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AptoAccounting
1st February 2017, 14:28
Today the MoD communicated with its 'off-payroll appointees' regarding IR35 changes for the public sector. Whilst not explicit, the letter seems to imply that a contract review will be enough to satisfy them of employment status. Ideally a HMRC contract review or, alternatively, one from a 'competent person'.

Very different line from the TfL saga.

Is it beyond the public sector to have a coordinated response?

SueEllen
1st February 2017, 14:31
Yep - as they aren't one entity.

pjt
1st February 2017, 14:32
Today the MoD communicated with its 'off-payroll appointees' regarding IR35 changes for the public sector. Whilst not explicit, the letter seems to imply that a contract review will be enough to satisfy them of employment status. Ideally a HMRC contract review or, alternatively, one from a 'competent person'.

Very different line from the TfL saga.

Is it beyond the public sector to have a coordinated response?

That does sound a bit more promising. By competent person I'm assuming they mean QDOS, IPSE etc? If so then that at least allows a way out for many.

LondonManc
1st February 2017, 14:34
Today the MoD communicated with its 'off-payroll appointees' regarding IR35 changes for the public sector. Whilst not explicit, the letter seems to imply that a contract review will be enough to satisfy them of employment status. Ideally a HMRC contract review or, alternatively, one from a 'competent person'.

Very different line from the TfL saga.

Is it beyond the public sector to have a coordinated response?

Hmmm, would that include a QDOS review already conducted before the start of the engagement? Include working practices and they might actually be conceding that diligent contractors know what they're doing and are behaving like businesses.

daemon
1st February 2017, 14:39
That does sound a bit more promising. By competent person I'm assuming they mean QDOS, IPSE etc? If so then that at least allows a way out for many.

Does that imply that the test ISNT mandatory?

I thought it was?

Or does a PS have the ability to say "although the test concludes that this person is inside IR35, we are deeming them outside IR35"?

northernladuk
1st February 2017, 14:43
Is it beyond the public sector to have a coordinated response?

You don't understand the PS very well :laugh

pjt
1st February 2017, 14:43
Does that imply that the test ISNT mandatory?

I thought it was?

My understanding is the test is optional. I know my client has no intention of using it.

northernladuk
1st February 2017, 14:45
Hey Apto, I can't pick some of the options on your navigation bar because your chat is at the top left and some big blue balloon comes up obscuring the first two options. HTH.

malvolio
1st February 2017, 14:47
Does that imply that the test ISNT mandatory?

I thought it was?

Or does a PS have the ability to say "although the test concludes that this person is inside IR35, we are deeming them outside IR35"?
No, it isn't. The PSB has to make a determination on status: how they do it is up to them, the tool is merely there to assist (yeah, right - assist HMRC most likely...). Sounds like MOD have broken with the habits of a lifetime and made a sensible decision.

northernladuk
1st February 2017, 14:49
No, it isn't. The PSB has to make a determination on status: how they do it is up to them, the tool is merely there to assist (yeah, right - assist HMRC most likely...). Sounds like MOD have broken with the habits of a lifetime and made a sensible decision.

If they were REALLY sensible they would now bin their dead wood, drop their rates to somewhere less than normal but just above PAYE and just pick the cream of the crop from the other agencies.

SueEllen
1st February 2017, 14:54
If they were REALLY sensible they would now bin their dead wood, drop their rates to somewhere less than normal but just above PAYE and just pick the cream of the crop from the other agencies.

Don't give them ideas.

DaveB
1st February 2017, 15:19
Bit of a turn around from the events at the UKHO (MoD agency) which issued a blanket decree that all contractors were inside and say most of the subsequently leave.

SimonMac
1st February 2017, 15:36
Bit of a turn around from the events at the UKHO (MoD agency) which issued a blanket decree that all contractors were inside and say most of the subsequently leave.

I thought UKHO went to BIS at the same time at the Met Office?

bobspud
1st February 2017, 15:59
If they were REALLY sensible they would now bin their dead wood, drop their rates to somewhere less than normal but just above PAYE and just pick the cream of the crop from the other agencies.

Dont be silly. The ones you might perceive as dead wood are doing what the MoD need out of them. Its the pups that run in and scream Im here to change the world next week that are the problem. Most of the guys that I have seen fail miserably recently have all been really good at their job from a normal point of view but completely unable to cope with the long drawn out time scales of delivering something to a procurement route.

it drives them stupid then they offend people then they leave...

teapot418
1st February 2017, 16:09
Interesting, as the MoD was one of the departments that was fined for non compliance, so you'd expect them to be extra risk adverse.

https://www.gov.uk/government/news/second-evaluation-of-tax-arrangements-for-off-payroll-contracts-in-the-public-sector-published

bobspud
1st February 2017, 16:15
Interesting, as the MoD was one of the departments that was fined for non compliance, so you'd expect them to be extra risk adverse.

https://www.gov.uk/government/news/second-evaluation-of-tax-arrangements-for-off-payroll-contracts-in-the-public-sector-published

Why? Being non-compliant and keeping your resources on site is massively cheaper than a tank or fighter jet...

Its almost a no brainer. Im surprised more departments have not figured it out ;)

psychocandy
2nd February 2017, 08:58
Today the MoD communicated with its 'off-payroll appointees' regarding IR35 changes for the public sector. Whilst not explicit, the letter seems to imply that a contract review will be enough to satisfy them of employment status. Ideally a HMRC contract review or, alternatively, one from a 'competent person'.

Very different line from the TfL saga.

Is it beyond the public sector to have a coordinated response?

Interesting and sensible approach maybe. Not sure if thats what HMRC are hoping though.

Of course, you'll still get those who dont even bother getting their contract reviewed but if its just a case of getting a QDOS review up front then a lot of people will be safe.

MrMarkyMark
2nd February 2017, 09:15
Just the start I'm guessing :D.

What a lovely clusterfeck, as predicted, this is turning out to be.

Really is turning out much better than expected..

:popcorn:

OldMamil
2nd February 2017, 09:35
I am not quite so sure of the optimism. The letter actually states that one of the evidence criteria is:

A contract review showing that you are outside the IR35 intermediaries legislaton and would not be deemed an employee if you had a contract directly with the MOD rather than through an intermediary. An HMRC Contract Review is preferred, but one from a competent person or organisation is acceptable (eg a tax accountant or advisor in a reputable company). ......

So far so good?....now the sting....

Please note that it is unlikely that we would consider a Contract Review to be be adequate assurance where your placement in the MOD is effectively "manpower substitution" (eg you have been provided under the Ccrown Commercial Service Contract Labour One framworks). Ie through Capita!

The threat is the same as the Hydrographic office.... instant contract termination and HMRC notificaton.

5000
2nd February 2017, 12:37
Today the MoD communicated with its 'off-payroll appointees' regarding IR35 changes for the public sector. Whilst not explicit, the letter seems to imply that a contract review will be enough to satisfy them of employment status. Ideally a HMRC contract review or, alternatively, one from a 'competent person'.

Very different line from the TfL saga.

Is it beyond the public sector to have a coordinated response?

Are you sure that it is about the IR35 reform and not just the annual standard off-payroll tax assurance audit?

Semtex
2nd February 2017, 13:00
Are you sure that it is about the IR35 reform and not just the annual standard off-payroll tax assurance audit?

interestingly where I am they are asking you to complete your Working practices again, although this time only answering 6 Qs and the SCS answering the remaining. If you are deemed inside they need assurances or they will inform HMRC IR35 team and youre out.

BoredBloke
2nd February 2017, 13:25
interestingly where I am they are asking you to complete your Working practices again, although this time only answering 6 Qs and the SCS answering the remaining. If you are deemed inside they need assurances or they will inform HMRC IR35 team and youre out.

And if you fill that in and even if you decide to leave, HMRC will then have a record that your current gig is also inside.

Semtex
2nd February 2017, 13:43
And if you fill that in and even if you decide to leave, HMRC will then have a record that your current gig is also inside.

Maybe inside

Mine has always come down low, but now that someone else is answering the questions who may not know my practices its worrying.

I have Qdos insurance and they have reviewed signed working practices and contract but this is strange. People are suggesting they are renewing all for 6 months based on outside IR35, which may be why they have done this, but not sure

BoredBloke
2nd February 2017, 14:13
Maybe inside

Mine has always come down low, but now that someone else is answering the questions who may not know my practices its worrying.

I have Qdos insurance and they have reviewed signed working practices and contract but this is strange. People are suggesting they are renewing all for 6 months based on outside IR35, which may be why they have done this, but not sure

I'd bet if they are using HMRC's tool it will be weighted so that it is inside and like you say, the person filling in a lot of the answers probably hasn't a clue what they are doing of the implications

difficulttimes
2nd February 2017, 14:22
Forgive me if I'm being a bit naive but if contractors will soon be asked to fill in some questionnaire to make sure they are outside shouldn't they enforce their power of substitution? This is the key fundamental difference that separates us from employees and if you have done it then you are definitely outside. From what I've read this is what kills HMRC's claims at tribunals or during an investigation - substitution.

Of course this could be another contractor colleague - someone who has a similiar skill set to you and I'm sure all of us could find someone like that in our offices.

*I realise that I've spelt substitution incorrectly..*

Lance
2nd February 2017, 15:48
So far so good?....now the sting....

Please note that it is unlikely that we would consider a Contract Review to be be adequate assurance where your placement in the MOD is effectively "manpower substitution" (eg you have been provided under the Ccrown Commercial Service Contract Labour One framworks). Ie through Capita!
.

Forget everything else. Manpower substition is inside IR35. The implication is you're substituting permanent resource.

OldMamil
2nd February 2017, 18:58
Forget everything else. Manpower substition is inside IR35. The implication is you're substituting permanent resource.

Then there are a lot of people in the cacky then, as this contracting mechanism is the most commonly applied, through the blanket Capita manpower services contract even when an inividual is brought into to work on a specific work package/project.

My contract was checked prior to my taking post and was assessed as being outside of IR35

Lance
2nd February 2017, 21:11
Then there are a lot of people in the cacky then, as this contracting mechanism is the most commonly applied, through the blanket Capita manpower services contract even when an inividual is brought into to work on a specific work package/project.

My contract was checked prior to my taking post and was assessed as being outside of IR35

I think this is entirely the point of the new rules though.
There are undoubtedly a lot of contractors who are effectively inside but not been caught out yet. Whether the new rules is too blunt an instrument to be fit for purpose is not yet known. But it will be effective on large numbers who should be inside in the first place.

As has been discussed repeatedly.... your lowest risk is to leave before you're declared inside lest you get investigated for you current contract up to April.

5000
13th March 2017, 13:17
It looks like Capita have completed their assessments of the CLone workers. Agencies are starting to get in touch with Contractors letting them know the result. As far as I am aware they have all been "Inside" so far

eek
13th March 2017, 13:19
It looks like Capita have completed their assessments of the CLone workers. Agencies are starting to get in touch with Contractors letting them know the result. As far as I am aware they have all been "Inside" so far

Yep... and??? The CLone guidelines were updated in July / August last year and gave the game away then that CL1 contracts are inside..

I will be very surprised if Capita gives anyone an decision that says outside...

Beergander
13th March 2017, 18:11
Received today from Steria under CL-One on MoD contract...

Public Sector worker confirmation of your Tax status under IR35

Sopra Steria Recruitment wrote to your Personal Service Company (PSC) on 24/02/2017 explaining the way in which reforms to IR35 will affect workers who engage through a PSC on assignments where their services are delivered to a Public Sector end-user organisation.

In addition, we also wrote to each end-user client whose responsibility it is to determine the IR35 status of each assignment.

Based on the client’s assessment against HMRC criteria and information that you may have been asked to provide, your assignment through your Personal Service Company with the Public Sector organisation you have been assigned to has been determined as:

'On-Payroll’ under IR35 therefore taxable under the reform to the legislation

As the company that makes payments to your PSC, under the new IR35 rules, we will:

· Make the payments of Tax and National Insurance Contributions to HMRC that we are required to pay by law, on behalf of your PSC. Process a net payment to your PSC that reflects the amounts paid by Sopra Steria Recruitment to HMRC on behalf of your PSC.

The changes that will come into effect on the 6th April will affect all payments made to intermediaries on, or after that date, independent of the period of time for which invoices have been raised. Therefore, work that has already been completed, or will be completed before 6th April will be subject to the new rules if the contractual payment is made on or after this date.

We will complete the necessary returns to HMRC of payments from Sopra Steria Recruitment to your PSC.

Sopra Steria Recruitment will be issuing new contract terms to take effect from 6th April 2017.

Pete HOLLIDAY
Managing Director - Sopra Steria Recruitmen

HugeWhale
14th March 2017, 09:48
Doesn't MOD have a massive IT upgrade programme on the go? How will they cope if there's a mass walkout at the end of the month?

northernladuk
14th March 2017, 10:00
Doesn't MOD have a massive IT upgrade programme on the go? How will they cope if there's a mass walkout at the end of the month?

Who doesn't?

LondonManc
14th March 2017, 10:26
Doesn't MOD have a massive IT upgrade programme on the go? How will they cope if there's a mass walkout at the end of the month?

Badly. I'd love a transcript of their conversation with HMRC :)

gables
14th March 2017, 10:51
Badly. I'd love a transcript of their conversation with HMRC :)

I'd love to see a mass walk out

eek
14th March 2017, 10:53
I'd love to see a mass walk out

HMRC are gambling that there won't be one.... I suspect they are right...

LondonManc
14th March 2017, 10:55
HMRC are gambling that there won't be one.... I suspect they are right...

Why? State of the market, head-in-the-sanders, bit of both?

eek
14th March 2017, 10:59
Why? State of the market, head-in-the-sanders, bit of both?

The later. If your head isn't in the sand you would be leaving for obvious retrospective reasons regardless of having somewhere to go to...

northernladuk
14th March 2017, 11:04
HMRC are gambling that there won't be one.... I suspect they are right...

Judging by the lack of people willing to let go and the late entries to the problem we are seeing on here I can't help but think it won't be as bad as we expect it should be either. A mix of people staying because it's local/safe, those happy to see the gig out, those that can't make a decision and those that just don't have a clue it's happening is going to leave more in the office than I thought it would.

I'd say HMRC are feeling pretty pleased with themselves so far regardless of the mess and confusion they've caused.

LondonManc
14th March 2017, 11:14
Judging by the lack of people willing to let go and the late entries to the problem we are seeing on here I can't help but think it won't be as bad as we expect it should be either. A mix of people staying because it's local/safe, those happy to see the gig out, those that can't make a decision and those that just don't have a clue it's happening is going to leave more in the office than I thought it would.

I'd say HMRC are feeling pretty pleased with themselves so far regardless of the mess and confusion they've caused.

The very same head-in-sanders will be on here in a couple of months asking why these nasty umbrella companies are taking all their money. That will pale into insignificance when Hector demands his RetroWedge™

eek
14th March 2017, 11:22
The very same head-in-sanders will be on here in a couple of months asking why these nasty umbrella companies are taking all their money. That will pale into insignificance when Hector demands his RetroWedge™

And when that does occur (as it will) at least I can say well I did try to warn you...

As for pain I suspect the department with the worst issues regarding contractor retention was HMRC due to the more clueful contractors warning others..

LondonManc
14th March 2017, 11:22
And when that does occur (as it will) at least I can say well I did try to warn you...

As for pain I suspect the department with the worst issues regarding contractor retention was HMRC due to the more clueful contractors warning others..

Unless the message went out to the departments via the employee newsletter you'd be struggling. ;)

eek
14th March 2017, 11:25
Unless the message went out to the departments via the employee newsletter you'd be struggling. ;)

True but hey some people have to be the fall guys..

LondonManc
14th March 2017, 11:27
True but hey some people have to be the fall guys..

DotasScandal may not like it but if disguised employees are behaving like contractors in remuneration plans only, I'm inclined to agree with you that they can't really complain about what's coming.

bobspud
14th March 2017, 12:27
The very same head-in-sanders will be on here in a couple of months asking why these nasty umbrella companies are taking all their money. That will pale into insignificance when Hector demands his RetroWedge™

The problem is I am willing to bet that for every 10 guys with their heads in the sand in the public sector there will be an equal or higher number out there in the private sector doing equally stupid things and telling themselves that they are outside the legislation. The good (or bad) way to look at it is that come the next year or so, there will be very many fewer contractors and those left will be charging like a business rather than a small one man band.

The take away from looking at the tool is that going forwards if you are going for a contract you need to fundamentally own:

The scope of work once you have agreed the problem with your client
The way you do it
where you do it
and finally when

Other than that there are a vast number of contractors that have to turn up every day from 9 - 5 and comply with company rules and regulations that are in for a shock. Its just that the government lot learned the hard way first.

northernladuk
14th March 2017, 12:30
The problem is I am willing to bet that for every 10 guys with their heads in the sand in the public sector there will be an equal or higher number out there in the private sector doing equally stupid things and telling themselves that they are outside the legislation. The good (or bad) way to look at it is that come the next year or so, there will be very many fewer contractors and those left will be charging like a business rather than a small one man band.

The take away from looking at the tool is that going forwards if you are going for a contract you need to fundamentally own:

The scope of work once you have agreed the problem with your client
The way you do it
where you do it
and finally when

Other than that there are a vast number of contractors that have to turn up every day from 9 - 5 and comply with company rules and regulations that are in for a shock. Its just that the government lot learned the hard way first.

Totally agree but there will be enough articles and guidance out there to allow the to carry on tick box contracting for plenty of time to come. If they aren't aware of how to be a contractor now, all of this won't make much difference. Just one more hoop to ignore.

In fact thinking about it, it suits them better. Someone else deals with the IR35 stuff they couldn't be arsed to understand so making it worse.

DotasScandal
14th March 2017, 12:32
DotasScandal may not like it but if disguised employees are behaving like contractors in remuneration plans only, I'm inclined to agree with you that they can't really complain about what's coming.

DotasScandal is of the opinion that there cannot be "disguised employees" without the existence of "disguised employment rights" (like, the right not to be dismissed at the drop of a hat, or the right not to have your remuneration cut at the drop of a hat).
Simple.

Beergander
14th March 2017, 20:10
And todays communication delight...

Details of how Sopra Steria Recruitment will apply HMRC Tax and National Insurance rules
In summary:

· Sopra Steria Recruitment will not be seeking a higher rate from its clients if the assignment is deemed to fall ‘inside’ the new rules. The Gross Rate in the Schedule to your new Contract will be set at the same level as the rate in your current contract. However, terms will apply which will allow Sopra Steria Recruitment to pay you at an effective lower rate. This reflects the requirement that Employer’s National Insurance Contributions and Apprentice Levy be accounted for ‘at source’.

· Sopra Steria Recruitment will seek to put in place with your PSC a new contractual agreement that reflects the additional costs now payable by Sopra Steria Recruitment under the new rules. We are currently estimating that the revised rates payable will be approximately 13% less than the fees which you would earn if the Assignment were ‘Outside’ the new rules.

· Sopra Steria Recruitment will deduct PAYE and primary (i.e. employee’s) class 1 National Insurance Contributions from the PSC’s gross invoice. We are compelled to do this under the new rules. The amount of PAYE deducted will be in line with HMRC instructions from time to time and may be changed, e.g. by Notices of Coding. At the beginning of an assignment the deduction may be at an emergency rate.

· The net result of the above is that payments to your PSC will be subject to Tax and National Insurance Contributions as if you were an employee. Details of all deductions will be reported to HMRC under Real Time Information reporting so that your PSC can correspond with HMRC in all matters relating to your tax affairs at any time.

· In order to operate the new rules we will require you to agree to be covered by our ‘VAT Self Billing’ arrangement so that the correct figures can be generated for your PSC’s invoices to us. This will involve you registering for VAT if you are not already registered.

northernladuk
14th March 2017, 20:22
Should we we replace some of that with 'Sopra will reduce its margin and make it look like they've secured and increased rate' in to that? :)

HugeWhale
14th March 2017, 20:58
Can anyone confirm that all 300 Ltd contractors are leaving MOD's equipment procurement section at the end of the month?
I heard this from a drinking buddy so it's dodgy Intel to say the least!

cojak
14th March 2017, 20:58
Judging by the lack of people willing to let go and the late entries to the problem we are seeing on here I can't help but think it won't be as bad as we expect it should be either. A mix of people staying because it's local/safe, those happy to see the gig out, those that can't make a decision and those that just don't have a clue it's happening is going to leave more in the office than I thought it would.

I'd say HMRC are feeling pretty pleased with themselves so far regardless of the mess and confusion they've caused.
I still reckon that we won't see a spike until people open their first 'pay-packet' in May.

SueEllen
14th March 2017, 21:04
I still reckon that we won't see a spike until people open their first 'pay-packet' in May.

So from 7th April until June we will hear people moaning.

MrMarkyMark
14th March 2017, 21:32
I still reckon that we won't see a spike until people open their first 'pay-packet' in May.

You cruel mistress :laugh

MrMarkyMark
14th March 2017, 21:33
So from 7th April until June we will hear people moaning.

Errrrm, not more than enough already :confused:


:tantrum:

northernladuk
14th March 2017, 21:38
Errrrm, not more than enough already :confused:


:tantrum:

Indeed. I see another ban on the horizon :(

MrMarkyMark
14th March 2017, 21:46
Indeed. I see another ban on the horizon :(

I have had to bite my tongue, its very sore now.

That's all I'm saying :mad:

However, I do not need to reply, as always stated :eyes

RonBW
14th March 2017, 22:13
· The net result of the above is that payments to your PSC will be subject to Tax and National Insurance Contributions as if you were an employee. Details of all deductions will be reported to HMRC under Real Time Information reporting so that your PSC can correspond with HMRC in all matters relating to your tax affairs at any time.


That's not quite true - show me an employee who pays employers national insurance :(

fidot
16th March 2017, 18:14
This will involve you registering for VAT if you are not already registered.

In order to tax you like an employee, we need you to register for VAT? Bizarre!

SimonMac
17th March 2017, 07:21
And todays communication delight...

Details of how Sopra Steria Recruitment will apply HMRC Tax and National Insurance rules
In summary:

· Sopra Steria Recruitment will not be seeking a higher rate from its clients if the assignment is deemed to fall ‘inside’ the new rules. The Gross Rate in the Schedule to your new Contract will be set at the same level as the rate in your current contract. However, terms will apply which will allow Sopra Steria Recruitment to pay you at an effective lower rate. This reflects the requirement that Employer’s National Insurance Contributions and Apprentice Levy be accounted for ‘at source’.

· Sopra Steria Recruitment will seek to put in place with your PSC a new contractual agreement that reflects the additional costs now payable by Sopra Steria Recruitment under the new rules. We are currently estimating that the revised rates payable will be approximately 13% less than the fees which you would earn if the Assignment were ‘Outside’ the new rules.

· Sopra Steria Recruitment will deduct PAYE and primary (i.e. employee’s) class 1 National Insurance Contributions from the PSC’s gross invoice. We are compelled to do this under the new rules. The amount of PAYE deducted will be in line with HMRC instructions from time to time and may be changed, e.g. by Notices of Coding. At the beginning of an assignment the deduction may be at an emergency rate.

· The net result of the above is that payments to your PSC will be subject to Tax and National Insurance Contributions as if you were an employee. Details of all deductions will be reported to HMRC under Real Time Information reporting so that your PSC can correspond with HMRC in all matters relating to your tax affairs at any time.

· In order to operate the new rules we will require you to agree to be covered by our ‘VAT Self Billing’ arrangement so that the correct figures can be generated for your PSC’s invoices to us. This will involve you registering for VAT if you are not already registered.

So they are saying you will pay the employers NI as well as the employee? I thought this was illegal? And the employers NI had to be absorbed by the agency?!

eek
17th March 2017, 07:33
So they are saying you will pay the employers NI as well as the employee? I thought this was illegal? And the employers NI had to be absorbed by the agency?!

Nope they are saying they will issue a new contract at approximately 13% less. To which the reply should be sorry I'm leaving.

I have past experience however that shows Sopra Steria do not however understand what a legal contract is. Which is why they assume that people will just sign the new 13% lower contract (because a lot of people will).