from the announcement of the Agency Intermediary reporting regulations...

Good point, there will be many, from varied backgrounds, reading through these threads in due course...

eek
29th July 2016, 11:21
Perhaps, and I think it will. However, BoS contractors are nothing like employees in most instances. This is simply going to replace the non-issue of false self-employment (90% compliance in the PS, versus the 10% compliance argued by HMRC) with a big issue of false employment.

I think there's a legitimate flight on employment rights (as I've said before, one that would make me feel uncomfortable, but this is beyond feelings). This is why HMG are so keen to emphasise that nothing is changing w/r to employment law. :laugh This will be something for IPSE, in due course.

Step 1 for Unions is to get people on payroll. They see it as the starting point for getting them rights...

I suspect that that could actually be right when it comes to the public sector - as a lot of things start from the moment you are on payroll (which is why around here they seem very desperate to keep those 15 people I mentioned well away from it)..

Eirikur
29th July 2016, 12:39
The other member benefits, e.g. savings for our members of >£500k this quarter alone, are just icing on their cake.

If they would have gone to Quidco or Topcashback they would have received much more savings as their cashback percentages are often much higher and no membership of any organisation is required oh and no reloadable cards and that sort of nonsense needed

eek
29th July 2016, 12:42
If they would have gone to Quidco or Topcashback they would have received much more savings as their cashback percentages are often much higher and no membership of any organisation is required oh and no reloadable cards and that sort of nonsense needed

Not quite fair.... Quidco doesn't offer 3% savings for little hassle at Sainsburys....

eek
29th July 2016, 12:47
Webberg has pointed out 3 consultation dates (2 in London 1 in Newcastle) see http://forums.contractoruk.com/hmrc-scheme-enquiries/116245-off-payroll-working-consultation.html#post2292322

That Newcastle one would be fun if local senior managers knew what was being discussed (I would bet serious sums that they don't)....

youngguy
29th July 2016, 13:55
How can you not know about the T&S. There was a massive furor about it and it's been in place 4 months already????

I knew about the T and S since April, but didnt know whether the exact same rules would apply .....I should have better joined the dots! My question was part disbelief as well.

Pension is the interesting one...whilst I wouldn't be over the moon at paying more tax it is part of life sometimes. Potentially having no business allowable expenses at all is just crazy.

Taking it a step further (post implementation ) why should a finance contractor get lower tax rates and expenses when a PS contractors doesn't ? This is no doubt the Q that will be posed in a few years, resulting in all contractors being taxed as PAYE without employee benefits.

cojak
29th July 2016, 17:20
If you see how many newbies complain after their proper umbrella has deducted the correct amount of tax, you'll get some idea of the nasty shock they'll get when they realise that being a contractor really isn't about the money anymore...

And here's another one...

http://forums.contractoruk.com/umbrella-companies/116198-umbrella-confusion.html

youngguy
15th August 2016, 07:15
IPSE: is there an update on when you plan to provide a response to the consultation? I'm aware the deadline is approaching. Also, will you be publishing it here / on your website?

eek
15th August 2016, 08:12
IPSE: is there an update on when you plan to provide a response to the consultation? I'm aware the deadline is approaching. Also, will you be publishing it here / on your website?

IPSE usually publish their responses just after the deadline so I would expect to see it on Friday or early next week....

IPSE
15th August 2016, 08:33
IPSE: is there an update on when you plan to provide a response to the consultation? I'm aware the deadline is approaching. Also, will you be publishing it here / on your website?

We'll be publishing our response, a call to action from IPSE members via direct email and on our website, a press release and various blogs on Thursday 18th August.

youngguy
18th August 2016, 06:59
We'll be publishing our response, a call to action from IPSE members via direct email and on our website, a press release and various blogs on Thursday 18th August.

Good job IPSE. As I've said on here, I'd have personally liked the process to be more transparent and be published before the deadline. That aside, it's a decent response (in my personal view)

eek
18th August 2016, 07:46
Well its a response. Why on earth it uses the term PSC in any place is something that I cannot comprehend even though I know the consultation uses it..

Let's see if it has any chance of commanding the sea....

youngguy
18th August 2016, 07:57
Well its a response. Why on earth it uses the term PSC in any place is something that I cannot comprehend even though I know the consultation uses it..

Let's see if it has any chance of commanding the sea....

To be fair I think it uses the term as the Gov did. It does cite the issue with the term early on.

Obviously everyone will have views on areas that could have been stronger (for me it's around 5pc expenses and what it means for pensions) but it had stats from a 'real' institution and it came up with a tiered option from 'do nothing' through to 'dont rush it'.

I was pleasantly surprised .

Will it make a difference? I doubt it.

eek
18th August 2016, 08:06
To be fair I think it uses the term as the Gov did. It does cite the issue with the term early on.

Obviously everyone will have views on areas that could have been stronger (for me it's around 5pc expenses and what it means for pensions) but it had stats from a 'real' institution and it came up with a tiered option from 'do nothing' through to 'dont rush it'.

I was pleasantly surprised .

Will it make a difference? I doubt it.

My issue is that departments are not dependent on PSCs. They are dependent on agencies providing skilled freelance workers (it's what we are) and the use of psc hides what the actual issue would be - the skilled workers are going to sit on the sidelines and laugh.

DotasScandal
18th August 2016, 09:24
To be fair I think it uses the term as the Gov did

And that in itself is already a grave mistake.
Language shapes thought. Parrotting HMRC's twisted newspeak automatically subordinates one to HMRC's twisted worldview.

LondonManc
18th August 2016, 09:48
And that in itself is already a grave mistake.
Language shapes thought. Parrotting HMRC's twisted newspeak automatically subordinates one to HMRC's twisted worldview.

Indeed. A lie told often enough becomes the truth.

youngguy
18th August 2016, 09:48
And that in itself is already a grave mistake.
Language shapes thought. Parrotting HMRC's twisted newspeak automatically subordinates one to HMRC's twisted worldview.

Sadly we aren't like a union that can just say no. We are subordinate to them. It is very likely Gov will take no notice at all. It is not a fair consultation in the sense of power and decision making ability.

The Gov have created a PSC definition and seem intent on using it. I don't agree with it, but it is often a case of picking the battles and I don't know that having a document that just blank refused anything the Gov said would have been useful.

Its been clear that Gov are convinced we are a cash cow and now I think it is about getting the 'least bad option' .

The doc cites the lack of psc definition in section 2.2 and then says it will use it given the Gov does. I personally don't think you can dismiss the entire document based on this alone.

eek
18th August 2016, 10:31
Sadly we aren't like a union that can just say no. We are subordinate to them. It is very likely Gov will take no notice at all. It is not a fair consultation in the sense of power and decision making ability.

The Gov have created a PSC definition and seem intent on using it. I don't agree with it, but it is often a case of picking the battles and I don't know that having a document that just blank refused anything the Gov said would have been useful.

Its been clear that Gov are convinced we are a cash cow and now I think it is about getting the 'least bad option' .

The doc cites the lack of psc definition in section 2.2 and then says it will use it given the Gov does. I personally don't think you can dismiss the entire document based on this alone.

No but as I said before the fact they use it obscures a very large part of the argument and the actual end issue.

A PSC is a tax device (you can argue the reasons behind it, however, you want and whether its tax saving or not), but that's not what being attacked here. What is being attacked here are specialist freelance resources i.e. skilled workers the public sector organisation does not and probably cannot employ themselves for whatever reason.

Using the term psc removes that fundamental fact from IPSE's entire argument and removes the actual problem and risk to the public sector from their answers to those questions...

So yes it is a mistake to use it. I would have used 2.2 to emphasis what we actually are picked a far more suitable term (Freelance Expert, Professional Freelance worker whatever someone thought was best) and substituted that where-ever PSC appeared in the document. The final impact would then have been far clearer and far more obvious....

malvolio
18th August 2016, 11:07
TBF, what's being attacked is not the proposal per se, but the fact that the proposal is based on deeply flawed, inaccurate and wilfully misleading data being presented as fact by people with no knowledge of the sector and little or no understanding of the underlying economics. Basically, not so much as "Don't do this damned silly thing" as much as "Are you actually aware that what you are doing is the wrong thing for the wrong reasons". Using their language and terminology, while irritating, at least means we are deliberately talking the same language so they can't claim misunderstanding of meaning.

I have little doubt it will go ahead and that the best we can hope for is to delay implementation until the tool has been tested to destruction and - almost certainly - shown to be unfit for purpose. Not that that will stop them, since they are following a political agenda, not an economic one.

Meanwhile, get writing to your MPs and tell them why their government is badly in the wrong in a crucial area for UKPLC.

jamesbrown
18th August 2016, 12:19
unfit for purpose.

Unfit for what purpose? It's quite likely to be fit for the purpose they intend, even if they haven't understood the implications of that intention. The calibration of the online tool and related questions is a sideshow from our perspective.

The problem here is that HMG/HMRC appear not to have a legitimate aim, expressed honestly. They want to increase employment for tax purposes, without increasing employment. It isn't even unspoken, they've explicitly stated this, but the PR obviously focuses on the avoidance angle. I fully agree with that aspect of the case presented by IPSE, namely that HMG should use employment contracts if they want employees.

Everything else flows from their desire to increase disguised self-employment; the screening questions, the removal of due process, the calibration of the online tool. It's all a means to an end, because they want to believe their own hype about 90% non-compliance.

On the whole, I think lobbying is a worthwhile activity, but this needs to go above the heads of the civil servants and focus on MPs and ministers. If the ministerial direction is in keeping with the desire to increase employment for tax purposes, without increasing employment, then we're all wasting out time; but we won't know until we've tried (i.e. engage your MP).

malvolio
18th August 2016, 12:42
Unfit for what purpose? It's quite likely to be fit for the purpose they intend, even if they haven't understood the implications of that intention. The calibration of the online tool and related questions is a sideshow from our perspective.

The problem here is that HMG/HMRC appear not to have a legitimate aim, expressed honestly. They want to increase employment for tax purposes, without increasing employment. It isn't even unspoken, they've explicitly stated this, but the PR obviously focuses on the avoidance angle. I fully agree with that aspect of the case presented by IPSE, namely that HMG should use employment contracts if they want employees.

Everything else flows from their desire to increase disguised self-employment; the screening questions, the removal of due process, the calibration of the online tool. It's all a means to an end, because they want to believe their own hype about 90% non-compliance.

On the whole, I think lobbying is a worthwhile activity, but this needs to go above the heads of the civil servants and focus on MPs and ministers. If the ministerial direction is in keeping with the desire to increase employment for tax purposes, without increasing employment, then we're all wasting out time; but we won't know until we've tried (i.e. engage your MP).
I'm pretty sure IPSE are talking to people well above the senior Civil Service drone level... :wink

And the magic tool has to be able to produce consistent results that align to established case law for IR35 determinations. That simply isn't going to happen, even if UIR35 status is cut and dried which it isn't. If it is forced on you and you disagree, then you use the existing appeal/tribunal/higher appeal process: you think HMRC could handle a few thousand of them a month?

youngguy
18th August 2016, 12:42
No but as I said before the fact they use it obscures a very large part of the argument and the actual end issue.

A PSC is a tax device (you can argue the reasons behind it, however, you want and whether its tax saving or not), but that's not what being attacked here. What is being attacked here are specialist freelance resources i.e. skilled workers the public sector organisation does not and probably cannot employ themselves for whatever reason.

Using the term psc removes that fundamental fact from IPSE's entire argument and removes the actual problem and risk to the public sector from their answers to those questions...

So yes it is a mistake to use it. I would have used 2.2 to emphasis what we actually are picked a far more suitable term (Freelance Expert, Professional Freelance worker whatever someone thought was best) and substituted that where-ever PSC appeared in the document. The final impact would then have been far clearer and far more obvious....

I think the issue is the reason Gov cite for doing this (scummy tax dodgers) is not really the reason for doing it (we think this is an easy way to grab more tax revenue).

So the entire debate and consultation is playing out against the wrong perception.

I personally don't think they are attacking us as specialists ....they just see a group that they can collect tax from by making Gov depts an extension of HMRC. The unintended consequence on us is something they have not thought through.

youngguy
18th August 2016, 12:43
TBF, what's being attacked is not the proposal per se, but the fact that the proposal is based on deeply flawed, inaccurate and wilfully misleading data being presented as fact by people with no knowledge of the sector and little or no understanding of the underlying economics. Basically, not so much as "Don't do this damned silly thing" as much as "Are you actually aware that what you are doing is the wrong thing for the wrong reasons". Using their language and terminology, while irritating, at least means we are deliberately talking the same language so they can't claim misunderstanding of meaning.

I have little doubt it will go ahead and that the best we can hope for is to delay implementation until the tool has been tested to destruction and - almost certainly - shown to be unfit for purpose. Not that that will stop them, since they are following a political agenda, not an economic one.

Meanwhile, get writing to your MPs and tell them why their government is badly in the wrong in a crucial area for UKPLC.

It pains me to agree with you, but I do ;)

eek
18th August 2016, 12:44
I think the issue is the reason Gov cite for doing this (scummy tax dodgers) is not really the reason for doing it (we think this is an easy way to grab more tax revenue).

So the entire debate and consultation is playing out against the wrong perception.

I personally don't think they are attacking us as specialists ....they just see a group that they can collect tax from by making Gov depts an extension of HMRC. The unintended consequence on us is something they have not thought through.

It's not the unintended consequences on us that matter.. It's the unintended consequences of the public sector delivering that will be the issue...

youngguy
18th August 2016, 12:46
On the whole, I think lobbying is a worthwhile activity, but this needs to go above the heads of the civil servants and focus on MPs and ministers. If the ministerial direction is in keeping with the desire to increase employment for tax purposes, without increasing employment, then we're all wasting out time; but we won't know until we've tried (i.e. engage your MP).

I have no knowledge in this area,but surely Gov can't have it both ways, ie tax as an employee but have no rights. Is there not some legislation or case law that would call that unscrupulous?

eek
18th August 2016, 12:49
I'm pretty sure IPSE are talking to people well above the senior Civil Service drone level... :wink

And the magic tool has to be able to produce consistent results that align to established case law for IR35 determinations. That simply isn't going to happen, even if UIR35 status is cut and dried which it isn't. If it is forced on you and you disagree, then you use the existing appeal/tribunal/higher appeal process: you think HMRC could handle a few thousand of them a month?

You need to think that through a bit more. The entire approach being suggested means that you won't be able to go through the appeal tribunal approach quickly enough for it to be effective. All you realistically will be able to do is to suck up or walk away - as I suspect that a very large portion of the deductions made at source (all the NI ones for instance) would not be recoverable regardless of the tribunal response 18 months later...

And that's not meant as an attack by the way - its just one of those annoying things about NI..

eek
18th August 2016, 12:51
I have no knowledge in this area,but surely Gov can't have it both ways, ie tax as an employee but have no rights. Is there not some legislation or case law that would call that unscrupulous?

I think thats far more true in the private sector than it is in the public sector. Most public sector organisations have unions that watch over such things....

youngguy
18th August 2016, 12:55
It's not the unintended consequences on us that matter.. It's the unintended consequences of the public sector delivering that will be the issue...

In theory yes....but when I worked in that environment (sadly) ministerial direction etc rarely seems to care about operational impact unless it made the papers .

I am also not sure how many PS contractors will sit on the bench rather than work in the PS if they struggle to get work in the private sector

SueEllen
18th August 2016, 12:56
I think thats far more true in the private sector than it is in the public sector. Most public sector organisations have unions that watch over such things....

The unions have forced central government and shamed local government into employing people they have had as temps for over a year in the past.

DotasScandal
18th August 2016, 13:05
I think the issue is the reason Gov cite for doing this (scummy tax dodgers) is not really the reason for doing it (we think this is an easy way to grab more tax revenue).


In other words: the Government is simply being dishonest. In which case, the entire "debate" is worthless. Maybe there should be more focus on pointing out the above elephant in the room.

malvolio
18th August 2016, 14:06
In other words: the Government is simply being dishonest. In which case, the entire "debate" is worthless. Maybe there should be more focus on pointing out the above elephant in the room.
What, like this you mean (https://www.ipse.co.uk/news/ipse-response-consultation-ir35-public-sector)...

Also worth remembering several other serious organisations are saying the same thing.

eek
18th August 2016, 14:16
What, like this you mean (https://www.ipse.co.uk/news/ipse-response-consultation-ir35-public-sector)...

Also worth remembering several other serious organisations are saying the same thing.

I think everyone responding is sending just about the same message. Sadly I don't think that message is going to be listened to.

youngguy
18th August 2016, 14:25
In other words: the Government is simply being dishonest. In which case, the entire "debate" is worthless. Maybe there should be more focus on pointing out the above elephant in the room.

I think that should be included as well. I don't think Gov care tbh.

My view is there is more chance (although still practically none) of success by highlighting how this will not realise their plans. They have already proven they won't listen to reason

DotasScandal
18th August 2016, 14:31
They have already proven they won't listen to reason

The Treasury is the 'worst thing in Britain' and should be broken up, says Iain Duncan Smith (http://www.independent.co.uk/news/uk/politics/the-treasury-is-the-worst-thing-in-britain-and-should-be-broken-up-says-iain-duncan-smith-a7026151.html)

"The average age in the Treasury is 27. They spend no more than two years in any single part of the Treasury. They have no collective memory for any agreement or decision that had been taken before they arrived at their desks.

Everything is up for grabs immediately someone new moves in and they dictate every single policy area across government. It is a fight at all stages.

The kind of decisions made in countries such as Germany and the US to support industry were "very difficult" in the UK because of the Treasury's dominance, he said. "It's not a department that is characterised by the concept of vision," he said. "This is a department that is characterised solely by a lack of vision."

jamesbrown
18th August 2016, 15:25
I'm pretty sure IPSE are talking to people well above the senior Civil Service drone level... :wink

I'm unclear why you're winking. I'd be seriously worried if they weren't. Of course they are, and I browse the IPSE forum etc. too, so I broadly know what they're engaged in. This isn't a critique of IPSE, more a reality check about what we can expect.


And the magic tool has to be able to produce consistent results that align to established case law for IR35 determinations.

No, it really doesn't, and it won't. It simply needs to be calibrated in such a way that HMRC/HMG can achieve their stated compliance objectives (or better :laugh). I think you're missing something in the sequencing. I predict that almost no cases will arrive at tribunal, because IR35 status will become a foregone conclusion, i.e. inside. Anyone that is unhappy about this situation will not accept the contract. Anyone that reconsiders later on, having accepted a contract that identifies them as an employee, will be on very shaky ground. There may be a few cases in the transition period for people that are in-contract during the transition, but I think HMRC are prepared for that (in the sense that they're intentionally unprepared, so it will be a painfully slow process). That isn't to say there's no value in those people deemed inside after April 2017 pursuing employment benefits, but that's a separate issue. You have to remember that most people want a quiet life, they're simply not interested in pursuing IR35 status at a tribunal, supported or otherwise, and there will be no incentive to do so in most cases, because the situation will be understood upfront. People will vote with their feet, i.e. leave and not engage further with the PS.

youngguy
18th August 2016, 15:58
You have to remember that most people want a quiet life, they're simply not interested in pursuing IR35 status at a tribunal, .

This.
People will try to raise rates and it will be unsuccessful (at least initially ) as even if a dept wanted to engage)retain the rules they are bound by don't allow them.

youngguy
18th August 2016, 16:34
My MP letter is done. I raised the points about employee rights, the fact I paid 3x the tax of FB last yr and finished quoting the HMRC report which said everyone they spoke to said this was a baaaaaad idea

malvolio
18th August 2016, 16:44
I'm unclear why you're winking. I'd be seriously worried if they weren't. Of course they are, and I browse the IPSE forum etc. too, so I broadly know what they're engaged in. This isn't a critique of IPSE, more a reality check about what we can expect.



No, it really doesn't, and it won't. It simply needs to be calibrated in such a way that HMRC/HMG can achieve their stated compliance objectives (or better :laugh). I think you're missing something in the sequencing. I predict that almost no cases will arrive at tribunal, because IR35 status will become a foregone conclusion, i.e. inside. Anyone that is unhappy about this situation will not accept the contract. Anyone that reconsiders later on, having accepted a contract that identifies them as an employee, will be on very shaky ground. There may be a few cases in the transition period for people that are in-contract during the transition, but I think HMRC are prepared for that (in the sense that they're intentionally unprepared, so it will be a painfully slow process). That isn't to say there's no value in those people deemed inside after April 2017 pursuing employment benefits, but that's a separate issue. You have to remember that most people want a quiet life, they're simply not interested in pursuing IR35 status at a tribunal, supported or otherwise, and there will be no incentive to do so in most cases, because the situation will be understood upfront. People will vote with their feet, i.e. leave and not engage further with the PS.
If you've been reading IPSE's material you will know that over 50% of all contractors are looking at not taking on PS contracts if this all comes into force...

If people are happy to sacrifice 20% of more of their income and blow large holes in their warchest and pension planning then that's their decision. It's not mine, nor, I suspect, a lot of people's.

youngguy
18th August 2016, 16:56
If you've been reading IPSE's material you will know that over 50% of all contractors are looking at not taking on PS contracts if this all comes into force...

If people are happy to sacrifice 20% of more of their income and blow large holes in their warchest and pension planning then that's their decision. It's not mine, nor, I suspect, a lot of people's.

I hope this is the case. I fear that a benched PS contractor, who will struggle to get a role in the private sector if they don't have experience,will take rate minus 20pc over 0pc sat at home.