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Contractor vs Government Dept – IR35 Case

June 1, 2018 | By | No Comments

Good afternoon,

I hope everyone had a good bank holiday last weekend. Even though we had some storms here in South Wales, all of us in the office still made the most of the extra day off.

For this week’s blog, we will be looking at the battle between a contractor and the HMRC over IR35, and how the contractor won the case against the HMRC for the contract to be declared outside of IR35 and raising questions of the Government’s understanding of IR35.

The contractor was providing Business Analyst services through a personal service company to the Department of Work and Pensions, where the contract was declared inside IR35. Although the contractor disagreed with this and took it further. After the hearing took place, the judge decided that the contract belonged outside IR35 as there was insufficient right of control over the working methods. The judge also disagreed with HMRC’s interpretation of mutuality of obligation (MOO) and the right of substitution.

The CEO of the company that represented the contractor at the hearing stated:  “Despite HMRC implementing and enforcing the rules, this verdict shows they can’t accurately assess a contractor’s IR35 status. The Government is serious about clamping down on what they believe to be non-compliance, but worryingly, can’t recognise whether a contractor belongs inside or outside IR35. That the individual was working on a Government project simply adds to the irony. This case is further proof that IR35 needs simplifying, and HMRC must rethink its IR35 strategy completely. Clearly, this is no time to extend public sector changes to the private sector”.

A large number of contractors are dismissing contracts due to them being inside IR35. If the government is mis-assessing the IR35 status of contracts and being incorrectly declared, not only are contractors missing out on opportunities, but the individual departments within the government departments are also missing out on good candidates.

If the judge has decided on this occasion that the contract should be outside IR35, how many other contractors are out there in the same position where their contracts have been declared inside IR35 but should rightfully be outside IR35. What is your opinion on this? If someone thinks their contract has been declared inside IR35 incorrectly, do you think it should be challenged? Let us know in the comments below.

I hope everyone has a great weekend.

Warm Regards,

Sheree

 

Source: https://www.journalism.co.uk/press-releases/ir35-freelancer-working-on-government-project-wins-hmrc-tax-battle/s66/a721977/

 

Government upping efforts to get rid of unpaid Internships

February 16, 2018 | By | No Comments

Good afternoon,

I hope everyone has had a good week. Everyone in the office has been busy in the evenings this week, with Pancake Day on Tuesday and Valentines Day on Wednesday. Did you make any pancakes? Or maybe you went out for a meal on Wednesday? Let us know what you did in the comments.

Onto the blog for this week, we will be looking at how the government has upped their efforts to get rid of unpaid internships. Last month it was estimated that 40% of 70,000 internships undertaken were unpaid. According to the law, any interns that are classed as workers must be paid at least the National Minimum Wage or the National Living Wage. A worker would be “someone who has a contract or is subject to sanctions if they do not turn up for work” (not including genuine volunteers). No prosecutions have been made in relation to interns and the minimum wage yet, as employment law is not being enforced properly, but with the government stepping up, this could change.

Over the last few months, the government has been stepping up to sort the issue with HM Revenue and Customs writing to more than 500 firms reminding them that any interns classed as workers must be paid minimum wage. The government stated that they are working to remove exploitive unpaid internships as they should not exist. The government also stated: “We will take action to improve the interpretation of the law and the enforcement action taken by HMRC in this area to help stamp out illegal unpaid internships”. If the current approach does not work, the government will be “reviewing the existing policy and legal framework and will consider what other action can be taken”.

With unpaid internships, some candidates are at a disadvantage, as an internship may be the only path to take to get into the industry they want to work in, in the future. Individuals can potentially miss out on these opportunities as they cannot afford to take on a position unpaid. It is said that young workers need at least £1,019 per month when living in London and £827 when living in Manchester. This may leave some candidates at a disadvantage if they have no other financial support.

With the government starting to step up to resolve this issue, hopefully in the near future we will see an improvement on internships and hope to see the number of unpaid internships drop and eventually disappear. What is your opinion on unpaid internships? Do you think internships should be paid or unpaid? Let us know your opinion in the comments below.

Have a great weekend!

Warm Regards,

Sheree

 

Sources:

http://www.bbc.co.uk/news/business-42997400

http://www.bbc.co.uk/news/uk-42863951

Public Sector Pay Cap to be lifted

September 15, 2017 | By | No Comments

Good afternoon,

I hope you have had a good week and that this horrible weather doesn’t hang around too much longer. There was excitement this week as the new iPhone specs were released. What do you think of the new iPhone X? Do you think it is worth the money? Moving onto the blog, this week we are going to be looking at the Public Sector Pay Cap update that has been in the news recently.

Back in 2010, Public Sector pay was frozen for two years and since 2013 pay rises have been capped at 1%. In the news earlier this week we have seen that the cap on public sector pay rises in England and Wales will be lifted. Police and Prison Officers are the first to see a pay rise, the Police will receive a 1% pay rise along with a 1% bonus and Prison Officers are being given a 1.7% rise. The rises that have been offered are still below the rate of inflation which has risen to 2.9%.

On Wednesday this week Firefighters were offered a 2% pay rise, but declined as the Fire Brigades Union stated that “the offer included a whole host of strings and failed to clearly address the pain our members have experienced as a result of years of falling real wages”. Also on Wednesday the DUP showed their support for Labour’s motions for the pay cap being removed for NHS workers and it passed without having to go to a vote. The next day, unions that represent NHS workers wrote to the chancellor to demand a 3.9% pay rise along with an additional £800 to make up for previous years.

Currently there hasn’t been any updates on whether the NHS workers will be awarded the 3.9% pay rise, but it will cost a total of £2.5 billion if the pay rise is implemented and that is without bringing into consideration any other public sector pay rises. What are your thoughts on the situation? Are the pay rises enough/too much? Let us know in the comments below.

I hope you have a great weekend.

Warm regards,

Sheree

 

Sources: http://www.bbc.co.uk/news/health-41274088

http://news.sky.com/story/labour-motion-on-nhs-pay-rise-passes-without-opposition-11033935

http://www.independent.co.uk/news/uk/politics/conservatives-suffer-defeat-on-labour-motion-calling-for-higher-pay-for-nhs-staff-a7945241.html