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mnctraining
18th February 2017, 10:20
Are Fee payers applying the guidance on payments correctly on Contracts that end before the legislation commences. I see plenty of comment regarding payments being affected after 6th April, but the guidance notes state -


Off-payroll working in the public sector: reform of the intermediaries legislation - technical note
Published 5 December 2016

Overview
11.This measure applies to payments on or after 6 April 2017 and so will affect contracts entered into before 6 April 2017 and operating after that date. Public authorities and agencies and third parties supplying workers to the public authorities need to consider existing contracts and prepare for the change.

My Current contract was due to end 31st March, therefore it will not be "operating after that date", so I cant see how this contract should fall into the new rules. Is the contract still deemed to be in operation after contract end date for outstanding payments.

Link to doc below

https://www.gov.uk/government/publications/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation-technical-note/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation-technical-note#the-new-rules

jamesbrown
18th February 2017, 11:11
Are Fee payers applying the guidance on payments correctly on Contracts that end before the legislation commences. I see plenty of comment regarding payments being affected after 6th April, but the guidance notes state -


Off-payroll working in the public sector: reform of the intermediaries legislation - technical note
Published 5 December 2016

Overview
11.This measure applies to payments on or after 6 April 2017 and so will affect contracts entered into before 6 April 2017 and operating after that date. Public authorities and agencies and third parties supplying workers to the public authorities need to consider existing contracts and prepare for the change.

My Current contract was due to end 31st March, therefore it will not be "operating after that date", so I cant see how this contract should fall into the new rules. Is the contract still deemed to be in operation after contract end date for outstanding payments.

Link to doc below

https://www.gov.uk/government/publications/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation-technical-note/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation-technical-note#the-new-rules

You should read "entered into before 6 April 2017 and operating after that date" as "entered into before, as well as operating after". Bottom line, the legislation is quite clear that it applies to payments received after 6 April, even if the contract was terminated before.

mnctraining
18th February 2017, 12:22
But to be liable for PAYE & NICs, my contract needs to be assessed as being inside IR35. The PS becomes responsible for that decision after April5th not before. My current contract is outside IR35 (independently reviewed). Therefore my invoices should be paid gross and not processed for NIC’s/PAYE (as per my contract terms).

My frustration is that my agency has terminated my contract 2 weeks early on the basis that otherwise they will need to apply PAYE/NICS on a contract that is outside IR35 for the final 2 weeks of the contract. That 2 weeks equates to surplus income that could have drawn on whilst I seek a new contract. Ironically the early termination points to the risk of being in business on one’s own account!

teapot418
18th February 2017, 18:36
But to be liable for PAYE & NICs, my contract needs to be assessed as being inside IR35. The PS becomes responsible for that decision after April5th not before. My current contract is outside IR35 (independently reviewed). Therefore my invoices should be paid gross and not processed for NIC’s/PAYE (as per my contract terms).

My frustration is that my agency has terminated my contract 2 weeks early on the basis that otherwise they will need to apply PAYE/NICS on a contract that is outside IR35 for the final 2 weeks of the contract. That 2 weeks equates to surplus income that could have drawn on whilst I seek a new contract. Ironically the early termination points to the risk of being in business on one’s own account!

Your agent needs to get an determination from the client for any payments made on or after 6th April. If your client was to say your role was subject to IR35, the agent would need to deduct PAYE taxes from that payment.

It crazy, but it's what it is.

jamesbrown
18th February 2017, 19:06
But to be liable for PAYE & NICs, my contract needs to be assessed as being inside IR35. The PS becomes responsible for that decision after April5th not before. My current contract is outside IR35 (independently reviewed). Therefore my invoices should be paid gross and not processed for NIC’s/PAYE (as per my contract terms).

My frustration is that my agency has terminated my contract 2 weeks early on the basis that otherwise they will need to apply PAYE/NICS on a contract that is outside IR35 for the final 2 weeks of the contract. That 2 weeks equates to surplus income that could have drawn on whilst I seek a new contract. Ironically the early termination points to the risk of being in business on one’s own account!

The fee payer (your agent) becomes responsible for the correct treatment w/r to IR35 of payments made after April 5. They need to request an assessment from the PSB for any payments that fit this category, regardless of when the work was completed. It sounds as though your agent is pretty clueless. I do sympathise, but them's the rules (as things currently stand; it could change before Royal Assent).

Patrick@Intouch
20th February 2017, 09:06
As already mentioned, any payments processed after 6 April 2017 are to be treated under the new rules for off payroll workers in the public sector.

How the practicalities of this work for payments due immediately or even shortly after this date is anybody's guess.

It may be worth speaking with your agency to ask them how they intend to deal with this. If they are asking the end client then that end client has 31 days to respond to the agency's (fee payer's) request so it may result in either delayed payments or a "safety" approach where agencies apply PAYE and NIC just in case you are deemed to be within the new rules.

teapot418
20th February 2017, 09:47
It may be worth speaking with your agency to ask them how they intend to deal with this. If they are asking the end client then that end client has 31 days to respond to the agency's (fee payer's) request so it may result in either delayed payments or a "safety" approach where agencies apply PAYE and NIC just in case you are deemed to be within the new rules.

And presumably the requirement to respond within 31 days only kicks in when the legislation starts. Clients have no obligation to respond to anything before then.

mnctraining
20th February 2017, 11:21
Moot point for me - contract termination was served by agency on Friday that ceases my contract 2 weeks early. This was done so that all outstanding invoices will be paid inline with their invoice run they have brought forward.
Therefore no future payments will be made after 5th April.

Dont event get me started on the actual termination notice that also provided an assessment on the current role which leads to an assessment on a future contract (post April) for a future contract I have not applied for.

That assessment on the current role, Being at odds to my independent assessment as outside and assumes MOO for a future contract which is not a contractual T&C in the current contract.
Don't you just love blanket decisions!

LondonManc
20th February 2017, 11:25
Moot point for me - contract termination was served by agency on Friday that ceases my contract 2 weeks early. This was done so that all outstanding invoices will be paid inline with their invoice run they have brought forward.
Therefore no future payments will be made after 5th April.

Dont event get me started on the actual termination notice that also provided an assessment on the current role which leads to an assessment on a future contract (post April) for a future contract I have not applied for.

That assessment on the current role, Being at odds to my independent assessment as outside and assumes MOO for a future contract which is not a contractual T&C in the current contract.
Don't you just love blanket decisions!

They're covering their own backsides. It's kneejerk but almost logical - given they've probably acquiesced to candidate requests in the past for an IR35-friendly contract, they're perhaps having to learn more about IR35 far quicker than they wanted and have panicked their way into retro-proofing their business. I'm sure they haven't taken the decision to make a sacrifice of two weeks' commission across the board lightly.