new IR35 tool

[alfie2244]

daemon said:

alfie2244 said:

daemon said:

Yup. I have my resign date calculated out to work my weeks notice, get paid the following week and be off their books before 5th April. (Actually by 31st March)

I've a holiday booked to bugger off somewhere hot on the 1st April for a well earned break.

We turned a Private sector contract down last week due to being fully engaged in PSB contracts, one of which has just asked to extend for a 2nd time. (Currently due to expire mid May)

We have declined to extend due to the PSB not yet being able decide whether the contract falls within IR35 in their opinion, the middleman agency trying to maneuver us into an umbrella company and our concerns of not wishing to fall foul of IR35 rules..........we will probably soon be issuing a 28 day termination letter to finish and be paid by April 5th instead.

Yes, there is going to be carnage out there when they fully realise the impact of this.

The PSBs we are working for are all but begging us to continue..the reason they use us is they can't get PAYE people..go figure.

Best get down to boat and get ready for the spring cruise

[alfie2244]

rustyuk said:

alfie2244 said:

Little update....this test asked more detailed questions and gave a solid pass.

https://www.ir35testing.co.uk/

That test has nothing to do with HMRC!

AFAIK the HMRC test is not live yet so just practicing at the moment.

I realise it doesn't really matter what we think as it will be down to the PSB / Agents, their own confidence in being able to accurately asses the criteria and their aversion to taking risks.

Even though (temp) uplifts in rates are being mooted, we have resigned ourselves to shortly issuing 28 days notices and concentrating on private sector in future.

My main concern now is ensuring getting all invoice paid by Apr 5th.

Such a shame that genuine contractors will suffer because of others.

[alfie2244]

So who would become the employer, the PSB, Umbrella Co or the Agency?

[alfie2244]

Shambles, cutting it fine........a very good assessment Eric.

[alfie2244]

daemon said:

Of the 7 or so contractors i am having conversations with here ALL are leaving if they're deemed inside IR35.

Theres 3 of us on a smallish but critical high profile project here, and we're all going. Thats everyone on the project going.

Out of the rest of the pool of contractors, I think there will be some stay but

(a) they'd be very foolish to just let the contract roll on
(b) they're maybe working close to home anyway so its still better than working away.
(c) to a lot of people, half a cake is better than no cake at all.

I'm just not prepared to risk the retro investigation. Not that i cant defend my outside of IR35 stance quite easily, but i dont fancy a full blown invasive investigation maybe dragging on for years.

Make that 8.

[alfie2244]

daemon said:

?

Whos this aimed at?

As a PSC i legitimately claim expenses from my business address and client site, and any subsistence / overnight costs associated.

This has NOT changed as of April 6th 2016.

IF i was operating via an umbrella company, then correct, i couldnt claim travel and subsistence.

IIRC Countdown deleted a post querying the loss of £00o's in expenses but I may be going senile.

As I see it at the moment - feel free to correct if wrong:

Inside IR35 Through Ltd = max £5k expenses (accounts, insurances etc) + PAYE tax and NI deducted by payer, no holiday / sick pay.

Inside IR35 through Umbrella = No expenses + PAYE tax and NI deducted + NO holiday pay / sick pay etc + umbrella admin fee.

Directly employed = PAYE / NI etc + Holidays / sick pay, employment rights etc which may be OK for some if local but not if 130 miles away and hotels 4 nights a week.

There are other issues around V.A.T., retrospective HMRC inspections + the fact that the determination tool not yet available with most contracts having 28 day notice periods and or monthly payment terms yet cut off point is 5th of April.

PSB's will be responsible for making IR35 IN / OUT determinations yet the payer (agency) will have to pay the penalties if the decision turn out to be wrong!

From what I have heard, many agencies or contractors still don't know what to do and appear to be hoping it will go away or be deferred..... Complete shambles IMO and future Public sector work is looking very unlikely and 28 notice will be issued 24th Feb.

[alfie2244]

I now believe the new tool will be available 8th of March - so insufficient time to get a determination and leave before 5th April if on 28 day notice and get paid if on monthly payments! 100% notice issued on Friday now.... Farcical.

Edited by alfie2244 on Tuesday 21st February 11:16

[alfie2244]

daemon said:

Alex said:

I'm in a private contract, but if I was in a contract with a PSO and they deemed me to be inside IR35, I would insist on changes to my working practices until they agreed I was outside IR35. If they wouldn't do that, I would walk.

Thats exactly our approach. "More than happy to continue working, however only in an outside of IR35 capacity, and happy to make whatever adjustments necessary to working practices to ensure that can happen"

Otherwise its Adios Amigo!

How long, if ruled outside, would you be happy to continue a contract for before becoming concerned that too long may indicate it should have been ruled inside....if that makes sense?

[alfie2244]

daemon said:

alfie2244 said:

daemon said:

Alex said:

I'm in a private contract, but if I was in a contract with a PSO and they deemed me to be inside IR35, I would insist on changes to my working practices until they agreed I was outside IR35. If they wouldn't do that, I would walk.

Thats exactly our approach. "More than happy to continue working, however only in an outside of IR35 capacity, and happy to make whatever adjustments necessary to working practices to ensure that can happen"

Otherwise its Adios Amigo!

How long, if ruled outside, would you be happy to continue a contract for before becoming concerned that too long may indicate it should have been ruled inside....if that makes sense?

I've a couple of months left of this "phase" to get it over the line. I guess the PSO will review their staffing requirements for the next phase.

If a role was deemed outside, then thats it really - unless its retested periodically i guess.

Edited by daemon on Tuesday 21st February 14:53

I understand your thinking (I may be overthinking this myself as my paranoia switch has been activated) I wondered if there was an alert activated in HMRC towers somewhere that gets triggered if a contract stays outside IR35 for long periods of time. Bearing in mind it would appear that the determination appears to be the responsibility of Public Sector employees , line managers, who may or may not have a full understanding of the new criteria and it not even being compulsory to use the new tool.

[alfie2244]

All of which has little to do, if anything, with IR35 Ltd Co contracting.......

[alfie2244]

Worth a read:

http://www.contractoruk.com/news/0012908government...

[alfie2244]

daemon said:

sparks85 said:

Hypothetical question - the PSO I work in is cutting it very fine to decide what they're going to do and process all the contractors. They can barely find their proverbial with a map and two hands let alone assess and process new contracts where applicable for all 10k+ contract staff in 3 to 4 weeks.

Come 6th April, what happens to existing contracts if they haven't got round to determining status of contracts? Do they continue as per the contractors own assessment until the PSO assess it?

Would the PSO be able to backdate their assessment to 6th April?

They need to have the decision made by 6th April. Many are opting for a global "in"....

Is 6th April early enough?

[alfie2244]

Well the decision has been made....Agency argue it is outside.....PSB argue it is inside........28 days notice sent .......... hello private sector

[alfie2244]

daemon said:

alfie2244 said:

Well the decision has been made....Agency argue it is outside.....PSB argue it is inside........28 days notice sent .......... hello private sector

Why not do a QDOS test on it?

The result indemnifies you, the agency and the PSO?

The PSB apparently got "somebody" to look at it (probably a contractor) so it's their decision to make and not prepared to argue............have other irons in the fire so their loss AFAIAC.

[alfie2244]

Alex said:

alfie2244 said:

Well the decision has been made....Agency argue it is outside.....PSB argue it is inside........28 days notice sent .......... hello private sector

Did they offer a rate increase to compensate?

No because working inside IR35 via umbrella or direct employee is not an option + want to break the chain just in case.

Edited by alfie2244 on Friday 24th February 13:25

[alfie2244]

Uncle John said:

bigandclever said:

Uncle John said:

Anyhow, can someone clear up for me please, whether if you go umbrella, does it exempt you from in or out of IR35?

IR35 doesn't apply to employees. And if you work through a brolly you're an employee, so you get taxed as such.

Thanks....


.....and by default means you are admitting you were an employee before and hence will be on HMRC's radar?

Potentially but, no offence, IIRC it's your 1st contract so would guess you may be small fry in the scheme of things.

[alfie2244]

Uncle John said:

alfie2244 said:

Uncle John said:

bigandclever said:

Uncle John said:

Anyhow, can someone clear up for me please, whether if you go umbrella, does it exempt you from in or out of IR35?

IR35 doesn't apply to employees. And if you work through a brolly you're an employee, so you get taxed as such.

Thanks....


.....and by default means you are admitting you were an employee before and hence will be on HMRC's radar?

Potentially but, no offence, IIRC it's your 1st contract so would guess you may be small fry in the scheme of things.

Nope, been doing it 10 years.

Same PSO / agency etc?

eta

Uncle John said:

I currently work for a local authority, my first public sector position, which is just my luck!

[alfie2244]

daemon said:

Nothings changed. Thats the point.

However its "easy" for PSOs to tar everyone with the same brush because it reduces risk for them.

The people who should be pushing back in these organisations and going "hang on, these people are clearly outside of IR35, and heres why" are too spineless to do that.

The new HMRC tool is skewed towards getting people inside IR35, so PSOs will cite inputting details into that and getting the outcome as being "in" IR35 as definitive.

Its not.

If you picked 100 contractors at random and applied the IR35 legislation to their contracts, roughly 30% would be in, 30% would be out and 40% would be debatable.

With the HMRC IR35 tool, 95% are in - because its based on HMRCs skewed view of the legislation.

I have no doubt my current role is outside of IR35, however i've likewise no doubt that its about to be deemed "inside" by the PSO i am contracted to as they're going to take the lazy option and deem us all in.

Hows that fair?

^^^^^ This.

Although determinations are already being made yet the IR35 tool is not even available. Even when it is it will not be compulsory to use and the decisions can be made by people not trained in or fully understand IR35 rules and regulations (from my research not many do).

The new regs start 6th April so any "contractors" on Monthly payments need to either resign now or take the risk of being ruled inside IR35 (rightly or wrongly)Tax, employers & employees NI deducted as per any other employee yet none of the benefits, holiday, sick pay etc. Plus the added bonus of not being able to claim expenses (not sure many PAYE employees would work 150 miles from home, stay in rented accommodation and yet not get any expenses whatsoever).

And to top it all, should this untrained person, decide your contract now to be inside IR35, incorrectly, it raises the possibility of the HMRC doing a retrospective investigation of your previous contracts.


I also note "Umbrellas" being investigated by MP's due to potential "exploitation" of workers

http://www.bbc.co.uk/news/uk-england-39058166

eta Doesn't look like Unite are too impressed with umbrellas either:

http://www.unitetheunion.org/news/unite-demands-go...

Edited by alfie2244 on Saturday 25th February 11:55

[alfie2244]

bigandclever said:

alfie2244 said:

eta Doesn't look like Unite are too impressed with umbrellas either:

http://www.unitetheunion.org/news/unite-demands-go...

No they're not, neither are the TUC and UCATT, but that's not an IR35 thing.

It is when the agencies stock initial solution, as experienced, is you will have to go umbrella if ruled inside IR35.......not on your nelly was the terse reply

[alfie2244]

Bit late IMO:

http://www.contractoruk.com/news/0012920public_bod...