The Contingent Labour One contract causes an IR35 headache for contractors.
Kate Hardy from status experts Qdos provides an update on the implementation of a new framework agreement in the public sector, and how it affects limited company contractors.
As if things were not difficult enough for contractors working within the Public Sector, many have been approached with a view to signing a new Contingent Labour One contract (CN1). Having personally reviewed this it would do very little to put a contractor’s IR35 status on the right footing; rather the opposite!
The Contingent Labour One contract is intended to be used for all public sector organisations and will be administered solely by Capita. Whilst other agencies will still be able to recruit for public sector contract work, their contract would be with Capita rather than the government body themselves.
Many contractors have been up in arms regarding the new agreement due to its IR35-related shortcomings. However, all does not seem to be lost as Capita have been taking comments on board from contractors and negotiations appear to be taking place with regard to what can be done.
Whilst this contract alone is not good from an IR35 perspective, if your actual working practices are very strong and do not reflect the contract then there would probably be grounds to mount a successful defence in the event of an IR35 enquiry – obtaining confirmation of your working practices (via a confirmation of arrangements letter) could prove very useful in this respect.
Despite the above, a degree of sympathy has been felt by the House of Lords in their recent report and one of their recommendations was that there should be more consistency in the application of the public sector guidelines and that adoption of the guidance set out of the policy procurement note must be monitored more closely.
What is going to happen next remains to be seen, but for any contractor wanting advice Qdos are happy to assist. For any queries please do not hesitate the Qdos consultancy department directly on 0116 2690992.
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