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View Full Version : HMRC 'delays' blamed for last-minute public sector IR35 compliance panic - agree?



KUWTC
4th April 2017, 10:11
What do you make of the findings/opinions in this article about HMRC's delivery timeline for various IR35-related things?

http://www.computerweekly.com/news/450416182/IR35-reforms-HMRC-delays-blamed-for-last-minute-public-sector-compliance-panic

BlueSharp
4th April 2017, 10:36
What do you make of the findings/opinions in this article about HMRC's delivery timeline for various IR35-related things?

http://www.computerweekly.com/news/450416182/IR35-reforms-HMRC-delays-blamed-for-last-minute-public-sector-compliance-panic

I know that the Home Office HR has gone in to melt down dealing with the IR35 change, staff are being pulled from normal HR duties to help deal with assessing roles.

Guesstimator
4th April 2017, 10:52
HMRC aren't remotely to blame, the IR35 legislation hasn't changed.

Organisational HR are to blame for any and all of the issues witnessed.

ETA: I realise the implementation and its details emerged late, however the proposed changes have been known about in principle for months.
The tool isn't the be all and end all for the decision making process...TBH I think all this has done is highlight exactly how HR understand the IR35 legislation and generally inept they are as departments.

northernladuk
4th April 2017, 10:52
Interesting to see this...


“The final IR35 legislation states public sector bodies have a duty to take reasonable care over making these [tax status] determinations, but this is not what we’re seeing in practice,” Julia Kermode, CEO of The Freelancer & Contractor Services Association (FCSA) told Computer Weekly.

Don't think I've head of this org before. I don't want to open a can of worms but I don't see much about this whole carry on on their site at all. Is that because i'm not a member and if I was I would have seen it? If I do a google search for FCSA IR35 I see a lot of comments about FCSA welcoming amendments and blasting the reforms. Does anyone know if they actually did anything though?

TheFaQQer
4th April 2017, 11:09
Don't think I've head of this org before. I don't want to open a can of worms but I don't see much about this whole carry on on their site at all. Is that because i'm not a member and if I was I would have seen it? If I do a google search for FCSA IR35 I see a lot of comments about FCSA welcoming amendments and blasting the reforms. Does anyone know if they actually did anything though?

FCSA are the trade body for umbrellas, payroll providers, accountants etc that work with contractors - so not something that many contractors would really have any contact with.

You can read their official response to the consultation here (http://www.fcsa.org.uk/wp-content/uploads/2016/08/FCSA-response-offpayroll-working-in-the-public-sector.pdf) and their response to the Autumn Statement is on their website here (http://www.fcsa.org.uk/fcsa-reacts-autumn-statement/). They have spoken out about the apprenticeship levy (which may well fall onto contractors in the public sector who are forced onto payroll) as well.

BoredBloke
4th April 2017, 14:38
HMRC aren't remotely to blame, the IR35 legislation hasn't changed.

Organisational HR are to blame for any and all of the issues witnessed.

ETA: I realise the implementation and its details emerged late, however the proposed changes have been known about in principle for months.
The tool isn't the be all and end all for the decision making process...TBH I think all this has done is highlight exactly how HR understand the IR35 legislation and generally inept they are as departments.

They have to take a hefty portion of the blame. They promised a tool to assess the roles which was delivered far too late. IR35 is not that easy for a HR person to determine. Lookm how long investigations go on for. It's based on case law and you have to take lots of variables into account. To push this out to the various HR departments without giving the tools to do the job it totally HMRC's fault.

Guesstimator
4th April 2017, 15:07
They have to take a hefty portion of the blame. They promised a tool to assess the roles which was delivered far too late. IR35 is not that easy for a HR person to determine. Lookm how long investigations go on for. It's based on case law and you have to take lots of variables into account. To push this out to the various HR departments without giving the tools to do the job it totally HMRC's fault.

Fair points, though I take issue with it "not being easy for an HR person to determine"...the fact is it's their job (by which I mean, the entire department) to know and understand the legislation as it applies to their organisation and so I have little sympathy. The online tool doesn't have to be used. I daresay most organisations will, because they've left it so late, even though it's just a dumbed down way of producing a quick, easy answer with side order of obfuscation which, when combined with a soupcon of risk aversion, will lead to HMRC's preferred determination.

To use the online tool correctly, the end engager should still understand the legislation...but I guess that's the beauty (in HMRC's eyes) of the tool, they don't have to.

However, that's letting the end client off the hook IMO; they've had months to prepare for this, and the tools that actually matter have been around for years, since the introduction of the legislation.

I guess one positive of this is that it's truly focusing the mindset of HR on something they've previously had little to do with, in spite of them always having (theoretically) been an intrinsic part of the evaluation. They've got away with it until now because they've not been held accountable for their end of the process.

I'm fairly certain that were HR as a whole have understood their role in determining IR35 then the majority of investigations would be over before they began....and there'd be a lot fewer Ltd companies to begin with.

BoredBloke
4th April 2017, 16:22
Fair points, though I take issue with it "not being easy for an HR person to determine"...the fact is it's their job (by which I mean, the entire department) to know and understand the legislation as it applies to their organisation and so I have little sympathy. The online tool doesn't have to be used. I daresay most organisations will, because they've left it so late, even though it's just a dumbed down way of producing a quick, easy answer with side order of obfuscation which, when combined with a soupcon of risk aversion, will lead to HMRC's preferred determination.

To use the online tool correctly, the end engager should still understand the legislation...but I guess that's the beauty (in HMRC's eyes) of the tool, they don't have to.

However, that's letting the end client off the hook IMO; they've had months to prepare for this, and the tools that actually matter have been around for years, since the introduction of the legislation.

I guess one positive of this is that it's truly focusing the mindset of HR on something they've previously had little to do with, in spite of them always having (theoretically) been an intrinsic part of the evaluation. They've got away with it until now because they've not been held accountable for their end of the process.

I'm fairly certain that were HR as a whole have understood their role in determining IR35 then the majority of investigations would be over before they began....and there'd be a lot fewer Ltd companies to begin with.

There are lawyers who have made a lot of money out of IR35 - HMRC have taken contractors to tribunals with cases they thought they would win and lost....lost after lots of legal wranglings. Do you really think it is fair to expect a person in HR to be an employment law expert? It shows just how cumbersome IR35 is and why rather than extending it they should have looked at replacing it with something that was actually fit for purpose.

Guesstimator
4th April 2017, 17:01
There are lawyers who have made a lot of money out of IR35 - HMRC have taken contractors to tribunals with cases they thought they would win and lost....lost after lots of legal wranglings. Do you really think it is fair to expect a person in HR to be an employment law expert? It shows just how cumbersome IR35 is and why rather than extending it they should have looked at replacing it with something that was actually fit for purpose.

I don't disagree one iota with your last sentence however, that's not the issue being spoken of in the article which is that the last minute compliance is somehow the fault of HMRC. It's simply not.

Bear in mind that, as I've said, I'm not talking of specific individual's ability or otherwise, but the ability of a department of an organisation.

But I don't really see see what lawyers or tribunals have to do with this, PSB's are making the determinations now , so it's evidently not an impossible task...that process could have been done and dusted months ago when the proposals were first put out there since there was certainly enough meat on the bones to see what was going to happen. Nothing about IR35 has changed except the PSB is now in the loop for a "mis-determination".

Frankly yes I do expect anyone making the decision on IR35 on behalf of the end engager to be competent enough, or given sufficient guidance, to make an informed decision.

If the HR department in a PSB isn't collectively capable of understanding employment law, or realising that they're not and seeking professional advice, then that's extremely worrying but blaming HRMC just smacks of buck passing to me. I don't understand the motivation for leaving it so late by the PSBs I guess

Guesstimator
4th April 2017, 17:56
They have to take a hefty portion of the blame

After thinking about it some more... Yeah i agree.
Me saying "not remotely" is patent bollocks, they do.
I just think the PSBs that are complaining could have engaged with the process earlier than it sounds like they have if the delivery date of the tool is such an issue for them.

b r
5th April 2017, 08:15
Do you really think it is fair to expect a person in HR to be an employment law expert?

Er, yep.

At least I expect that the HR dept either employs someone who is or contracts it out, and if they don't then they're the ones failing.

FWIW in my last contract, a 20-person business, one of the first things I did was find a local expert who'd help us (after a few paid-for pieces of work I engaged him on a retainer).