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View Full Version : IR35 in PS gets reported in the media...



MarkT
27th February 2017, 08:42
According to the Guardian "agency workers" will lose up to 30% of their "salary" but it looks like this nut job of an idea might be starting to make the news in the mainstream.

Interesting in the article is the statement about the move not gaining traction across the house for private sector changes of a similar ilk..

Oh and the NHS will end up spending twice the amount on the same people...

https://www.theguardian.com/society/2017/feb/27/tax-changes-uk-public-sector-workers-salary-exodus-nhs

jamesbrown
27th February 2017, 08:59
Thanks - good find. Interesting comment about the private sector, as you say.

MrMarkyMark
27th February 2017, 09:04
Sill peddling the £400m lie I see :rolleyes:


The government says it has introduced these changes because it estimates that 90% of these agency workers are not paying enough tax, leading to a loss of £400m a year to the Treasury.

MarkT
27th February 2017, 09:07
Thanks - good find. Interesting comment about the private sector, as you say.

Makes me wonder if the initial idea was to push this across all sectors, but once they realised the opposition to that idea, they settled on the Public Sector.

Still quoting the 90% figure I see...

eek
27th February 2017, 09:13
Thanks - good find. Interesting comment about the private sector, as you say.

Love the last sentence


He also declined to comment on whether or not the government had done any assessment of the implications for public sector budgets and workforce of these changes.

but yep it's going to be the mess we all know its going to be...

jamesbrown
27th February 2017, 09:14
Sill peddling the £400m lie I see :rolleyes:

The Gruaniad (among other sources) struggle with their fact-checking and analysis of technical issues. They haven't even assigned the correct assertion (20m) :laugh. However, this obviously wasn't Gov't-sourced, as it's spurious crap with a positive spin (ill-conceived policy), rather than a negative spin.

jamesbrown
27th February 2017, 09:17
Love the last sentence

Yes, nice to see something that isn't Gov't spun for once, even if the article is just as confused as normal.

MrMarkyMark
27th February 2017, 09:18
The Gruaniad (among other sources) struggle with their fact-checking and analysis of technical issues. They haven't even assigned the correct assertion (20m) :laugh. However, this obviously wasn't Gov't-sourced, as it's spurious crap with a positive spin (ill-conceived policy), rather than a negative spin.

True.

I remember when the Guardian used to be a paper with a number of good writers, now its just meh.
The Iraq war reporting, for example, was very strong.

I have always read media right across the board, in any case, when I was growing up, well prior to the internet :oldgit:

jamesbrown
27th February 2017, 09:27
Makes me wonder if the initial idea was to push this across all sectors, but once they realised the opposition to that idea, they settled on the Public Sector.

Still quoting the 90% figure I see...

Indeed. Quite a surprising comment, and as good as attributed (i.e. probably Gauke or Ellison), not that Maugham is a massive fan of this Gov't. I suppose, ultimately, the same approach was killed in 1999, so there might be some pushback, and perhaps now isn't the time to be smegging with the private sector unnecessarily. Until I read that comment, I thought it was almost inevitably going to be extended in, say, April 2018....

MPwannadecentincome
27th February 2017, 09:29
Are doctors and nurses a good example, surely most of them are inside IR35 anyway?

jamesbrown
27th February 2017, 09:30
True.

I remember when the Guardian used to be a paper with a number of good writers, now its just meh.
The Iraq war reporting, for example, was very strong.

I have always read media right across the board, in any case, when I was growing up, well prior to the internet :oldgit:

Absolutely. I used to read it regularly too. Not that it's only a problem with the Gruaniad. They don't have the quality of writers for the day-to-day stuff. Their last decent reveal was the Panama papers. The business model of the Gruaniad and other traditional outlets is essentially bust (there's a begging bowl after almost every article now).

SueEllen
27th February 2017, 09:43
Are doctors and nurses a good example, surely most of them are inside IR35 anyway?

Depends on how senior they are.

If they are a consultant, GP or senior nurse they aren't. But then they may have to manage staff so are...

DotasScandal
27th February 2017, 09:56
Until I read that comment, I thought it was almost inevitably going to be extended in, say, April 2018....

They may shelve it for now but only to try it on again later. 100% guaranteed.

SueEllen
27th February 2017, 10:01
They may shelve it for now but only to try it on again later. 100% guaranteed.

The clever thing to do is to increase the dividend tax.

jamesbrown
27th February 2017, 10:18
The clever thing to do is to increase the dividend tax.

In my view, that's exactly what they'll do; introduce measures that render different forms of income more "equivalent" for tax purposes. Dividend tax is a somewhat blunt tool with implications far beyond the contracting sector, but it's a straightfoward lever, available to them right now, whereas most others require broad-based reform (i.e. long grass). I don't think they're really listening to arguments about the flexible workforce.

I suppose the cynic in me has always thought that the PS debacle was fully intended, as a springboard to the argument that rapid equivalence in the private sector was essential, but the comment in this article suggests otherwise, and that they'll probably take a different route.

I'm not sure how many of you read the recent report from the IFS, but you can be sure that the Gov't is paying attention, and increased dividend taxation, increased NI for the self-employed etc. will all be on the table as interim measures to equivalent taxation of all forms of income in the long-run.

eek
27th February 2017, 10:18
The clever thing to do is to increase the dividend tax.

Increasing that much further impacts others rather than just contractors including pensioners with a bit of savings...

IR35 now comes down to where does Employers NI come from - the solution would be to make it part of Employees NI and mandate a 13.8% increase in gross pay to reflect it but that isn't going to work.

We again reach the point in the project where you look at where you want to be and think we'll we ain't going to get there from here. And that is true of both our employment laws and our income tax rules...

jamesbrown
27th February 2017, 10:23
Increasing that much further impacts others rather than just contractors including pensioners with a bit of savings

But they don't need to increase it much in % terms, and rich pensioners don't have the same leverage under May. I'd expect several measures in future that impact the upper quantiles of pension income.

bobspud
27th February 2017, 10:27
But they don't need to increase it much in % terms, and rich pensioners don't have the same leverage under May. I'd expect several measures in future that impact the upper quantiles of pension income.

I thought the dividends were also going to screw the pension funds?

LondonManc
27th February 2017, 10:33
In my view, that's exactly what they'll do; introduce measures that render different forms of income more "equivalent" for tax purposes. Dividend tax is a somewhat blunt tool with implications far beyond the contracting sector, but it's a straightfoward lever, available to them right now, whereas most others require broad-based reform (i.e. long grass). I don't think they're really listening to arguments about the flexible workforce.

I suppose the cynic in me has always thought that the PS debacle was fully intended, as a springboard to the argument that rapid equivalence in the private sector was essential, but the comment in this article suggests otherwise, and that they'll probably take a different route.

I'm not sure how many of you read the recent report from the IFS, but you can be sure that the Gov't is paying attention, and increased dividend taxation, increased NI for the self-employed etc. will all be on the table as interim measures to equivalent taxation of all forms of income in the long-run.

Yet they're still targeting the wrong people - clients get off the hook without paying business NICs whatever approach they ramp up.

SueEllen
27th February 2017, 10:42
I thought the dividends were also going to screw the pension funds?

Why?

It is individual taxation.

SueEllen
27th February 2017, 10:42
Yet they're still targeting the wrong people - clients get off the hook without paying business NICs whatever approach they ramp up.

That's what the unions are fighting for.

eek
27th February 2017, 10:45
Yet they're still targeting the wrong people - clients get off the hook without paying business NICs whatever approach they ramp up.

Lucy posted a comment on linkedin about the unite union article - and the more I think about it the more I think unite is right.

For supply teachers the deal used to be £140 a day - paid by agency / school as PAYE.
Now its £150-160 a day (if lucky) paid via umbrella.

What it should be is still advertised at £140 a day. The Umbrella fees and employers NI shouldn't be being included in the advertised total (they aren't when you advertise a salary) and they should never been seen by the supply teacher...

I wonder if the correct approach would be for unison to continually complain to the advertising standards board and for legislation that states that umbrella fees and employers NI should be paid by the employer....

LondonManc
27th February 2017, 11:10
Lucy posted a comment on linkedin about the unite union article - and the more I think about it the more I think unite is right.

For supply teachers the deal used to be £140 a day - paid by agency / school as PAYE.
Now its £150-160 a day (if lucky) paid via umbrella.

What it should be is still advertised at £140 a day. The Umbrella fees and employers NI shouldn't be being included in the advertised total (they aren't when you advertise a salary) and they should never been seen by the supply teacher...

I wonder if the correct approach would be for unison to continually complain to the advertising standards board and for legislation that states that umbrella fees and employers NI should be paid by the employer....

Think about that in the contract market for a second....

It would be glorious, but would those figures ever get seen?

PurpleGorilla
27th February 2017, 11:15
Chasing the little people when the big corporates and super wealthy avoid huge amounts of tax.

MarkT
27th February 2017, 11:24
Chasing the little people when the big corporates and super wealthy avoid huge amounts of tax.

It's easier, quicker and lets people feel important when they inform on their neighbours.

eek
27th February 2017, 11:41
Think about that in the contract market for a second....

It would be glorious, but would those figures ever get seen?

The issue always boils down to the fact we are similar (but significantly different) to others.

Hence agencies use the things we like (gross pay advertisements) to abuse their position in the market to advertise higher rates of pay that a supply teacher will never actually see. Said supply teacher goes joins the books of the agency offering the higher pay rate and is then trapped by t&cs and umbrella fees that encourage you to stay...

The way we work means that other agencies are using our working methods and are tricking other people into using them. That is really at least half the reason for the current crack down.