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IR35 review

lorlor Feels At HomeRegistered Posts: 68
Hi there,

Is there anyone on here, or do you know anyone that can carry out reviews on contracts?


  • mrme89v2mrme89v2 Registered Posts: 12
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,042
    From April 2017 contractors who work in the public sector (government departments, NHS, local authority, etc) won't need IR35 reviews as the public sector will determine the contract's IR35 status using an employment status service tool.

    However for the private sector and/or public sector contracts between now and March 2017 the big 3 players in IR35 are: Bauer and Cottrell, Qdos and Abbey Tax. Funny thing is, all 3 players will probably give you different opinions on the contract's IR35 status so might be worth chatting to each one first.
  • 98emrm98emrm Registered Posts: 10
    I don't deal with contractors because they bore me.

    My understanding is that it's the engager that is responsible. This is important for public sector bodies that engage via an agency as it would then be the agency's responsibility.

    On a personal level, I think agencies will push these types of contractors to operate via an umbrella. They'll receive less take home pay, and thus make public sector bodies have to pay a premium for contractors.
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,042
    As the rules stand, the engager is not responsible for determining the contract's IR35 status (the contractor/their personal service company is responsible).

    However from April 2017 all public sector engagers will be responsible for determining IR35 status and the agency will be responsible for tax deduction via PAYE if the contractor is caught by IR35. These new rules are likely to spread into the private sector from April 2018.

    There is some anecdotal evidence of contractors being forced via umbrella or direct onto the agency or public sector's PAYE scheme.

    The government has already said it will not increase the rates for public sector contractors just because they are no longer able to evade paying the correct tax due. However private sector rates are likely to go down post April 2017 due to the massive influx of contractors from the public sector trying to escape the new rules.
  • 98emrm98emrm Registered Posts: 10
    Sorry if I wasn't clear; second paragraph in my last post was talking April 17 >

    The government can certainly say it won't pay more, but it will. There is already a shortage of contractors in the public sector. I believe there are around 500 Brexit related projects now being undertaken, all requiring contractors. As we get deeper into Brexit there will be more projects, all requiring contractors.

    I have a contractor friend that has a very good day rate. But he contributes to a pension scheme that would return similar to a local government pension scheme when he retires. When taking this into consideration, his gross salary would be equivalent to around £45k. Which isn't fantastic for someone that can go months without work.

    If the government wish to tax contractors like employees, it ought to employee them.

    I look forward to reading the legislation...
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