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Thread: IR35 and extension into the Private Sector...

  1. #1

    Default IR35 and extension into the Private Sector...

    So after the extension of IR35 legislation into the Public Sector it has been decided that IR35 will go through consultancy and roll out to the Private Sector in April 2019. The thought is the Government are losing out too much, so they are looking to push this through without any real thoughts as to how to properly implement this.

    There are a number of issues this brings up:
    - National Insurance: Needs to be passed to the employer instead of being paid by the employee.
    - Benefits: The normal benefits that the PAYE worker 'benefits' from like Holiday, Sick Pay, Pension, Life Insurance etc etc should now be available to the contractor. Personally, I cannot see how this is implementable in any way, which is why the Government are trying to rush this through without working out how to deal with these issues.
    - Flexibility: Currently I take around 50-60 days holiday a year, due to having young children and enjoying travelling – I can’t see that this will still be available as an option going forward.
    - Cost of Contractors: As Contractors pay more tax, rates will rise. This is inevitable. It will impact most however on the Public Sector, as they traditionally pay poorer than the private sector, and they will need to up their pay structures to deal with the tax losses.
    - Tax Avoidance Schemes: It’s inevitable that some people and companies will find ways around this, for example the Umbrella loan schemes that are being seen in the Public Sector Contractors.

    Personally I am in a contract until the end of the year. I may try to eek another contract out until March, but after that I will take a month or so off and see the lay of the land before deciding on my next steps. The biggest issue for me is the loss of holiday flexibility rather than anything else.

    Anyone else got any ‘inside’ knowledge, or thoughts on how to deal with this upcoming issues? I know Batman’s missus is (was) a locum nurse (or similar), and I’m interested to know how she’s dealing with it now?

  2. #2

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    IR35 has been around since Gordon Brown was chancellor. There were then and remain fairly simple ways to establish that you're a genuine contractor, rather than a 'disguised employee'.

  3. #3

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    Quote Originally Posted by Verbal View Post
    IR35 has been around since Gordon Brown was chancellor. There were then and remain fairly simple ways to establish that you're a genuine contractor, rather than a 'disguised employee'.
    Yes, I know that, but now the tests are on the employer, and it is likely that they will judge everyone inside for ease...

  4. #4

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    Quote Originally Posted by Unbelievable Jeff View Post
    Yes, I know that, but now the tests are on the employer, and it is likely that they will judge everyone inside for ease...
    In my experience, and itís one of the few areas I can add any value to, genuine independent contractors will be ok, and end clients will flex to accommodate this.

  5. #5

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    Quote Originally Posted by St Chalet View Post
    In my experience, and itís one of the few areas I can add any value to, genuine independent contractors will be ok, and end clients will flex to accommodate this.
    Quite.

    Besides, if the government really wants to hurry along the collapse of outsourcing, they'll encourage HMRC to go after the genuinely self-employed. Employers - or more strictly companies who contract out - will still need to hire genuine contractors.

    As a well-known lawyer said after the BBC legal judgement yesterday, each case is 'fact sensitive', and HMRC has had no luck in trying to establish a precedent. This is the first case HMRC has won against the BBC since IR35 became a thing -and dodgy practices with 'disguised employees' (presenters mostly) have been rife there for years.

  6. #6

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    Actually the big outsourcing companies are the ones that stand to win under the rules changes.

  7. #7

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    Quote Originally Posted by St Chalet View Post
    In my experience, and it’s one of the few areas I can add any value to, genuine independent contractors will be ok, and end clients will flex to accommodate this.
    Fingers crossed then! I'm not as confident myself, but we'll see.

  8. #8

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    Quote Originally Posted by St Chalet View Post
    In my experience, and it’s one of the few areas I can add any value to, genuine independent contractors will be ok, and end clients will flex to accommodate this.
    So, do we still think clients will flex to this? It seems that a lot of companies are already saying they'll be going down the blanket route.

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