Opinions on IR35 and its impact on contractors?
Discussion
I dont think it will make that much of a change, i worked for a government agency for a while 80% of staff contractors. When the IR35 rules came into force people high up in the business did everything they could to keep contractors off IR35 it was silly. They know they cant get the resource with the salary they pay. They even introduced another company so the workers could subcontract to them, it did mean the goverment had been paying more money out its crazy.
When it finally comes to the private sector just means the roles that shouldn't be contractor based anyway (Directors, Managers etc) will be filled by full time employees and skilled work/implementation - handover will still go to the contractors. It will just mean more flexibility for the contractors at the end of the day and having to do projects rather than roles. all in my opinion of course
When it finally comes to the private sector just means the roles that shouldn't be contractor based anyway (Directors, Managers etc) will be filled by full time employees and skilled work/implementation - handover will still go to the contractors. It will just mean more flexibility for the contractors at the end of the day and having to do projects rather than roles. all in my opinion of course
Dan_M5 said:
I dont think it will make that much of a change, i worked for a government agency for a while 80% of staff contractors. When the IR35 rules came into force people high up in the business did everything they could to keep contractors off IR35 it was silly. They know they cant get the resource with the salary they pay. They even introduced another company so the workers could subcontract to them, it did mean the goverment had been paying more money out its crazy.
When it finally comes to the private sector just means the roles that shouldn't be contractor based anyway (Directors, Managers etc) will be filled by full time employees and skilled work/implementation - handover will still go to the contractors. It will just mean more flexibility for the contractors at the end of the day and having to do projects rather than roles. all in my opinion of course
Lets hope you're right When it finally comes to the private sector just means the roles that shouldn't be contractor based anyway (Directors, Managers etc) will be filled by full time employees and skilled work/implementation - handover will still go to the contractors. It will just mean more flexibility for the contractors at the end of the day and having to do projects rather than roles. all in my opinion of course
BBC accused of not untangling 'mess' over freelancers' tax
https://www.bbc.co.uk/news/business-46212606
The BBC has been accused of not "fully untangling" the "mess" over some presenters' tax affairs.
The chair of the Public Accounts Committee, Meg Hillier MP, said some freelancers had been left in "desperate circumstances".
Her comments come as the spending watchdog, the National Audit Office, published a report into the BBC's arrangements with its freelance staff.
It found 800 BBC presenters could potentially be asked to repay tax.
Some presenters' unpaid tax bills from HMRC run into thousands of pounds.
And HMRC is currently investigating around 100 BBC freelance staff, the report said.
The BBC said it "recognises there are still issues to address and remain committed to resolving them".
What is the controversy about?
The BBC hires thousands of freelancers: in 2017-18 it hired 60,000 including actors, entertainers and off-air workers.
Some of the freelancers it hires operate as a "personal service company". This means the person is self-employed, rather than being employed onto the BBC's payroll. It is legal and is common across the media industry.
Before April 2017, any freelancer working for the BBC as a PSC had to inform HMRC of their employment status for tax purposes - such as self-employed or employed - ensuring they would pay the correct amount of tax.
But after April 2017, a change in the law meant it was up to public bodies like the BBC to become responsible for determining the employment status of PSCs it hired..................continues
So a complete f
k up due to a law introduced by the government. You know, the Conservatives, they who said they'd get rid of IR35 in their election manifesto!!
https://www.bbc.co.uk/news/business-46212606
The BBC has been accused of not "fully untangling" the "mess" over some presenters' tax affairs.
The chair of the Public Accounts Committee, Meg Hillier MP, said some freelancers had been left in "desperate circumstances".
Her comments come as the spending watchdog, the National Audit Office, published a report into the BBC's arrangements with its freelance staff.
It found 800 BBC presenters could potentially be asked to repay tax.
Some presenters' unpaid tax bills from HMRC run into thousands of pounds.
And HMRC is currently investigating around 100 BBC freelance staff, the report said.
The BBC said it "recognises there are still issues to address and remain committed to resolving them".
What is the controversy about?
The BBC hires thousands of freelancers: in 2017-18 it hired 60,000 including actors, entertainers and off-air workers.
Some of the freelancers it hires operate as a "personal service company". This means the person is self-employed, rather than being employed onto the BBC's payroll. It is legal and is common across the media industry.
Before April 2017, any freelancer working for the BBC as a PSC had to inform HMRC of their employment status for tax purposes - such as self-employed or employed - ensuring they would pay the correct amount of tax.
But after April 2017, a change in the law meant it was up to public bodies like the BBC to become responsible for determining the employment status of PSCs it hired..................continues
So a complete f
k up due to a law introduced by the government. You know, the Conservatives, they who said they'd get rid of IR35 in their election manifesto!!robinessex said:
The BBC hires thousands of freelancers: in 2017-18 it hired 60,000 including actors, entertainers and off-air workers.
These aren't really freelancers in my opinion. They work for the BBC, admittedly on lots of short term projects, but that's because the output of the BBC consists of lots of short term projects. The BBC could employ them on fixed term contracts but it doesn't, possibly because it's beneficial for both the Beeb and the Individual for them to be regarded as self employed.robinessex said:
Some of the freelancers it hires operate as a "personal service company". This means the person is self-employed, rather than being employed onto the BBC's payroll. It is legal and is common across the media industry.
Operating under a PSC may well be legal and common, it doesn't automatically mean that the person is self-employed. Theoretically a teacher in a secondary school could operate via a PSC (some do). That doesn't automatically mean they should be treated as "self employed" if they are working as a de-facto employee. If you're doing the same work as colleagues who are employed, if you have a line manager, if you line manage others, if you're required to be at work every day at a certain time and you have to do a certain number of hours, if you can't send a replacement (and there are other tests as well) then you may actually be an employee. In the example of BBC freelancers I wonder how many newsreaders can rock up at 10:15pm instead of 10pm?robinessex said:
Before April 2017, any freelancer working for the BBC as a PSC had to inform HMRC of their employment status for tax purposes - such as self-employed or employed - ensuring they would pay the correct amount of tax.
But after April 2017, a change in the law meant it was up to public bodies like the BBC to become responsible for determining the employment status of PSCs it hired..................continues
The rule changed for one simple reason ; it's easier for HMRC to chase a few Employers than a multitude of "Self employed".But after April 2017, a change in the law meant it was up to public bodies like the BBC to become responsible for determining the employment status of PSCs it hired..................continues
We have genuine consultants at work - people who are contracted to provide a service that we couldn't provide in-house on a cost-effective basis. We even use IT Consultants occasionally; they will come in for 2 to 3 weeks do do ad-hoc bits of work (mainly trying to fix SAP). What we don't have any more is people doing 3rd level IT helpdesk who are hired through Randstad and who invoice Randstad via a PSC.
Countdown said:
Operating under a PSC may well be legal and common, it doesn't automatically mean that the person is self-employed. Theoretically a teacher in a secondary school could operate via a PSC (some do). That doesn't automatically mean they should be treated as "self employed" if they are working as a de-facto employee. If you're doing the same work as colleagues who are employed, if you have a line manager, if you line manage others, if you're required to be at work every day at a certain time and you have to do a certain number of hours, if you can't send a replacement (and there are other tests as well) then you may actually be an employee.
Ok. But consider music teachers. You might have a scenario where you have someone whose primary line of income is gigging in their band, producing music, doing private tuition, and also going to various schools to do music tuition. Are they an employee of each school to which they provide music lessons?
What if at some stage they happen to have only one school to which they provide these services, but otherwise the above still holds? Where is the cut-off?
You make some fair points about direction and control, though. And those have always been big factors in determining if you are inside IR35 or outside of it. And it is up to the freelancer to keep records of the day-to-day reality so they can continuously show they are outside of IR35.
But if you hand the decision to the engager, to whom the decision is an annoyance and for whom there is no incentive to make an informed opinion, what are they going to do? Just go for the safest option, of course, and go for a blanket "inside IR35" decision. Ker-CHING! "Thank you very much" says HMRC.
Countdown said:
The rule changed for one simple reason ; it's easier for HMRC to chase a few Employers than a multitude of "Self employed".
Exactly. 
Clockwork Cupcake said:
Ok. But consider music teachers. You might have a scenario where you have someone whose primary line of income is gigging in their band, producing music, doing private tuition, and also going to various schools to do music tuition.
Are they an employee of each school to which they provide music lessons?
What if at some stage they happen to have only one school to which they provide these services, but otherwise the above still holds? Where is the cut-off?
Good example and, as ever, the devil is in the detail. The fact that they've got multiple clients suggests that they are self employed. Do they have a contract at each school for a certain number of fixed hours per term? if so - employed at each school. Bear in mind they can be both Employees and self employed simultaneously.Are they an employee of each school to which they provide music lessons?
What if at some stage they happen to have only one school to which they provide these services, but otherwise the above still holds? Where is the cut-off?
Countdown said:
Do they have a contract at each school for a certain number of fixed hours per term? if so - employed at each school.
That is not neccessarily true - if they are required to be there at a specific time in order to provide the service then that does not automatically make them employed.Clearly turning up 30 minutes late would mean they are not able to provide the service.
The time limitation is about providing the service in an effective manner and not about control.
x5x3 said:
Countdown said:
Do they have a contract at each school for a certain number of fixed hours per term? if so - employed at each school.
That is not neccessarily true - if they are required to be there at a specific time in order to provide the service then that does not automatically make them employed.Clearly turning up 30 minutes late would mean they are not able to provide the service.
The time limitation is about providing the service in an effective manner and not about control.
Countdown said:
But control is exactly what it is. The teacher HAS to be at a certain place at a certain time. I know that's not the ONLY test in the Employee/Self employed debate but it's one of them. There's also the regularity of work aspect - if it's every week for 37 weeks then that again suggests SE. And if none of the students bother to show up it's no skin off the teacher's nose, they would still get paid. Finally if all the students's got a Grade E then the teacher will still get paid, it's not based on the quality of their work. The Employer can't turn around and say he's not happy therefore he's not paying.
They could if they were a PSC though. Crap teacher gets the cut with whatever the contractual notice is, say a week - with no explanation required or given. So if you contract a cleaning firm to send out some cleaners to clean the loos of your conference facility in anticipation of a big conference you are holding, and obviously the task has to be completed before the delegates arrive, then the cleaners are therefore your employees because the services have to be provided by a certain time? 
Clockwork Cupcake said:
So if you contract a cleaning firm to send out some cleaners to clean the loos of your conference facility in anticipation of a big conference you are holding, and obviously the task has to be completed before the delegates arrive, then the cleaners are therefore your employees because the services have to be provided by a certain time?
There is a range of tests that apply, you wouldn't look at just one aspect. So, in relation to the above- you probably wouldn't be providing the tools or equipment
- the cleaning firm could send anybody they wanted (unlikely that you could insist on fit 18 year old Romanians for example)
- the cleaning firm would be carrying out line management
- the cleaners wouldn't be line managing anybody who was your employee
Countdown said:
x5x3 said:
Countdown said:
Do they have a contract at each school for a certain number of fixed hours per term? if so - employed at each school.
That is not neccessarily true - if they are required to be there at a specific time in order to provide the service then that does not automatically make them employed.Clearly turning up 30 minutes late would mean they are not able to provide the service.
The time limitation is about providing the service in an effective manner and not about control.
Countdown said:
There is a range of tests that apply, you wouldn't look at just one aspect.
But you appeared to be doing just that. It appeared that you were arguing that because someone has to provide the services at a set time, then it is Direction and Control, and hence they were an employee. I apologise if I misunderstood.
Venturist said:
Precisely why it’s such a confusing mess, and how HMRC has played a blinder in putting the judgement responsibility and repercussions on the client.
Exactly. Much easier for an end client just to apply a blanket ruling.....Edited by Venturist on Thursday 15th November 16:03
robinessex said:
How much easier for the Tories to match their Manifesto promise, and ditch IR35. That would free up a few bods to go after multi-nationals evading £billions.
Because the multinationals have armies of lawyers and accountants. Freelancers are an easy soft target, just like motorists are too. This way the government (and I mean this apolitically - all the parties are as bad as each other) can say that they are clamping down on tax avoidance, without actually clamping down on tax avoidance.
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