After the perceived success of the introduction of the HMRCs Off-Payroll Worker Legislation into the Public Sector back in April of 2017; all the talk now is that the Chancellor will seek to level the playing field for contractors and announce in his upcoming budget that these measures will be rolled out across the Private Sector.
For those who are unaware of the Off-Payroll Worker Legislation, in a nutshell, this is a reworking of the IR35 legislation that changes the in/out decision to be the responsibility of the hirer rather than the contractor. Where a decision is made that an assignment is “IN SCOPE” the worker becomes subject to PAYE and NI deductions at source and Employers NI also becomes due on the payments made. To support this process the HMRC developed a tool called the Check Employment Status for Tax or CEST for short.
Prior to its introduction, there were of course many horror stories that the Public Sector would grind to a halt as projected 85% of contractors would walk out of their contracts should they be classified as “IN SCOPE” and take up assignments in the Private sector as they sought refuge from this unfair taxation. (http://www.contractoruk.com/news/0012901public_sector_ir35_exodus_85_pscs_quit.html)
It would appear that the reality has not been quite as catastrophic, though there have been isolated reports of mass resignations and portfolios, programmes and projects being re-aligned in the wake of its introduction. On the other hand, the Umbrella companies seem to have had an unexpected boon, as many contractors abandoned their PSC status and signed up for their services in order to keep their roles.
Like in any controversial implementation there are many voices sharing their views on the situation and it is not always easy to see clarity as many are heavily influenced by their own agendas. For example;
- HMRC is never going to say it was a disaster as they have seen their monthly tax take increase! Not only that they can see the possibility of that increasing!
- Organisations offering contractor advice are never going to say it is working as they are losing business as the decision point moves from contractor to engager!
- Cynically, it could be said that a failure to deliver programmes and projects due to lack of resource which is attributable to the new Legislation is an easy way out!
The one voice that seems to be missing is that from the coalface in the Project Management domain.
So, with the Public Sector IN and the Private Sector currently OUT, we have launched a short survey through which we aim to paint a picture of what is happening / anticipated to happen across the UK Project Management Domain.
We are looking for inputs from both PPM Practitioners and those responsible for hiring across both the Private and Public sectors.