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hollyblue
17th March 2017, 18:01
How can this be permissible? I have had my working arrangements agreed in a separate document prior to my start date of 13.3.17. Practices are outside of scope.

PSB has informed agency that they are going to deem all contractors inside as they don't want to take the risk. PSB has said to agency they agree I'm outside but they're not going to declare me outside due to risk of penalty and other contractors are inside and they don't want mutiny in the camp by me being outside!

I appreciate it's my discretion to leave but surely something must be done about this as that's not what was intended by the change. I only work for Local Authorities, thats not to say I cant work in private practice but my experience is 14 years in Local Government so that's where my skill lies better.

What are peoples views?

eek
17th March 2017, 18:04
How can this be permissible? I have had my working arrangements agreed in a separate document prior to my start date of 13.3.17. Practices are outside of scope.

PSB has informed agency that they are going to deem all contractors inside as they don't want to take the risk. PSB has said to agency they agree I'm outside but they're not going to declare me outside due to risk of penalty and other contractors are inside and they don't want mutiny in the camp by me being outside!

I appreciate it's my discretion to leave but surely something must be done about this as that's not what was intended by the change. I only work for Local Authorities, thats not to say I cant work in private practice but my experience is 14 years in Local Government so that's where my skill lies better.

What are peoples views?

You are aware that the blanket everyone is inside approach is the one HMG was hoping for...

And its understandable if the PSB is both risk adverse and poorly advised..

Personally I would be invoicing for the week citing the change in contract circumstances and not returning on Monday.

Qdos Contractor
17th March 2017, 18:18
There is a strong likelihood that the final legislation, released on Monday, will include a clear 'reasonable care' provision on the part of the PS body making the determination. Something OP's client clearly isn't doing.

It will probably state that, if they don't show reasonable care, they will become the 'fee payer'.

hollyblue
20th March 2017, 18:12
There is a strong likelihood that the final legislation, released on Monday, will include a clear 'reasonable care' provision on the part of the PS body making the determination. Something OP's client clearly isn't doing.

It will probably state that, if they don't show reasonable care, they will become the 'fee payer'.

Thanks for your response, that's helpful. Do you know if the legislation has been published now? And where I can access if please.

Qdos Contractor
20th March 2017, 22:54
Thanks for your response, that's helpful. Do you know if the legislation has been published now? And where I can access if please.

Finance Bill here (https://www.publications.parliament.uk/pa/bills/cbill/2016-2017/0156/17156.pdf).

Page 136 of the doc has the reasonable care provision I referred to.

jamesbrown
20th March 2017, 23:22
Finance Bill here (https://www.publications.parliament.uk/pa/bills/cbill/2016-2017/0156/17156.pdf).

Page 136 of the doc has the reasonable care provision I referred to.

Yep.


If—[...] the client complies with the duty under subsection (1) but fails to take reasonable care in coming to its conclusion as to whether the condition in section 61M(1)(d) is met in the case [...] section 61N(3) and (4) have effect in the case as if for any reference to the fee-payer there were substituted a reference to the client, but this is subject to section 61V

Translated: if the PSB is negligent in their assessment and that assessment is subsequently found to be wrong, the liability rests with the PSB, assuming the PSB wasn't acting on fraudulent information. Of course, what constitutes "reasonable care" is arguable in the context of the ESS, since it wasn't put together with reasonable care. :laugh

WordIsBond
21st March 2017, 08:36
It's easy for me to say, because I could walk away and not have to work again. But I'd be very ready to walk away.

I'd explain it to them this way. 1. If they declare you inside on this contract, HMRC is likely to go back and say your previous contracts with them were inside as well, and it is going to cost you a lot of money, not just on your current contract. 2. The legislation calls for "reasonable care" in making the assessment, and that isn't what they are doing. 3. If they won't exercise reasonable care, you understand that, but you can't stay in the same contract via the same agency, and you'll be giving notice.

If they want you back, they have the following options.
1. Declare you outside IR35 (which they know is the truth, anyway).
2. Offer you a new contract through a different agent, at a rate sufficient to compensate for being declared inside on the new contract. (This probably gives you some protection from the en masse investigation that is coming of everyone who stays in the same contract and is now declared inside.)
3. Offer you a new contract direct (no agent), at a rate sufficient to compensate for being declared inside. (But make sure you have enough funds to carry you through if they are late payers, if you go direct.)

That's what I'd do.

You are taking a huge risk if you stay with the same agent and are declared inside. PERHAPS if you can get them to put in writing that they know you are outside, but are declaring everyone inside because of risk aversion, that would give you a chance to fight off any retroactive investigations. But I wouldn't risk it. You either need a new client or a new agent.

malvolio
21st March 2017, 10:07
.... PERHAPS if you can get them to put in writing that they know you are outside, but are declaring everyone inside because of risk aversion, that would give you a chance to fight off any retroactive investigations. But I wouldn't risk it. You either need a new client or a new agent.

That's an interesting approach: "We know what the law is but we're going to ignore it because it is safer to do so"... :smile

But the outside determination in this brave new fantasy world is actually quite simple. If you are providing a service or a physical deliverable you are outside. "Service" in this context means something like being engaged as a member of a fully outsourced, managed service such as a Service Desk function, or - more relevantly to most of us - providing a skill set that is not available within the client's staff, such as technical knowledge of a given CRM system or expert consultancy at some level, such as service architecture or Testing Strategy. Being any sort of general purpose PM, tester, coder or ops staff isn't it, regardless of the accepted nature of your engagement..

BrilloPad
21st March 2017, 10:22
That's an interesting approach: "We know what the law is but we're going to ignore it because it is safer to do so"... :smile


I have seen it before with social services. The government seems to be allowed to break laws without sanction.

chineseJohn
21st March 2017, 19:52
The NHS organisation I'm at has made a blanket decision.

They've also made a policy of no substitution.

notahappybunny
21st March 2017, 20:17
NHS blanket outside..........never used the tool but consulted a "specialist advisor" apparently.

chopper
21st March 2017, 21:38
Surely the 'reasonable care' clause applies to them declaring you inside if you are inside, rather than declaring you outside if you are outside?

If they declare you in outside instead of inside and didn't take reasonable care in coming to that conclusion, then the client would be liable for the tax.

If they declare you inside instead of outside, then the exchequer hasn't lost out and so there is nothing for the client to be liable for.

jamesbrown
21st March 2017, 23:22
Surely the 'reasonable care' clause applies to them declaring you inside if you are inside, rather than declaring you outside if you are outside?

If they declare you in outside instead of inside and didn't take reasonable care in coming to that conclusion, then the client would be liable for the tax.

If they declare you inside instead of outside, then the exchequer hasn't lost out and so there is nothing for the client to be liable for.

It's a circle jerk in the latter scenario, I agree, but the PSB and HMRC/HMG are not the same things, and the PSB can still have a liability to central gov't. The clause on reasonable care is intended to ensure that the PSB makes a realistic assessment, either way. If they don't, the liability falls on the PSB, whether that liability is to HMRC/HMG (wrongly declared outside) or to the contractor (wrongly declared inside). In your scenario (wrongly declared inside), it would be justiciable, were the contractor to pursue it. The courts would need to decide on the precise meaning and consequences, but it's clear that the PSB would pay (not central gov't). Also note that reasonable care does not mean getting it right every time.

DKB
22nd March 2017, 12:39
Surely the 'reasonable care' clause applies to them declaring you inside if you are inside, rather than declaring you outside if you are outside?

If they declare you in outside instead of inside and didn't take reasonable care in coming to that conclusion, then the client would be liable for the tax.

If they declare you inside instead of outside, then the exchequer hasn't lost out and so there is nothing for the client to be liable for.

Public bodies forced to take 'reasonable care' over contractors' IR35 status :: Contractor UK (http://www.contractoruk.com/news/0012948reasonable_care_clause_put_new_ir35_legisla tion.html)

Bluenose
22nd March 2017, 12:58
“Put simply, this [new reasonable care clause at 61T6c)] means that public sector clients must not make general, blanket determinations” of contractors’ IR35 status, says Qdos Contractor.

harumph !

teapot418
22nd March 2017, 13:38
“Put simply, this [new reasonable care clause at 61T6c)] means that public sector clients must not make general, blanket determinations” of contractors’ IR35 status, says Qdos Contractor.

harumph !

No real clarity about what the individual can do if the client has made a blanket (inside) determination though.

hollyblue
23rd March 2017, 18:38
Client cannot be swayed and have determined me inside, even though my T&C are completely different to the other 'contractors' in the team and they have stated that they are treating us all the same. They are clearly concerned that if the others find out they'll all want to re-negotiate same as me.

I'm resigned that to remain in this contact I'm going to have to be inside. It's a very local role to home and the T&C I've agreed with them are quite favourable. Putting that aside, given that this is only my 2nd week in this role and I have changed PSB and Agency are my chances of retrograb reduced do we think?

WordIsBond
23rd March 2017, 19:10
Putting that aside, given that this is only my 2nd week in this role and I have changed PSB and Agency are my chances of retrograb reduced do we think?
Nobody knows, of course, but I'd guess so.

But I would definitely declare the first few weeks of this contract as inside, if you stay. That way, if ever investigated, you can claim to be responsible about IR35, otherwise you look like a tax dodger for a few weeks worth of tax savings. Don't do that.

I'd also be telling them if they are going to put their hands in your pocket and rip you off just so they can avoid conflict among other contractors that they should at least uplift your rate by 15% to cover the employers NI.

eek
24th March 2017, 23:05
No real clarity about what the individual can do if the client has made a blanket (inside) determination though.

I half suspect it's intentional. I remember when we first looked at things this time last year we couldn't work out how you could appeal an inside decision (who you appeal to, how you could remain in contract while the appeal was heard, how and who repairs National Insurance payments which are per week / month so not reclaimable in the way income tax could possibly be)... and as you say we still don't know how and when you could do so...

And that was why come October everyone around here was saying that the only appropriate attack is probably to seek employment rights...

midlandlass
27th March 2017, 11:37
“Put simply, this [new reasonable care clause at 61T6c)] means that public sector clients must not make general, blanket determinations” of contractors’ IR35 status, says Qdos Contractor.

harumph !

The irony - today I got a call from a contractor within HMRC saying they had made the blanket decision for inside too :facepalm:

marius123
27th March 2017, 13:23
The irony - today I got a call from a contractor within HMRC saying they had made the blanket decision for inside too :facepalm:

Yep. HMRC's digital transformation guys declared all contractors inside last Monday. They're losing a lot of talented people.

northernladyuk
27th March 2017, 13:32
Yep. HMRC's digital transformation guys declared all contractors inside last Monday. They're losing a lot of talented quislings.

FTFY

Andy Hallett
27th March 2017, 15:32
We've just had a trust refuse to deal with PSC's to be fair the first we had.

midlandlass
27th March 2017, 15:37
A little panic in this last week is what we are seeing at this moment in time :eek

John Lane
28th March 2017, 06:58
All contracts ended by capita then any renewal by umbrella only - sort of blanket decision, but not.?...

LoughriggFell
28th March 2017, 08:37
Similar situation, one agency terminated all contracts on the 19th and restarted as an umbrella on 20th stating

'In some cases PSC’s, whether paid gross or net will not be allowed in the supply chain'

I guess you don't need to take "reasonable care" if you just ban PSC's.

LondonManc
28th March 2017, 08:49
We've just had a trust refuse to deal with PSC's to be fair the first we had.

Is that despite you trying to educate them?

They do realise it will be cheaper for them to take outside IR35 PSCs on, don't they?

gables
28th March 2017, 09:43
Are we seeing a similar situation to that in the 70s where a rule\legislation (I'm unclear on the details) was introduced which effectively meant trading as a sole trader via an agent became impossible as they insisted on Ltd?

jamesbrown
28th March 2017, 10:52
I guess you don't need to take "reasonable care" if you just ban PSC's.

Right. If a PSB is looking to make a blanket inside determination, or an agency is looking to avoid any risk, this is how they will/should to it, mechanically, given the new reasonable care provision.

northernladyuk
28th March 2017, 11:06
Just talking to a former contractor colleague at an NHS Trust.

He pointed out that the legislation has a due care clause which doesn't allow them to blanket review the roles, which is what they previously did (i.e. all inside IR35). He is outside IR35 now.

LondonManc
28th March 2017, 11:14
Just talking to a former contractor colleague at an NHS Trust.

He pointed out that the legislation has a due care clause which doesn't allow them to blanket review the roles, which is what they previously did (i.e. all inside IR35). He is outside IR35 now.

Unfortunately many contractors won't be aware of this clause. :(