Tag Archive | "public sector contractors"

Do You Pass The IR35 Public Sector Test? Most Do…

A well known and respected tax advisory company have recently done some research, and what they found will surprise many, especially in the public sector.

It was the public sector where this research was carried out you see, and the subject on the top of the list was the dreaded “IR35 reforms,” which thousands of contractors around the country have been complaining about of course.

Do the majority of public sector workers even have to take part in this whole IR35 thing, anyway? According to the new research…maybe not.

What they found is that 89% of the people surveyed passed their unique IR35 public sector test, which was a detailed status assessment that really put contractors through their paces.

The end result of all of this was that most contractors “sit outside of IR35,” which means they won’t have to bow down to the recent changes which came into effect on April 6th and have been the subject of much controversy

At this point I would just like to point out that all of this research has been carried out independently by a third party company and has nothing to do with the government at all.

In other words, if you are a public sector workers then don’t expect to turn up at work tomorrow and be told by your boss to forget about IR35.

This is a view shared by the tax advisory company who did the research, as although they were very sure of their findings regarding IR35 and public sector workers, they did go on to admit that every case needed to be reviewed individually by a government official.

They also went on to add that most of the public sector contractors surveyed worked in the IT industry, which does appear to have a higher pass rate than other industries.

No matter what industry you work in…the word on the street is that freelancers and contractors everywhere feel completely unsupported by the government.

In a shocking survey conducted only a few months ago, it emerged that a staggering 97% of self employed workers have no belief in the current regime at Number 10.

That is definitely a lot of people, and it makes you wonder how the Tories even got re-elected in the general election. They did of course, but only just.

The IR35 changes have obviously played a major factor in the distrust between hard working contractors and the government, but also the ridiculous tax grab and other issues that have become apparent.

If you are a public sector contractor then you might want to contact a specialist tax firm who can advise you on the best way forward regarding IR35.

However, you could also join the thousands of public sector workers who are leaving and moving into the private sector, where many say the opportunities are in abundance and the money is a lot better. The choice is yours.

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Contractor Plans Legal Fight Against IR35 Reforms

An IT contractor has taken the bold step of planning to take on the government and their IR35 reforms in a legal battle.

As you can no doubt imagine, this type of thing isn’t going to be cheap and that is why he is looking for donations to make it all happen. The cost of full legal action is expected to be around £360,000. Not exactly small change is it.

I’ve reported before about these IR35 changes of course, which came into force during April for contractors within the public sector and has mostly been unpopular.

In fact, some IT divisions within the public sector have seen thousands of contractors walk out once their contract was up, with many more planning to do the same once they get the chance.

Would a U-turn by the government on IR35 change contractors minds? It very well could, but I think many are probably doing just fine out there away from the public sector, maybe even making more money.

As I’ve spoke about in another blog post, contractors and their skills are more in demand than ever before, with many companies willing to pay top cash for those who want to put in the hours.

I’m sure there would be some who might consider a return to the public sector though, because the work is quite steady and predictable, which gives a bit of reliable income.

This legal challenge has got to make it into a court of law, and with over quarter of a million pounds needing to be raised it does make me wonder if we are going to see anything happen? Let’s wait to find out.

You don’t need to send any donations just yet, as the IT contractor has mentioned that any potential supporters should email and say how much they could donate on a monthly basis. £20 a month has been talked about.

The one thing I do know is that the government very often do change their mind. Just take the “making tax digital” plans as an example, where for months it seemed to be at the top of their to do list.

It now appears the plans for making tax digital has been scrapped, after a lot of hard work and millions of pounds spent, so it wouldn’t surprise me at all if one day some government official decided that IR35 should also be scrapped.

What can you do though? Most contractors will simply get on with their life and make the best of anything that comes their way. If the public sector is no longer viable then they look elsewhere, and if the public sector starts to seem more attractive again then I’m sure many will be back.

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The New PM Should Back Umbrella Contractors

Now that many people have come to terms with Brexit and the implications it will have for the British economy, it’s time to realize that umbrella contractors are the foundation of this country and should be treated as a priority by new Prime Minister Theresa May.

This is the opinion of IPSE, the UK contractor trade group, who recently stated that it should be the “first priority” of Mrs May to back the self employed when she is drawing up new plans on how to deal with Brexit.

My opinion on this matter? The IPSE are absolutely spot on with their thinking, and if this country is going to stand any chance of flourishing over the next few years then more needs to be done to make sure that contractors are given as many benefits as possible and are not hindered with stupid rules like in the past.

At the end of the day, it’s all about flexibility in a post Brexit world for umbrella contractors. Once doing business with other countries becomes more difficult, especially for the self employed, then it’s essential the Prime Minister works on securing global trade agreements and easier access to the global market, while at the same time ensuring that all the millions of self employed people in the UK are not constantly bothered with silly regulations.

Even when the UK was very much a part of Europe I think that David Cameron and his government always wanted to help contractors as much as possible, but this didn’t always happen unfortunately.

For example, one measure that comes to mind is how public sector contractors have been taxed excessively when compared to other industries. It just isn’t right, and this is something Mrs May will have to put right at the top of her list to sort out…or face the stern words of thousands of people who are banking on her to do the right thing.

The IPSE, which stands for the Association of Independent Professionals and the Self-Employed, went on to say that it realizes the Prime Minister has a lot of new challenges in front of her post Brexit, but through backing umbrella contractors she will put herself in a favourable position and quickly become a leader that many people warm to.

Let’s face it, being in the top position is not easy as you can’t always please everybody, but isn’t it about time the average man and woman who are the engine room of the British economy are rewarded for once? I think there is a definite yes on this one, and not many people will disagree with me.

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REC calls for public sector to be handled with care

The REC is urging the new coalition government not to make any drastic cuts from the public sector budget.

The government plans to reduce public sector spending by £6 billion but the REC thinks knee-jerk cuts will damage the interim jobs market at a time when it still trying to recover from the credit crunch.

Tom Hadley from the REC reiterated the Confederation’s stance that contractors and freelancers play a crucial role in the public sector.

The REC has an ongoing Public Sector Resourcing campaign which highlights the importance of flexibility in securing the economic recovery. They believe that the public sector needs sustainable reform rather than mass staffing cuts.

The campaign also points out that new skills and competencies should be introduced into public sector organisations in order to manage the reforms.

However Mervyn King, the Governor of the Bank of England, supports the decision to cut £6 billion from public spending. It is unusual for King to publicly endorse fiscal policy but in this instance he overcame his reluctance.

He said that the introduction of an early round of spending cuts would show the government was taking steps to get to grips with the problem as soon as possible. The UK has serious financial problems that will take a full parliament to sort out and by taking measures straight away, the coalition is demonstrating that they are serious in their commitment to solve the deficit problem.

Inflation reached 3.4% in March, well over the targeted 2%. This was blamed on the increase in oil prices, VAT returning to 17.5% and the weak pound. However, the governor expects inflation to drop again as fiscal policy is tightened.

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Image: Autumn Yellows in the Hoh Rain Forest by jessi.bryan

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