Welcome to this Webinar on our 35 in the private sector from April 2020.

My name is Andy Chamber and under depth Director of policy at its say And I'm joined by my colleague inner today.

I'm Nina.

I'm senior researcher here Gypsy, and I'll be speaking about our research on the topic a bit later on today.

Great.

So many of you have already said that you can see the slice and you can hear us, which is wonderfully reassuring France very much for that.

So it looks like everything's working Fine.

Technology hasn't let us down.

I hope so.

We'll crack on.

We're gonna try and get all this done in an hour.

But if we have to go over that, that's that's no problem for me.

But I've promised it will do it an hour, so I'll try not to get out of schedule.

So what will this Webinar cover?

Well, we're gonna obviously look at the changes in the private sector which are due to come in in April this year.

It is gonna talk through some of its AIDS research.

Recent research that we did into this, that we had an excellent response from from our members on how they're like is react.

We're gonna look at how the market is reacting.

Many of you will be aware that there's been some quite extreme market reactions to the proposals on, and we're gonna touch on the government's review off the legislation, which just reported back last week.

And we're gonna talk a little bit about it's that.

What if they've been doing in lobbying?

Because we are, of course, completely dismayed by this legislative change which is coming in, and we are still pushing to get this changed that we have not given up.

We are still pushing for the government to change its mind on.

I'll talk a little bit about that as well.

But what we're not gonna cover here today is the whole ritual around.

How I after the five status, is determined.

Very happy to do another weapon are on that people would find it useful and just let us know.

But in the vial, the chat box that you could see in front of you here or email into it, say I will put on a webinar about, but it's just that it's a bit of a rabbit.

Oh, it's a complex area.

We could do a whole another our webinar just on that.

So we're just gonna really look up.

You know, the practical things.

What's changing in April?

What are the new tweets?

The legislation?

What the contractors need to be aware off on dhe, What's going on in the world around us.

In response to this?

That's the purpose of this weapon off.

So this really all starts in 2017 when the government, in its wisdom, decided to change the way that I are 35 words in the public sector.

Um, there were two big changes.

Versatile.

They said that the liability for determining I are 35 status is going to shift to the public hiring organizations, the public authorities that are ultimately hiring the contractor to do the work.

And the second thing that they said that they would do is that where are 35 applies the feed payer, and we'll go into that the next died.

Who the fever is mustard duck.

Did that tax on N.

I asked force this was new because up until then I are 35 work retrospectively.

Essentially, you get to the end of the tax here on what was supposed to happen is that contract would voluntarily say, Well, actually, I think our 35 applied to that engagement.

So then you did something for the team calculation.

You paid your test, but you still paid it after the fact that after the tax year ended.

Now what they're saying is, once it's been decided, right, you're lonely.

There are 35 applies then on you've got to you've got to the duck attacks at Source.

This was also where we started to hear the phrase the off payroll working rules.

Are we off payroll working legislation, which is now what the government seems once call it.

But it's still basically I are 35.

The underlying rules around there are 35 the things which determine whether it should apply or not.

I haven't changed the case law that we're not gonna talk about today.

We're going to try not to talk about it, and that hasn't changed.

I am look at the steps to a little bit later on, by the way, where we do get slightly into that stuff, but we're not going to go too far into that now.

Also, I should have said in the beginning, please feel free to ask questions using the text box.

We've got a good number of people attending this.

I can see that we're almost up to 400.

So I expect there'll be a lot of questions.

We're gonna do our best to kind of plate those questions and answer them during this webinar on We may either I might interrupt myself to ask questions or inner might interrupt me, Thio say, Look, you had a lot of questions, don't you think?

Or we'll just leave sometime at the end so that we can cover them up.

Okay, the feet pair, I I said that we talk about what?

So who is this feat payer?

Well, basically, it's usually an agency.

It's whoever is in the chain above the contractor.

That's who the fetus is.

Whoever is paying the limited company contract, er they are the feet payer.

Now, sometimes agencies.

If it's deemed that Arthur your place now they are the feet pen.

They have this responsibility to duck the tax at source on.

They might not have the software systems to do that.

They might not want to do it, so they often might bring in a payroll or an umbrella company.

Then they become the feet because they insert themselves in the contractual chain above the limited number contractor and believe the agency.

It's unclear whether the government, the sword, that lots of umbrella companies would be used as a result off this legislation because on Brother Cos.

Currently unregulated, and I'm not gonna go into this too much.

But we do touch no bit later that there is a concern that we have that some umbrella cos a noncompliant.

They're offering and discouraged enumeration packages which I think contracted should be aware or because we've seen the mess that we've got into over the lone charge on, so I wouldn't want that to happen again.

We, by the way, have sent to the government you're mad.

You're pushing everyone into these umbrella couples, some of which have perfect compliant.

But some of which arm and that's the elites in greater use of these disguise remuneration skis.

You should regulate those first and then think about doing this.

But in their wisdom, they have decided not to do that.

Okay, so let's have a quick thinking in this new world of our 35 that on goes public sex changes that I talked about.

Broadly speaking, we're gonna be brought into the private sector in April unless it's A and others are able to convince the government not to do it.

Um, Then what does this really mean?

Well, there's this thing called a small company exemption.

I'm gonna talk about that a bit more.

But essentially, this only applies to where the end client is even medium or large in size.

If they are medium or large in size and they will have the responsibility to make the eye are 35 determination, it's up to them to think Well, you know, it doesn't.

I think five apply.

All know if the incline is small, then the personal service company, or PSD.

I know that many contractors don't like that term.

I don't think you like it either, because it doesn't mean anything legally, but we sought to know what we mean.

We're talking about the limited company contractor there.

You retain the responsibility for I R 35.

If the Enquirer is small, it is the fee payer.

If the kind of medium or large that has a response to the tax liability.

They are the ones that have to make sure the taxes deducted if the client is decided.

That I are 35 applies, however, at an extra confusion into this already incredibly confusing world of I R 35.

If it's service's are what's called contracted out, then it is the service provider that has a responsibility to make the status determinations on a little chart here.

The next light.

Which kind of demonstrates this, I think, quite well.

Eso in the left hand column.

You've got a situation where the client is small.

It's a simple chain.

A contractor is working directly for a pliant.

There's no agency involved now if there is a yellow box around the end cemetery, and that means that they have to make the Earth certified decision.

And if there is a red box, that means that they have the liability to payal the taxes that go along with an I R 35 court decision on those faxes basically unemployed their employment taxes.

That's what we're talking about.

If I say five applies now or from April, then contractors will be paying employment taxes.

We're gonna talk about the problems that I see with that issue as well.

So in in the left hand column, you can see that it is the personal service company that has the responsibility for those two things, just as they have always done.

They have always had the responsibility for the I.

R.

35 in the private sector.

They still do have the responsibility.

And if you're inclined, this one, you will still have the responsibility.

So that's one thing that the next, as we go into the next time, we're going to see what happens when the client is medium or large.

Show the next one along.

Simple supply chain, no agency.

The incline both has the status decision responsibility on, and they've got the responsibility to do that.

That's because they are the feet.

They are paying the contractor the next mile long.

You see, you've got an agency involved.

The end client still has to make the Arcee five decision, but it is the agency that has to deduct the tax.

They are the feet.

You get that you get the message in the next one.

You got two agencies in a chain.

But it is the one immediately above the personal service company that has the has thio deduct the taxes and in the final slide that what you can see there is this thing about contracted out.

Service is on There, you will see is the service provider which has to make me I, Arthur a fire decision.

Ah, I'm gonna talk about that now.

So what is it, contracted out service?

Well, actually, the more I looked into this, the more I realized that this is probably just about it's difficult to work out a czar 35 status is.

And I think there's gonna be lots of confusion around this issue on probably some court cases as well.

But the way it should work is like this.

If a company buys in a fully contracted out service, it doesn't have the r 35 responsibility for anyone working for that contracted out service.

However, if a company buys in labor to do some work for it, then it does happen.

And that's what I mean.

Working without Wednesday, it contracted out service.

And when is it buying in labor?

Well, I think we could probably have a lengthy court battle over just just that.

A straightforward example is a bank that wants to have a canteen to feed its star.

So it goes to a catering company, and it says, Catering company, Can you come in?

And, man this cantina make sure is what food available?

Uh, that's a fully contracted out service is a pretty straightforward one, because the bank Lee doesn't only about catering.

And if that catering firm comes in, and if it happens to be using people, personal service companies work who are working for it, then it is the catering company that has to think about the R 35 status of those arrangements.

Unless, of course, the catering company is a small company, in which case it goes right back there onto the PS seas again and what we're hearing.

We've heard from a lot of consultant sees who were saying, Well, we think that we're trapped and they may well be, but I don't think it's very clear.

And if you've got a small consultancy which then has contractors working for it then because of the small client or small company exemption, then it is.

The PS sees that retain the art that if I have responsibility that you can see I've got put it point they're saying potential for confusion.

I hope that already all confused.

But this is one of the sticking points off this new legislation.

We've asked the government to provide lots of lots of examples