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"How HMRC is going to achieve it is anybody’s guess"
Simple:
1. Data entry
2. Result - employment relationship exists
3. Public body - we can bully you and you don't have shareholders, so take PAYE on our behalf
I'm always curious when people claim "will lead to an exodus in talent" -where are these people going to? It's not like the private sector crying out for them.
More holistically, I'm not sure IR35's required to stem (massive) tax loss now the dividend tax has been introduced.
I think there's a far bigger net loss to the Exchequer through people forming companies and letting them disolve without ever accounting for taxes. And non-IR35 tax avoidance issues (multiple "mini-companies" to take the mickey on 'ers NI allowances and VAT flat rate for temporary workers employed through agencies springs to mind).
I'm always curious when people claim "will lead to an exodus in talent" -where are these people going to? It's not like the private sector crying out for them.
Many of the IT crowd and engineers are ready to jump ship and there is plenty of work elsewhere. If on the other hand you design missiles you are a bit scuppered. Rates will need to just go up.
Bear in mind that the public sector bodies don't like this. They don't want to have contractors inside IR35, because rights become an issue too under the Agency Workers Regulations. Cake and eat it.
I know right. It's hard to break into the private sector from public sector. You get pigeon holed into the public sector.
I suspect most public sector contractors will go on payroll.
I'm always curious when people claim "will lead to an exodus in talent" -where are these people going to? It's not like the private sector crying out for them.
More holistically, I'm not sure IR35's required to stem (massive) tax loss now the dividend tax has been introduced.
I think there's a far bigger net loss to the Exchequer through people forming companies and letting them disolve without ever accounting for taxes. And non-IR35 tax avoidance issues (multiple "mini-companies" to take the mickey on 'ers NI allowances and VAT flat rate for temporary workers employed through agencies springs to mind).
The exodus will be to private healthcare companies such as CareUk and Virgin running urgent care centres where these rules won't apply. One has to wonder if this is the governments intention. Or the many healthcare staff working to supplement their pensions who will decide it's not worth the bother.
It will see a public sector talent drain. The best will get work in the private sector and the worst will probably end up on the payroll.
The rules will be applied by the public sector to protect their position, i.e erring towards the contracts being inside IR35.
It seems likely that sights will be set on the private sector next and the flexibility in the labour market for project work will virtually disappear. Everyone loses.
This is all about the usual problem that an HMRC worker is pretty well always going to be on PAYE and the mindset becomes "if I can't pay less tax nor can you"
I agree that that is the HMRC mindset but don't forget that this change is politically driven. Remember all that media reporting of BBC producers, celebrities etc being paid off-payroll? MPs - especially those of a Conservative persuasion - hate the thought of anyone in the public sector being paid more than them or paying less tax.
Had my first client yesterday saying could I provide a reference as he was leaving the public sector to go private.
Great timing after my post!
Please can I have some opinions:
Client contracts for a major blue chip PRIVATE sector company who has a main onsite agency that sources contractors for their company.
Between the company and the agency they have decided that they will now start to enforce IR35 changes onto "general" contractors (i.e. low level 1's and 2's - levels go from 1-5). They have told those that are coming up on contract renewals that they will be renewed for a three month period as a Ltd company contractor they then have to make a choice during this period - either switch to umbrella/PAYE and then get renewed onto a 12 month contract (usually it's just done in 6 month periods) or leave.
Can anything be done to challenge this or is it just a case of hard luck on the client's behalf and they either change or leave. Is there an argument here that can be legally supported?
Any thoughts or guidance would be appreciated.