I’m not sure if it is only HMRC that is exempt – I have had a similar experience with being approached for other public sector departments. In this instance it was the Ministry of Justice.
This is what was sent by the recruitment agent acting on the MOJ’s behalf, not directly from the MOJ:
Role: Technical Major Incident Manager
Contracting Authority: MOJ TECHNOLOGY TEAM
Contract Length: 6 months
Location: 10 SC Canary Wharf, travel to Petty France on occasion
IR35: Outside IR35
This was a BAU support role that has been classified as a project. They are using this falsely applied “project” status to offer the roles to Limited Company contractors as “outside of IR35”.
Friends of mine have been bankrupted due to being retrospectively taxed when the, admittedly dubious, “loans” structure that they were operating in had the law changed to classify it as tax evasion and all possible tax backdated seven years.
I stayed away from the dubious “loans” and I’ll stay away from any government department classifying BAU support roles as projects to side-step their own IR35 rules.
Current plan if IR35 gets bulldozed in is to find a permanent role (if they step up to cover the current gap in take-home pay) or, far more likely, just to emigrate to somewhere that the salaries will cover the cost of living more effectively, which London does not – I’m 40 years old with 20 years experience in some of the biggest blue chip companies Financial Services and Financial Services IT departments – marketable skills that I can take anywhere.
This is written in connection to the article ‘IR35 HMRC Exemption‘.
This is written by an anonymous contractor and represent the views of the author and therefor do not represent the views of the publicist.
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AFAIK the changes to IR35 in the public sector moved the liability for any tax arising from an incorrect assessment from the contractor to the client – so the arrangement described is perfect from a contractor’s point of view.
Remember IR35 applicability rules are the same as they always were and a public sector gig can still be genuinely outside.
Except when the public sector entity spits the dummy and places the problem on the little guy like retrospective taxing as mentioned above.
You Can’t blame HMRC for wanting to close the ‘loan’ scandal loophole. Even with IR35 you have to be cognisant of what the affect could be if you lost an inquiry case. Now that there is 7.5% dividend tax the in/out gap is closing.
You can blame them for the nonsense they’ve peddled on the loan case, including the retrospection element and failure to act earlier.
On IR35, they’re in the habit of comparing apples to oranges. Contractors charge a premium relative to permies and have fee revenue and not salaries. Hector misleadingly tries to argue in terms of taxes due on a salary equal to those revenues, when in reality the equivalent permie salary would be lower.
The liability, if any – keep in mind they lose most cases – is the client’s. But that’s only where they can prove ir35 applies – even with their skewed figures they concede it doesn’t in 2/3 of cases. But the CEST is a rubbish tool which omits key tests courts consider, hence it has been at odds with court judgements. They also have stacked the incentives on such a basis that clients blanket assess inside rather than undertaking a proper assessment. So there’s plenty of blame to be had here, and that is assuming their arguments are correct – they’re not.
I’d recommend this resource and others on the website to get a fuller picture of the matter.
MoJ is a public sector client. The rules are already IN PLACE mate, and it’s quite clear, the intermediary is on the hook. Specifically it’s the intermediary who has the end client relationship.
There are proper and legal ways to close ‘loopholes’, but how do they even exist in the first place? Admittedly they have been mis-used, but using a hammer to smash a fly is not the answer. It opens the door to all kinds of retrotaxes.
Project work with a pre determined end date is outside IR35, no technical interview, no statuary times to work and definitely no BAU work. Happy days.
IR35 is not a problem IF its applied democratically against all industries as it not, its fundamentally illegal. This is the next PPI scandal just waiting to happen – keep all your paperwork.
Same goes with 200% council tax for emtpy properties.
Indeed – the 3 key status tests are what matter, and also being in business on your own account. Just because something would typically be ‘BAU’ work means little if any of the criteria are met – and being tied to a project is a good indication of these being satisfied. Hector has lost court case after court case by ignoring the key tests and arguing rubbish like ‘it’s a BAU role’.
The intermediary shoulders the IR35 risk. Why on earth are you so worried? Try to understand the legislation before posting scaremongering things like this.