IR35 reform in the public sector - FCSA quarterly briefing

  • By Marcus Bateson
  • 20 Apr, 2017
March 15th 2017

CookieCutter attended the FCSA quarterly briefing yesterday for a very informative afternoon on IR35 reform in the public sector. This legislation is due to be passed in the 2017 Finance Bill. There is significant confusion around this legislation with both organisations and contractors not understanding the rules and no proper guidelines from HMRC yet available.

Some key points came out which I will try and briefly describe here.

The public sector body has to reasonable care when determining the IR35 status of a role or they could find themselves responsible for the PAYE. This has been leading some bodies to blanket all roles as within IR35 as the safest option for them. This does not mean of course that the contractor cannot challenge this assessment using the HMRC ESS tool.

Once the status of the role has been set this need to be communicated to the agency. There may however be more than one agency in the contractual chain and the actual fee payer needs to ensure that they have requested the IR35 status up the chain. The public body has 31 days to respond to an agency request for the IR35 status of any role.

Contractors who work through a PSC (typical single director limited company setup) need to be careful here and may want to consider a new way of working. HMRC are now looking to police those who move from the public to private sector doing the same type of work and could fall foul of IR35.

By Marcus Bateson 20 Apr, 2017
April 18th 2017
By Marcus Bateson 20 Apr, 2017
March 15th 2017
By Marcus Bateson 20 Apr, 2017
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By Alix Davis 14 Nov, 2016
Budget 2016 From April 2017 the government will make public sector bodies (PSBs) and agencies responsible for applying tax rules to contractor working in the public sector. This will result in IR35 being applied more frequently by the more risk adverse public service companies even in cases where tax law does not indicate employment status.

CookieCutter can provide a safe and compliant home for those who will be affected by this change.
By Alix Davis 14 Nov, 2016
In October, two Uber drivers won a tribunal claiming that in fact they are employees rather than contractors. This could lead to Uber being forced to fund costly benefits for drivers such as holiday pay, sick pay and pension contributions.

Fallout from this ruling is the increased awareness of employment rights by our clients. As a result contractors we need to ensure that not only do the terms demonstrate the IR35 position, but the actual reality of the relationship also reflects the IR35 position.
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