Now that the dust has settled

Like many in my field, the legislative changes that came into play on 6th of April left me in a relative state of angst. As someone who had always specialised in the placement of IT professionals on a contract basis, it became clear that public sector clients were going to find it tougher than ever to compete with the offerings of their private sector counter parts.

From what I have observed to date it seems that the majority of public sector organisations are opting for a blanket approach, deeming large numbers of resources as ‘inside’ regardless of their individual assignments. One presumes this is because the procurement departments making this decision don’t quite understand the implications to front line services that departures ‘en masse’ of their IT functions may have. Or alas, that legal protection takes president in organisations that are notorious for being risk averse by nature.  

In any case, the legislation is here to stay. Now the initial storm has passed I thought it timely to offer those considering roles in the public sector some advice. After all, if recent parliamentary musings are anything to go by these measures are likely to encroach the private sector in the coming years- so it is probably about time we get some practice in:

Applicability

Check if an organisation for which you are being approached about/are interested in applying to has the potential to fall within IR35. Obvious examples are Local Government Departments and the NHS but Universities, Parish Councils, the Police and many Museums & Charities are also within the remit. The small print on the bottom of advertisements is often a good place to look for this.

Clarity

If approached by an agency, you are well within your rights to ask for clarification in as to whether the role is inside or outside. Any recruitment business worth its weight will be addressing this with their client whom have a legal obligation to provide such information in a 31-day period. At offer stage I would advise asking for a copy of this in writing, for your business records.

Assignment Schedule

If you secure a contract with a public-sector client that is deemed to be outside of the updated legislation, make sure your contract reflects this. Some sort of statement of work/ schedule should suffice with an outline given by the end client. This should stipulate outcomes you will be expected to deliver against.

Running the tool

Be sure to run yourself through the below- this isn’t a binding indicator- but it can help you think about best business practices to adopt in your favour.

https://www.tax.service.gov.uk/check-employment-status-for-tax/setup

Insurance

IR35 investigations can be lengthy and cumbersome. Getting insurance costs roughly £100 a year and is well worth the investment, if only for peace of mind.

Terminology

Make sure you are referring to yourself as ‘company x’ in all communication with the organisation for which you are providing services. Remember to approach all emails to internal staff and the like by their job title; they are not your line manager and you must not treat them as such. Ensure that you are not asking for days off but rather informing that ‘company x’ will not be providing services on any given day. This evidence will be crucial for auditing if you are ever investigated by HMRC.

Contracting inside IR35

There are an abundance of Umbrella companies out there trying to capitalise on the changes and offering 85% or even 90% take home pay offset by loan schemes. These Umbrella reps are sales people and you must treat their advice as such. For those of you considering roles within IR35 and the variety of options available to you, be sure to seek advice from a qualified accountant.

From my perspective, securing a public-sector contract with relevant assurance from the client affirming that the assignment is outside of IR35 is safer than private sector work. After all, in the latter instance the onus is on you to determine as to whether you are inside or outside, making it much easier for HMRC to pick holes in your justifications retrospectively.