IR35 Public Sector from April 2017

IR35 Public Sector.

Following the article on the Interimconnect site what are your comments on how IR35 for interim managers operating in the Public sector, though a Personal Service Company (PSC) should address the new IR35 regulations due to come into force in April 2017?

If the Public Sector organisation you are engaged for determines you are within scope of IR35 you will be very likely to worse off in terms of net income.

These are some of my thoughts:

A) Just accept that you will now have PAYE and NIC deducted at source from your fees. I.e. you are grateful for an assignment.

B) Negotiate a higher daily rate to compensate for the loss of income.

C) If your skills are transferable move to the Private Sector.

D) Consider operating through an umbrella company which may have some advantages.

E) Consult your tax accountant

Any thoughts on this can be shared through this blog. Just use the ” leave a reply” below after this article.

Thanks Mike

IR35 Public sector interim managers

Budget 2016 and interim managers

The Chancellor in his March 2016 Budget has moved to tighten the net on interims mistakenly regarding it as disguised employment, rather than the highly flexible management resource that it is.

The main changes are:

Working in the Public Sector 

From April 2017, the government will make public sector bodies and agencies responsible for operating the tax rules that apply to contractors working through limited companies in the public sector. In practice this means that the public sector bodies and agencies will take the safe route and deduct employees NIC and PAYE from fees billed. The rules will remain unchanged, at present, for those working in the private sector. It is not at all clear at present if all interim managers will be caught by this but the consensus seems to be that they will be.

Travel and subsistence

Tax relief will no longer be available for home to work journeys, the take home pay of the workers employed by intermediaries will reduce. The intermediary will also be impacted as it would have made savings in relation to employer’s NIC on the travel expenses paid. The proposals will also impact those personal service companies which supply the services of an individual to an end user if the individual is subject to supervision, direction or control.

Dividend Tax

Although independents including interim managers have already paid Corporation tax on their profits in addition from 2016/17, individuals will have a dividend allowance of £5,000 per year, but suffer higher rates of tax on dividends that don’t fall within this allowance.

The new rates of tax on dividend income above the allowance will be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.

It is a pity that the Government has made additional legislation which can only add further complexity.

Mike Measures

March 2016

Interim management

Win more interim interviews

Tip of the week for more interim interviews!

One of the main attributes of career interim managers is their ability to parachute into organisations and to add value from the start. To do this they need not only to be flexible on what organisations they work for and the challenges they take on but also terms and location.

An early indication of flexibility can be when you apply for an assignment. Avoid saying, for example, “ I only want assignments in London”  or my fee rate  is “£XXX per day (full stop)” with no indication of flexibility. It could be interpreted as just that . Show flexibility at the outset and obtain more interviews!

Some may argue it is better to layout at the outset what you are prepared to take on thereby saving your time and others.

Have your say by using the reply feature below.

Thanks Mike

Professional Indemnity Insurance for Interim Managers

 

Interim management

Mike

By definition, Interim Management often means taking on challenging assignments.

In case events take a turn for the worse, Professional Indemnity Insurance (PII) is there to protect you. It also indicates to hirers of interims that you take interim management seriously and are prepared to back that with professional insurance .

Due to the low incidence of PII claims against interim managers it is difficult to assess how Insurers respond to and defend claims against interims.

To understand where interims in the network find their  PI Insurance cover we asked members in February 2014 to let us know the following:

“ 1) Name of their PI Insurer

  2) If possible their website address and/or contact details

  3) Why you would recommend them.”

The summary findings are on this link. It is a useful document the next time you are looking to renew your cover.

I will keep updating the summary findings so as a network member you have a really useful document the next time you renew your Professional Indemnity Cover.

To respond please use the contact form on the summary findings link  with your answers to questions 1) – 3) and any other comments you have.

Finally – Top Tip!

Make sure that your PII policy covers not only your limited company but also yourself as an individual. This will not cost any more in terms of a premium but will cover you if an action is taken against you personally as well as your limited company. 

Interim Management Survey 2014 – Result

        
Interim management

Mike

In December 2013 we opened the annual Interimconnect survey on where interim managers are likely to find their assignments in 2014. 

The 2013 survey  indicated that 64% found the majority of their assignments through networking and contacts. This year we added additional questions on the effectiveness of linkedin in finding assignments.

Interim management continues to be dominated by contacts and networking. However many interim managers overlook the fact that networking is first and foremost about what you can do for others. Being a positive and pro-active contact will eventually lead to opportunities but networking is not a quick fix. Many contacts evolve and blossom over years. Others fall by the wayside.

To see the interim management survey results for 2013 follow THIS LINKand look for the pdf at the bottom of the page. 

 If you were unable to contribute to the survey or wish to add your own observations on advice please do so my using the reply feature, in this blog, below.

All contributions from career or aspiring interim managers are welcome. 

Many thanks 

Best regards Mike 

 

Interim manager survey

Mike Measures Interimconnect

Mike

This month we have opened the annual Interimconnect survey for where interim managers will find their assignments in 2014. 

We have introduced some additional questions to “drill into” how effective linkedin is in securing assignments. 

Our survey last year indicated that 64% found the majority of their assignments through networking and contacts. This is a pretty consistent trend for our network

To participate in the survey and hear what works/doesn’t work for other career interims please follow THIS LINK

Best regards Mike 

 

Main reasons interim managers are appointed?

Mike Measures InterimconnectThe main reasons why Interims are appointed and used extensively in both the public and private sectors are:

  • Improvements and change,
  • Lead projects and
  • Cover senior management gaps caused by sudden departure, long-term sickness or maternity leave.
  • Need to bring in additional management skills and experience

Interim management began in the UK in the mid-1990s. It was seen then as a resource to cover gaps, but many companies had positive experiences and found interims to be the main drivers of change.

Those organisations found that by bringing in an experienced professional as part of the management team and focusing on the deliverables of the assignment, improvements could be made.

Interim managers focus on the job in hand and do not get distracted by office politics. As they do not have a permanent position in the organisation, they can surface and resolve difficult issues that a permanent member of the team might well avoid.

Another driver for the appointment of interims is uncertainity in the future which means that a permament appointment may not be appropriate. A good example of this is where a possible merger, acquistion, sale or disposal of a business is possible. Bringing in an experienced interim can manage the process but also through their experience deal with the unexpected.

Mike Measures