Public Sector IR35 Test
Private sector contractors can learn from contractors in the public sector and what they experienced when the IR35 reforms went in there. This is an article from 2017. It’s a word of caution to those who decided to sit the Check Employment Status for Tax test and passed it.
Contractors in the public sector should prepare more for the new public sector IR35 Test.
This week, one Government department gathered up 5 contractors to do the test together.
They do similar jobs so the reasoning was that they would all either be inside or outside IR35.
The contractors’ manager was there and the Human Resources lady was there too.
For each of the questions they went for a majority vote.
Contractors Sat IR35 Test Together
On some of the questions, they convinced the manager that they should answer one way only for the HR woman to tell the manager that this was not the case and to reverse his decision.
Once HR have involvement in this sort of decision you know you are in trouble.
They are completely risk averse.
So, you know now what the results of their IR35 Employment Status Test before I even tell you.
Yes, it found that they were all inside IR35.
Pay IR35 Tax or Join Umbrella Company
Now, they must either pay the IR35 tax or join an umbrella company.
All of them are currently using limited companies.
They now face the problem that while the public sector IR35 Test shows that they are inside IR35, they are currently operating via personal service companies.
They have been at the department some time. So, this means that they have been operating ‘illegally’ at the department.
Telling HMRC Results of Public Sector IR35 Test
It seems that when a department takes the IR35 test, the results must be sent to HMRC.
That could cause a problem in itself.
These constants changes, these constant attacks on contractors, are making the job much harder. It’s certainly making the job much less lucrative.
Yet, now there is the prospect that the Government will make private sector contractors take the IR35 Test in the future.
Contractors Not Ready for Public Sector IR35 Test
One problem the contractors above had was that they were not ready for the IR35 test.
They hadn’t previously sat the test themselves. The request to sit the test came out of the blue.
They didn’t have the preparation of having sat the test before and had a chance to think about it to make their case.
So, contractors should prepare beforehand and click on HMRC IR35 Employment Status Test to find out more about it and to sit the test.
It’s crucial you do it before they come for you. Let your fellow contractors know about it too.
They might get tested together with you.
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