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jamesbrown
6th November 2015, 22:43
Crackdown on personal service companies could raise £400m in tax | Politics | The Guardian (http://www.theguardian.com/politics/2015/nov/06/crackdown-on-personal-service-companies-could-raise-400m-in-tax)

"Amid fears that business will complain of fresh regulations, the government is proposing that a consultant using a personal service company would be obliged to move on to the payroll if they work for a business for more than a month. Businesses, rather than the individual, would be responsible for overseeing the rules. An agency would be responsible if they provide consultants to businesses."

"A government source said: “This is about fairness in the tax system. It is just not fair to have people in the same company doing the same jobs paying different levels of tax."

tarbera
6th November 2015, 22:46
Could be worse, we could be forced to sit on spikes

vetran
6th November 2015, 23:02
"Amid fears that business will complain of fresh regulations, the government is proposing that a consultant using a personal service company would be obliged to move on to the payroll if they work for a business for more than a month. Businesses, rather than the individual, would be responsible for overseeing the rules. An agency would be responsible if they provide consultants to businesses."

"A government source said: “This is about fairness in the tax system. It is just not fair to have people in the same company doing the same jobs paying different levels of tax."

Aim, see toes fire!


They really don't understand do they??

jamesbrown
6th November 2015, 23:02
Could be worse, we could be forced to sit on spikes

Yeah :laugh The article itself is a jumbled mess, but it's clearly pointing to a fundamental change, far beyond the T&S proposal. Gideon in "listening mode" at the CBI next week. Yeah, right.

Zero Liability
6th November 2015, 23:08
When would this come in? Sounds utterly bonkers and even stupider than the ignorance already displayed in the T&S consultation doc.

jamesbrown
6th November 2015, 23:16
When would this come in? Sounds utterly bonkers and even stupider than the ignorance already displayed in the T&S consultation doc.

All bets are off, assuming Nick Watt hasn't completely jumped the shark (and it is a pretty crap article). If they're considering something that stupid, they could consider a stupid timeframe too, although I'd still bet on April 2017 given how far reaching the impacts would be (including for gov't departments).

Zero Liability
6th November 2015, 23:20
All bets are off, assuming Nick Watt hasn't completely jumped the shark (and it is a pretty crap article). If they're considering something that stupid, they could consider a stupid timeframe too, although I'd still bet on April 2017 given how far reaching the impacts would be (including for gov't departments).

I can't find anything else on it. I wonder if it's just poor reporting on the T&S consultation? Like you say, it's pretty vague and sparse on details.

I hope you're right. :D Nothing like a bit of cheer to jumpstart the weekend, eh?

jamesbrown
6th November 2015, 23:24
I can't find anything else on it. I wonder if it's just poor reporting on the T&S consultation? Like you say, it's pretty vague and sparse on details.

I hope you're right. :D

It's the sort of thing that would've been briefed and the reference to "a month" and some other details aren't likely to have been made up. That said, it could be terrible reporting/briefing (it is a complicated area afterall), although I doubt it.

BolshieBastard
6th November 2015, 23:27
Whichever way you look at it, contracting as we know it is ****ed. Its not a question of 'if,' it just a question of 'when.'

Zero Liability
6th November 2015, 23:28
It'd "raise" a purely speculative £400m and cost both businesses and the govt how much? Best to wait on a more reliable source, I guess.

AtW
7th November 2015, 00:49
Seems unnecessary given that the new dividends tax that ignores "archaic" tax credit from very real corporation tax increases tax burden pretty close to PAYE anyway. In fact it increases high enough to contemplate "**** right *** you *****" strategy and moving to some more business friendly country.

chopper
7th November 2015, 01:01
It'd "raise" a purely speculative £400m and cost both businesses and the govt how much? Best to wait on a more reliable source, I guess.

IMHO, it would reduce the tax take as independent contractors go permie on typical permie salaries, along with the massively reduced amounts of tax paid on a typical permie salary.

Clearly some of Cameron and Osbourne's cronies at Capita have asked them to work out how to get rid of those pesky independent contractors.

northernladuk
7th November 2015, 02:12
Aim, see toes fire!


They really don't understand do they??

To be fair when there are PSC's that claim JSA inbetween gigs its hard to defend.

jamesbrown
7th November 2015, 07:48
Same story in the Fail (http://www.dailymail.co.uk/news/article-3307960/Osborne-close-tax-loophole-staff-paid-books-follows-furore-BBC-stars.html).

eek
7th November 2015, 08:08
Same story in the Fail (http://www.dailymail.co.uk/news/article-3307960/Osborne-close-tax-loophole-staff-paid-books-follows-furore-BBC-stars.html).

Not quite the devil is in the detail.

From the mail's article


A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company. But a middle-manager brought in to do maternity leave cover at a firm will in future have to go on the firm’s payroll. The new rules will apply to both private firms and the public sector, where there have been numerous examples of senior staff paid ‘off the books’ in recent years.

Which is rather different from what the guardian says.

I think the thing we have to watch is


HM Revenue and Customs is also devising an online checklist to allow employers to assess quickly whether a contractor should be reclassified as a member of staff.

But I suspect that will be designed with HMRC's new focus to manage projects internally where possible.

So yes this may be something to worry about. Equally it could confirm that all the stuff I've been doing while not wasting time on here hasn't been in vain.

Tasslehoff
7th November 2015, 08:08
”A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company. ”

ShandyDrinker
7th November 2015, 08:10
Same story in the Fail (http://www.dailymail.co.uk/news/article-3307960/Osborne-close-tax-loophole-staff-paid-books-follows-furore-BBC-stars.html).

Yep, seen it this morning and made a comment. I'm surprised how many people downvoted it!

I guess before the announcement in the Autumn statement they're gauging the level of public support...

centurian
7th November 2015, 08:24
”A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company. ”

What's 'short periods' though - a month, 3 months, 6 months, a year.

centurian
7th November 2015, 08:26
Yep, seen it this morning and made a comment. I'm surprised how many people downvoted it!

I'm surprised that you're surprised.

Lets not kid ourselves. The vast majority of the public view PSCs as outright tax dodging.

centurian
7th November 2015, 08:31
What's 'short periods' though - a month, 3 months, 6 months, a year.


But there are understood to be examples of professionals such as lawyers working for one company for a short period of two months. Ministers believe that in these circumstances they should be counted as employees and should pay income tax.

:eek:

ShandyDrinker
7th November 2015, 08:35
I'm surprised that you're surprised.

Lets not kid ourselves. The vast majority of the public view PSCs as outright tax dodging.

Unfortunately you're spot on. Generally I like to see the positive but in this instance I can see that the politics of envy are alive and well. Anyone can go contracting but you have to have the confidence that your skills are marketable enough to do so.

eek
7th November 2015, 08:41
I'm surprised that you're surprised.

Lets not kid ourselves. The vast majority of the public view PSCs as outright tax dodging.

PSCs are outright tax dodging. We don't however run PSCs (or at least I don't) we run small specialist consultancies that provide higher quality work than most consultancies at a far lower cost.

centurian
7th November 2015, 08:47
PSCs are outright tax dodging. We don't however run PSCs (or at least I don't) we run small specialist consultancies that provide higher quality work than most consultancies at a far lower cost.

The subtleties of what is and isn't a PSC can be argued until the sky falls in. None of it matters. A sizeable chunk of the public will view that whatever it is you are doing, however you define it and justify it - as tax dodging.

That's why there won't be a widespread outrage over this.

ShandyDrinker
7th November 2015, 09:00
PSCs are outright tax dodging. We don't however run PSCs (or at least I don't) we run small specialist consultancies that provide higher quality work than most consultancies at a far lower cost.


The subtleties of what is and isn't a PSC can be argued until the sky falls in. None of it matters. A sizeable chunk of the public will view that whatever it is you are doing, however you define it and justify it - as tax dodging.

That's why there won't be a widespread outrage over this.

Centurian is right. The definition is just splitting hairs. The government are trying to gauge whether they can get this through on public support so the definition really doesn't matter.

The crux here is whether you source work via an Agency/Intermediary. Those that are able to source work directly should be fine and congratulations to you if you are one of those people. Over the 7+ years I've been contracting about half of that time has been spent in direct contracts but unfortunately I've found them harder to source in the last 3 years.

eek
7th November 2015, 09:05
The subtleties of what is and isn't a PSC can be argued until the sky falls in. None of it matters. A sizeable chunk of the public will view that whatever it is you are doing, however you define it and justify it - as tax dodging.

That's why there won't be a widespread outrage over this.

If it was just the politics of envy a government would just ban the use of PSCs which would be far less work than creating exceptions.

The fact they aren't simply banning the concept of the PSC should tell you something

tomtomagain
7th November 2015, 09:21
”A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company. ”

What the hell is an IT firm? And why should working for one of them as an contractor be OK, whereas working for an Accounting Firm, or Building firm not be?

Tasslehoff
7th November 2015, 09:36
Why bring in rules to reduce tax breaks for PSC and in the next breath ban them almost completely.

Does not make any sense

Zero Liability
7th November 2015, 09:57
IMHO, it would reduce the tax take as independent contractors go permie on typical permie salaries, along with the massively reduced amounts of tax paid on a typical permie salary.

Clearly some of Cameron and Osbourne's cronies at Capita have asked them to work out how to get rid of those pesky independent contractors.

The already dubious figure isn't even right with the advent of the dividend tax. It is complete nonsense.



Yep, seen it this morning and made a comment. I'm surprised how many people downvoted it!

I guess before the announcement in the Autumn statement they're gauging the level of public support...

There's a number of reasonable comments, maybe one of which was yours, which are predominantly upvoted; it's the Fail, there's a lot of idiots who comment and read there, who don't have the foggiest idea what the whole argument is about and think this is about sticking it to the BBC (which the Tories aren't in any way), so I would not think too much of it. If you had made the same comment on The Telegraph it'd go in the opposite direction.

Milkyway
7th November 2015, 10:06
It couldn't possibly involve brown envelopes from our offshoring friends in India of course.

ICT_R_US. :eyes

If what you say has any truth in it, then you do realise that taking bribe is also a crime - don't you?
Or is conveniently ignored, because the taker is British :)

centurian
7th November 2015, 10:08
If it was just the politics of envy a government would just ban the use of PSCs which would be far less work than creating exceptions.

The fact they aren't simply banning the concept of the PSC should tell you something

Oh, it's very much about the politics of envy - that's blindingly obvious.

But yes, it would make more sense just to ban PSCs completely - assuming you can define what they are - something HMRC have never done, although they say this is deliberate.

Milkyway
7th November 2015, 10:17
I have started to think about all this mess in a positive manner :), because it is going to happen, whether we moan about it or not!

TBH, what the govt are doing is great :)

Contractors (i.e. Consultants) who have absolute niche skills and expertise will demand that they will stick ot this one month rule, and just be there with the ClientCo to get that special piece of work (that the permies can't do) will be done and they can leave, and get on with helping other customers next :)
Simple and clean!

This will immediately mean: ClientCo will...

1. Not end up involving the consultant in local politics (since they wont have the time for it)
2, Will keep the requirements absolutely ready, for the consultant to come and hit the ground running with high speed, get the work done, and leave

This will also mean, if the ClientCos want to have people for more time,

1. They will have to hire permies
2. Pay all the full whack of their share of NI
3. End up paying for the hired to get all the benefits of full time employees

Also, its the clientco that will be ending up with interviewing new consultants every once in a month :), since the consultant hired will want to leave in one month, being truthful to Gideon's spirits of this new law :)

The consultant will have done 12 or so clientcos in a year, and that is fun, since he can get back to consulting one of these again in a while, say every 2-3 years once.
There could also be repeat business from client co (needless to say at higher rates), since they will trust and hire him rather than going to try and trust a new one (every one month once).

I think, unknowingly to HMG and HMRC, what is happening is that this new legislation is only a bunch of problems for the ClientCo, not the special skills contractor.
We will moan, and move on, but ClientCos will suffer in terms of flexible work not being available, and the only resort will be either hire full time permies and pay all that lot of cash or get the Indian companies (that will surely result in low quality code for them and high maintenance cost in future!)

So i see BIG problems for businesses, not consultants, on the whole.

But hey, ClientCos are of the thinking that the IR35 changes means its all to do with contractor's tax dodging stuff :) and they are happily keeping quite about it.
In reality it is a law to bite the clientcos hard.

woohoo
7th November 2015, 10:24
Centurian is right. The definition is just splitting hairs. The government are trying to gauge whether they can get this through on public support so the definition really doesn't matter.

The crux here is whether you source work via an Agency/Intermediary. Those that are able to source work directly should be fine and congratulations to you if you are one of those people. Over the 7+ years I've been contracting about half of that time has been spent in direct contracts but unfortunately I've found them harder to source in the last 3 years.

I might have missed it and I'm hungover but why does it matter how you source your work?

ShandyDrinker
7th November 2015, 10:26
I have started to think about all this mess in a positive manner :), because it is going to happen, whether we moan about it or not!

TBH, what the govt are doing is great :)

Contractors (i.e. Consultants) who have absolute niche skills and expertise will demand that they will stick ot this one month rule, and just be there with the ClientCo to get that special piece of work (that the permies can't do) will be done and they can leave, and get on with helping other customers next :)
Simple and clean!

This will immediately mean: ClientCo will...

1. Not end up involving the consultant in local politics (since they wont have the time for it)
2, Will keep the requirements absolutely ready, for the consultant to come and hit the ground running with high speed, get the work done, and leave

This will also mean, if the ClientCos want to have people for more time,

1. They will have to hire permies
2. Pay all the full whack of their share of NI
3. End up paying for the hired to get all the benefits of full time employees

Also, its the clientco that will be ending up with interviewing new consultants every once in a month :), since the consultant hired will want to leave in one month, being truthful to Gideon's spirits of this new law :)

The consultant will ahve done 12 or so clientcos in a year, and that is fun, since he can get back to consulting one of these again in a while, say every 2-3 years once.
There could also be repeat business from client co (needless to say at higher rates), since they will trust and hire him rather than going to try and trust a new one (every one month once).

I think, unknowingly, what is happening is that this new legislation is only a bunch of problems for the ClientCo, not the contractor.
We will moan, and move on, but ClientCos will suffer in terms of flexible work not being available, and the only resort will be Indian companies, that will surely result in low quality code for them and high maintenance cost in future!

So i see BIG problems for businesses, not consultants, on the whole.

But hey ClientCos are of the thinking IR35 changes means something to do with contractor's tax dodging stuff :)
In reality it is a law to bite the clientcos hard.

A really good alternative point if view. However, if the clients are so organised to ensure requirements are absolutely ready, they may as well ensure they have the permies ready onsite to do the work.

Part of the reason for the prevalence of contractors (certainly in software development) is because many clients are so disorganised. Some are better than others but it's a general theme I've seen while contracting, whether direct or via agencies.

Waldorf
7th November 2015, 10:27
Lets not kid ourselves. The vast majority of the public view PSCs as outright tax dodging.

Well look at it from the eyes of the average man in the street:

Being able to claim for travel between home and place of work;

Being able to claim for lunch;

Paying a low salary to avoid paying NIC and PAYE;

Limiting income to avoid paying any personal taxes;

Paying some of earnings to a spouse in the form of salary and/or dividends;

Building up cash in the company and eventually withdrawing it paying just 10% tax.

Is it any wonder HMRC/Government/Media/General Public think using a PSC is taking the P*** ?

Zero Liability
7th November 2015, 10:29
Yeah, if you omit the lack of employment rights etc., it does seem like that. Of course, the average person will in practice be paying far less tax than this (even including NI), because they earn closer to £25k pa, and don't really have a problem with "tax planning" themselves when they do it. For those who do earn in the 40% threshold range, they should ask their govt why it spends so much and thinks it can just stick them with the bill for its overspending.


A really good alternative point if view. However, if the clients are so organised to ensure requirements are absolutely ready, they may as well ensure they have the permies ready onsite to do the work.

Part of the reason for the prevalence of contractors (certainly in software development) is because many clients are so disorganised. Some are better than others but it's a general theme I've seen while contracting, whether direct or via agencies.

Which other business would be forced to terminate its relationship with a client, though, after just one month, or risk being branded not a real business? A 24 month rule would have been arbitrary and potentially insensitive to the nature of projects in some industries, but at least it'd be nowhere near as bad as one month.

ShandyDrinker
7th November 2015, 10:33
I might have missed it and I'm hungover but why does it matter how you source your work?

Because as I understand it with the proposed changes anyone working via an agency will automatically be considered inside IR35 come April 2016. Those working direct will at least have a fighting chance of being able to prove they are outside of IR35.

I am happy to be wrong in my interpretation.

meridian
7th November 2015, 10:36
What I don't quite understand, is why the existing rules (Monday-to Friday, IR35, etc) weren't used on the BBC? The Fail even reports that Fiona Bruce is now back on the payroll, so surely she would be reassessed under IR35?

ShandyDrinker
7th November 2015, 10:36
Well look at it from the eyes of the average man in the street:

Being able to claim for travel between home and place of work;

Being able to claim for lunch;

Paying a low salary to avoid paying NIC and PAYE;

Limiting income to avoid paying any personal taxes;

Paying some of earnings to a spouse in the form of salary and/or dividends;

Building up cash in the company and eventually withdrawing it paying just 10% tax.

Is it any wonder HMRC/Government/Media/General Public think using a PSC is taking the P*** ?

But you're only taking the Daily Wail type of approach. What about the downsides such as periods out of work, benefits of being a permie etc etc?

If contracting is as easy as a regular pay cheque, let the average man on the street go out and do it and stop whinging about the fact that someone else might be doing better than they are.

Zero Liability
7th November 2015, 10:37
But you're only taking the Daily Wail type of approach. What about the downsides such as periods out of work, benefits of being a permie etc etc?

If contracting is as easy as a regular pay cheque, let the average man on the street go out and do it and stop whinging about the fact that someone else might be doing better than they are.

TBF to him, I think he knows that. :D

Milkyway
7th November 2015, 10:39
A really good alternative point if view. However, if the clients are so organised to ensure requirements are absolutely ready, they may as well ensure they have the permies ready onsite to do the work.

Part of the reason for the prevalence of contractors (certainly in software development) is because many clients are so disorganised. Some are better than others but it's a general theme I've seen while contracting, whether direct or via agencies.

Agreed, but i can only talk from my experience and perspective :) (Selfish me!)
Mine is a very special niche area/skill, and i have never seen the permies been able to do this - believe it or not!
It could be that the companies generally don't allow or encourage the permies to spend a lot of time specialising in one / certain specialist areas, and hence i have always found business.

So no matter whether they keep the requirements ready or not, the permies can't do it, so its got to be special skilled consultants like me to do it, and hence in this particular case this new law will only help me better, since i wont have to go around and tell them what they should possible have in the software that i build for them ;), which does take small time for me, but a lot of time for the client co to go around asking their people in various hierarchy to check and come back the chain (by that time its almost 3 weeks me doing what they had asked during that time), and i do that bit after that, costing them more money.

Also i don't have to sit around and help permies learn stuff from my deliverable when i leave (since there won't be any time for it, i will be adamant about this one month thing - i will quote HMRC and HMG law for it :))- thereby i don't have to deal with holding their hands teaching them stuff bit by bit :)
In my experience it has been so painful.

With this new law, its a great toy for me :) since, as though by magic :), the client co will know exactly what they want me to do (and "no teaching the permies" stuff either!), and i will have fun doing exactly that bit and get on with my next piece :)

Many thanks, Gideon, and our beloved HMRC.
Great minds there!

Do you lot want an extra penny in tax please? for this great new piece of law. Can't wait until 2017.
Thanks once again, Govt bods.

ShandyDrinker
7th November 2015, 10:39
Yeah, if you omit the lack of employment rights etc., it does seem like that. Of course, the average person will in practice be paying far less tax than this (even including NI), because they earn closer to £25k pa, and don't really have a problem with "tax planning" themselves when they do it. For those who do earn in the 40% threshold range, they should ask their govt why it spends so much and thinks it can just stick them with the bill for its overspending.

Which other business would be forced to terminate its relationship with a client, though, after just one month, or risk being branded not a real business? A 24 month rule would have been arbitrary and potentially insensitive to the nature of projects in some industries, but at least it'd be nowhere near as bad as one month.

My preference would have been for a 12 or 24 month rule as it would be simple for clients/agencies/contractors to understand. From what I can successive governments purposefully want to keep the rules vague and open to interpretation.

Zero Liability
7th November 2015, 10:41
My preference would have been for a 12 or 24 month rule as it would be simple for clients/agencies/contractors to understand. From what I can successive governments purposefully want to keep the rules vague and open to interpretation.

Although I'm in favour of abolition, even more so with the advent of the dividend tax, this (http://www.contractoruk.com/news/0012286why_supervision_and_direction_are_surely_re d_herrings.html) made a lot more sense to me than time-based rules; but agreed otherwise.

chopper
7th November 2015, 10:43
I might have missed it and I'm hungover but why does it matter how you source your work?
Maybe its a government ruse to get rid of agencies? If we're not contracting, then agencies aren't putting their immense markups on our invoices (reduced CT) and then think of all those agents, out of work, not paying tax or NI but claiming benefits instead.

The law of unintended consequences and all that.

Of course, there will be new jobs for 'HR Business Partners' and payroll staff to deal with all the extra FTCs that come on board.

Zero Liability
7th November 2015, 10:43
Do you lot want an extra penny in tax please? for this great new piece of law. Can't wait until 2017.
Thanks once again, Govt bods.

Well, they can't really call themselves the party of small or medium-sized business, and if this does go through with the details presented, I doubt most big businesses would consider them on their side either, other than a select few cronies. :D Maybe they should just call themselves the party of tax, borrow and spend? Or is that taken by Labour?


Maybe its a government ruse to get rid of agencies? If we're not contracting, then agencies aren't putting their immense markups on our invoices (reduced CT) and then think of all those agents, out of work, not paying tax or NI but claiming benefits instead.

The law of unintended consequences and all that.

Of course, there will be new jobs for 'HR Business Partners' and payroll staff to deal with all the extra FTCs that come on board.

The presumption of SDC was specific to the T&S consultation and IR35 discussion doc. It may be that they've just dropped that entirely and come up with something 'better'.

ShandyDrinker
7th November 2015, 10:50
Although I'm in favour of abolition, even more so with the advent of the dividend tax, this (http://www.contractoruk.com/news/0012286why_supervision_and_direction_are_surely_re d_herrings.html) made a lot more sense to me than time-based rules; but agreed otherwise.

Agreed. In absence of the time based approach, if control was the only other defining factor I'd also be all for that approach.

Milkyway
7th November 2015, 10:53
Well, they can't really call themselves the party of small or medium-sized business, and if this does go through with the details presented, I doubt most big businesses would consider them on their side either, other than a select few cronies. :D Maybe they should just call themselves the party of tax, borrow and spend? Or is that taken by Labour?



The presumption of SDC was specific to the T&S consultation and IR35 discussion doc. It may be that they've just dropped that entirely and come up with something 'better'.

I have a strong feeling, that whatever it is, the outcome will be:

1. Consultants with specialist skill will be able to carry on doing consulting, at a very high rate too, and will be able to move across many pieces of work in a year :)
2. "Employee styled contractors" withe the mind set of "get a job through job serve for a 9-5 work" thinking, are screwed!
3. ClientCo will go through hell (they will have to pay more for special skills contractors, pay a lot more in long term by hiring all permies after the new law, and end up losing to get great contractors (especially locally!) at flexible "hire and fire" anytime (i.e. typically more than 5-6 months) notice model, and will have put up with offshored bad quality (long term costly" companies)
4. Agencies business model is screwed! They will probably be doing a "will get an employee for you, sir" type business

The winner is... Consultants! :)

cojak
7th November 2015, 10:59
I am really looking forward to watching the consequences of this in the current and future government contracts.

The Met has recently given a big contract to Atos, and no matter what they say, Atos won't have the the resources or skills to use only permies.

Next year will prove interesting...

Zero Liability
7th November 2015, 11:00
Agreed. In absence of the time based approach, if control was the only other defining factor I'd also be all for that approach.

Well, you'll notice that in the way the article advocated for it, the control test would also be related to whether the contractor was engaged on a particular time-bound project.


If the work is task-based and there are no specific project deliverables, then there is likely to be control. If the engager can provide specific project deliverables, which require outside expertise – even if there are internal staff doing similar work – which is for a limited time period and is not the replacement for an employed role left unfilled, then there will be no control, or no more than should be the case over an independent contractor.

Where I assume "limited period" would mean not enduring as a function within the firm integrated into its BAU operations, e.g. a cleaner.

I think the approach that article took was pretty sensible, although like the author I'm unclear on why the other two tests should be jettisoned other than making life harder for hector. However, it would at least have the virtue of eliminating Fri-Mon scenarios without decimating the rest of the market.


I have a strong feeling, that whatever it is, the outcome will be:

1. Consultants with specialist skill will be able to carry on doing consulting, at a very high rate too, and will be able to move across many pieces of work in a year :)
2. "Employee styled contractors" withe the mind set of "get a job through job serve for a 9-5 work" thinking, are screwed!
3. ClientCo will go through hell (they will have to pay more for special skills contractors, pay a lot more in long term by hiring all permies after the new law, and end up losing to get great contractors (especially locally!) at flexible "hire and fire" anytime (i.e. typically more than 5-6 months) notice model, and will have put up with offshored bad quality (long term costly" companies)
4. Agencies business model is screwed! They will probably be doing a "will get an employee for you, sir" type business

The winner is... Consultants! :)

Maybe in some cases, but what about cases where the consultant would like more time to gain an appreciation of the business, particularly where the project is quite complex and more time is required to devise a solution/offer advice? There is already a lot of resentment amongst permies in some businesses towards parachuting in consultants, who then leave a couple of months afterwards (rarely as little as one month), leaving someone else to pick up the mess. I don't think anyone is a winner from this, not even HMG itself.

I think it's best to wait on further details, as it's all speculative and hearsay ATM.

Milkyway
7th November 2015, 11:16
"Maybe in some cases, but what about cases where the consultant would like more time to gain an appreciation of the business, particularly where the project is quite complex and more time s required to devise a solution/offer advice? There is already a lot of resentment amongst permies in some businesses towards parachuting in consultants, who then leave a couple of months afterwards (rarely as little as one month), leaving someone else to pick up the mess. I don't think anyone is a winner from this, not even HMG itself."

Yeah, but that will be the headache of the ClientCo :) - not mine. They are one to come up to hiring me :)
As far as i am concerned, i will demand that "one month" only time model, and its up to the clientco to sort things out for me, if they are desperate to hire me.
May be they will split the work into multiple pieces, the first piece to get the knowledge thing that you are talking about, then come back in a few weeks time after that and get me another contract to do the piece of work (i.e. within another one month; and then possibly split it into multiple pieces across many consultants, to do it one after the other) :)
Or else have me to do it for 3 months, breaking my one month only time limit model, but me ending up demanding the moon of the rate for the 3 months piece of work.

You see, this is another headache for the ClientCo, not mine :)
I am an individual, i will moan, and if i was like others here - may be I will blame the foreigners :) and then move on! :)
On the other hand, ClientCo have longer term business to do for their work/projects.
So it becomes a newer headache for them to deal with - on top of other bits i have already thought of!
They have to do a lot of thinking about these things, not me!

It is going to be "hell broken lose" for ClientCos.

BUT the interesting thing is, the cliencos are completely oblivious to all this :)
When they wake up to reality eventually (which i doubt will happen), maybe they will just have enough time to stop Gideon throwing the hell on them, and be able to stop the law passing.
Here is hoping!

centurian
7th November 2015, 11:20
My preference would have been for a 12 or 24 month rule as it would be simple for clients/agencies/contractors to understand. From what I can successive governments purposefully want to keep the rules vague and open to interpretation.

We're in total agreement here. However it's a case of careful what you wish for, because that is what's being suggested - just that it kicks in after 1 month.

If there had been a proposal like, "if you stay anywhere for more than a year, you're taxed as if you are a permie, no exceptions.", I could accept that.

Even at 6 months, it would mean a lot more upheaval, but I could still understand the point of it. It helps to draw a balance between those who are genuinely consulting vs those who are effectively freelance permies. The marketplace would adjust - good contractors, who are able to get up to speed easily would be able to flourish and flip between a number of good clients.

3 months - now that would be harsh. The market would shrink - it would just be too much hassle for some ClientCo's, but true consultants would probably see rates rise.

But 1 month.... it just won't be worth the hassle to many clients.

Zero Liability
7th November 2015, 11:21
It is going to be "hell broken lose" for ClientCos.

And the government itself, given how much it relies on contractors. Gideon's not going to be anyone's darling boy if the articles linked by JB are accurate. :D

centurian
7th November 2015, 11:25
"Maybe in some cases, but what about cases where the consultant would like more time to gain an appreciation of the business, particularly where the project is quite complex and more time s required to devise a solution/offer advice? There is already a lot of resentment amongst permies in some businesses towards parachuting in consultants, who then leave a couple of months afterwards (rarely as little as one month), leaving someone else to pick up the mess. I don't think anyone is a winner from this, not even HMG itself."

Yeah, but that will be the headache of the ClientCo :) - not mine. They are one to come up to hiring me :)
As far as i am concerned, i will demand that "one month" only time model, and its up to the clientco to sort things out for me, if they are desperate to hire me.
May be they will split the work into multiple pieces, the first piece to get the knowledge thing that you are talking about, then come back in a few weeks time after that and get me another contract to do the piece of work (i.e. within another one month; and then possibly split it into multiple pieces across many consultants, to do it one after the other) :)
Or else have me to do it for 3 months, breaking my one month only time limit model, but me ending up demanding the moon of the rate for the 3 months piece of work.

You see, this is another headache for the ClientCo, not mine :)
I am an individual, i will moan, and if i was like others here - may be I will blame the foreigners :) and then move on! :)
On the other hand, ClientCo have longer term business to do for their work/projects.
So it becomes a newer headache for them to deal with - on top of other bits i have already thought of!
They have to do a lot of thinking about these things, not me!

It is going to be "hell broken lose" for ClientCos.


Or they just don't bother to hire you at all - and hire a permie instead, or a 3rd party managed resource, or hire a "temp".

Or they decide that the cost of getting in the resources outweighs the business case, and they bin their project completely

Sure, there will be some projects where they are absolutely desperate - and they will have no choice but to bend over backwards. But for everything else, if hiring a contractor causes them migraine levels of corporate headaches, it will make them explore alternatives.


BUT the interesting thing is, the cliencos are completely oblivious to all this :)
When they wake up to reality eventually (which i doubt will happen), maybe they will just have enough time to stop Gideon throwing the hell on them, and be able to stop the law passing.
Here is hoping!

I think that's the most likely path out of this minefield - as long as it doesn't happen too late

Milkyway
7th November 2015, 11:28
Or they just don't bother to hire you at all - and hire a permie instead, or a 3rd party managed resource, or hire a "temp".

Or they decide that the cost of getting in the resources outweighs the business case, and they bin their project completely

Sure, there will be some projects where they are absolutely desperate - and they will have no choice but to bend over backwards. But for everything else, if hiring a contractor causes them migraine levels of corporate headaches, it will make them explore alternatives.



I think that's the most likely path out of this minefield - as long as it doesn't happen too late

That is what I said too.
Absolutely correct, but what you must also note is that all those options are BIG problems for the clientco, not mine :)
These option will hit them very hard!

I have other options in my life, and i will move on!
They can't carry on doing those options. They will sink!

jamesbrown
7th November 2015, 13:33
Not quite the devil is in the detail.

From the mail's article

.....

Which is rather different from what the guardian says.


There are bound to be some inconsistencies as this is a complicated area for your average hack to understand and for your low-level Treasury lackey to faithfully communicate.

Anyway, we know they're going to do something, and it's going to be at the severe end of possibilities. We also know that they're happy to take some heat from big businesses, unlike v1 in 1999. It's early in the parliament, there's zero effective opposition, they need to fill a gap from the tax credit debacle, and these numbers only need to be vaguely plausible to thread a story. Plus it's an area that's as widely supported for reform as it is misunderstood. Low-hanging fruit. Of course, they've misunderstood the impacts, but they'll take the heat on that in due course.

We'll need to wait for the specifics in the Autumn statement. There are indeed some hooks in the fineprint (as far as that's reliable), such as the highlighted quote below, but the upfront statement is 90% (in keeping with the consultation document), so everything should be interpreted in that context.


In future, anyone working for an organisation for more than a month will normally be considered to be an employee. HM Revenue and Customs is also devising an online checklist to allow employers to assess quickly whether a contractor should be reclassified as a member of staff.

At this stage, I have no idea how it's going to impact me. I typically have a bunch of simultaneous clients, most of whom have no UK tax presence, but the specialist consultancy I provide is generally on infrastructure projects where the first month may be re-writing their requirements :laugh I'll probably need to operate a direct PAYE (DPNI) scheme or something. There's zero chance that an overseas client will form a UK subsidiary for a short-term consultancy gig.

Waldorf
7th November 2015, 14:03
But you're only taking the Daily Wail type of approach. What about the downsides such as periods out of work, benefits of being a permie etc etc?

If contracting is as easy as a regular pay cheque, let the average man on the street go out and do it and stop whinging about the fact that someone else might be doing better than they are.

Well I was trying to see it how the average person will see it. I accept the downsides although in my experience most contractors are rarely sick and rarely out of contract unless they chose to be.

Zero Liability
7th November 2015, 14:21
Well I was trying to see it how the average person will see it. I accept the downsides although in my experience most contractors are rarely sick and rarely out of contract unless they chose to be.

It's whether the entitlement exists or not that matters. There are tradeoffs involved whether the average person is informed of them or not. What's stopping them from becoming contractors, anyway? Probably the trade-offs in question; alternatively, lack of an appropriate skillset. Usually the people I see whining about contractors have the skillset, just not the wherewithal.

Tasslehoff
7th November 2015, 14:26
Contracting is a massive risk, and that risk should be rewarded relatively.

stek
7th November 2015, 14:28
Did anyone see this bit in the linked article?



The government acknowledges that a small number of professionals will still legitimately use personal service companies. Some IT workers might work for a company for a short period or they might work for multiple companies at the same time. In that case they would not be seen as an employee. Builders doing one job on a private house would be exempt.

jamesbrown
7th November 2015, 14:36
Did anyone see this bit in the linked article?

Yeah, some of the details will matter, but let's not lose sight of the 90% target. If they have a 1-month baseline and a set of conditions for longer contracts, those conditions will be onerous, such as a relatively even distribution between clients. There's a lot more to this than defining headline conditions though. For example, "1 month" will require a precise definition to avoid a sequence of interconnected ~1-month contracts based on project stages. One of the issues with defining strict deeming criteria, rather than vague notions such as SDC, is that people will be looking for loopholes.

centurian
7th November 2015, 15:45
Did anyone see this bit in the linked article?

Yep, saw that, but the devil is in the detail.

I think those that genuinely have multiple clients on the go at the same time may escape this - if ClientCo will still be willing to engage them, now that they are on the hook.

Although, I think the number of contractors that really have dual contracts are very low - a few hours in the evening or at the weekend working for someone else won't cut it - the judge ignored that in the Dragonfly case.

jamesbrown
7th November 2015, 15:50
Yep, saw that, but the devil is in the detail.

I think those that genuinely have multiple clients on the go at the same time may escape this - if ClientCo will still be willing to engage them, now that they are on the hook.

Although, I think the number of contractors that really have dual contracts are very low - a few hours in the evening or at the weekend working for someone else won't cut it - the judge ignored that in the Dragonfly case.

Even those that operate multiple clients simultaneously (and I'm one of them) are likely to be caught on some level as the workload is never symmetric between clients (typically very asymmetric) and it changes constantly with client mix and focus. You wouldn't have any basis to set-up and operate a business, because you could be caught during one year (assuming the timeframe is a tax year) and not caught the next year. It would be completely unworkable long-term.

SunnyInHades
7th November 2015, 18:23
https://www.youtube.com/watch?v=dMuKRbJa3O8

BrilloPad
7th November 2015, 18:35
I remember when Gordon Brown talking about people leaving a company to come back contract doing the same job. It all sounded so innocuous.

The government is determined to kill us off like cockroaches.

When will they start a war on branded companies paying no tax?

AtW
7th November 2015, 18:45
Can't believe I voted for them :eyes

jamesbrown
7th November 2015, 19:14
Some reaction here

Zero Liability
7th November 2015, 20:14
We'll see. I think it's going to be a hard sell, and perhaps they may delay implementation until April 2017 to reduce resistance. Even then, they may find big business and their own departments reluctant to just take the hit.


Can't believe I voted for them :eyes

I'm glad I didn't, and won't be in the future, either.

AtW
7th November 2015, 20:17
We'll see. I think it's going to be a hard sell, and perhaps they may delay implementation until April 2017 to reduce resistance.

:rollin:

Lords won't be intervening on this one and Gideon urgently needs to find a LOT of money quick to make up with delayed introduction of cuts to tax credits.

Zero Liability
7th November 2015, 20:19
He won't be getting a lot, as even the contrived figure of £400m will now be less than half that following the dividend tax's introduction. This is a silly way of going about things when they could just tweak that tax, as opposed to angering one of the groups they supposedly represent.

I wonder if it's just the usual tactic of coming up with something obviously barmy and detrimental, to soften resistance to a still ridiculous, but proportionately less so, proposal like the T&S changes, and then pretending to have seen 'reason'. Either way, I'm reserving judgement until I see further details.

AtW
7th November 2015, 20:21
I wonder if it's just the usual tactic of coming up with something obviously barmy and detrimental, to soften resistance to a still ridiculous, but proportionately less so, proposal like the T&S changes, and then pretending to have seen 'reason'. Either way, I'm reserving judgement until I see further details.

No.

It's just a very easy target - they will be losing a fair whack of revenue with that promised £50k threshold for 40% tax plus increased personal allowance is costing them, so they need to get as many people as possible into PAYE.

The really evil thing they are going to do is with CGT - obvious not on main house sales, that's a taboo!

Zero Liability
7th November 2015, 20:27
Right, but what's £200m or so p.a. going to help? That is notwithstanding any losses in taxes they might suffer on account of the fact that contractors earn higher rates than comparable permies, plus the higher costs govt departments will suffer where they now have to engage permies, who come with an array of fixed costs.

BrilloPad
7th November 2015, 20:37
I am not convinced the government and their puppet masters care about money. IMO it is about control.

EternalOptimist
7th November 2015, 20:41
As with most changes, there will be winners and losers


winners :-
Body shops
Bobs
Central office (if the brown envelopes theory is correct)
Treasury administration(pigeon-holing everyone. fewer anomalies)
Treasury administration(forget IR35 etc. its been superceded)
SJW feeling that the right thing has been done

losers :-
Tax revenue
engagers.
contractors and families
agents
accountants


What is lacking is a cost benefit analysis. obviously, we all 'know' the answer

I just hope to high heaven that the guy who does it gets it right. If he does , I will live with it

jamesbrown
7th November 2015, 21:06
These high-level numbers aren't really numbers in the ordinary sense, more statements of intent or WAGs that allow politicians to thread a story with the public. We all know that the £400m collapses under scrutiny (e.g. dividend tax), but it serves its purpose as a statement of intent w/r to tax avoidance. Politics isn't about what the reasonable person might do, but about capturing and leveraging the public mood, and the public really isn't that sophisticated on these issues. By the same token, Gideon et al. will listen to big businesses, up to a point, because they can shape the public mood via our free press :D The timing of this is squarely aimed at the CBI conference on Monday.

MPwannadecentincome
7th November 2015, 21:32
In my opinion....

Someone in goverment and / or treasury wants to do a way with PSC's, they would much prefer that the "flexible" workforce is provided through the larger IT companies who will willingly ship any employee from anywhere to any client site. By making it harder for a client to hire a Ltd Co contractor, the more likely the clients will start to go to the larger companies. This model, if successful, will ruin the contract agencies, in effect the margin for our hard work will go to the directors and shareholders of these larger companies who will become even more stinking rich.

Some large Clients banning the use of UK contractors and only taking resources from the big IT or 3rd party resourcing firms - mostly offshore providers - has forced those same companies to try to approach contractors onto their own payroll to fill the gap in skills their own workforce has - I have seen this happen. Yes they know the IT company will charge UK based staff at higher rates than offshore based staff coming here on a Visa, some Projects will only succeed with some UK staff onboard. In the very short term these large companies may take contractors to fill roles at their clients, longer term they will "persuade" those resources to go permanent or to just go.

It could be these large Clients have bent the ear of the treasury to make what they think is their own good company policy more widespread in the hope of a longer term drop in costs? CEO at the top doesn't like "expensive" UK staff, they don't understand the value they bring, all they see are the numbers.... the numbers look better if they can outsource at a fixed price, so if the govt does away with PSCs their minion managers can't hire contractors anymore and will be forced to outsource because taking on permies will be banned too!

The only "flexibility" left for the likes of us who are unable to continue as PSC would be to job hop between the larger companies trying to get pay rises along the way.

AtW
7th November 2015, 21:52
Right, but what's £200m or so p.a. going to help?

It's ideologically motivated - essentially they don't want PSCs to exist.

A lot of people missed on pension auto enrolment thingy - it is essentially a new increase in employer NICs on one hand and taking money from employees into pension ponzi scheme on another. This tax also isn't limited by relatively small threshold, so Govt stands to make a shredload from it - they don't want anybody to hide in a corporate envelope to dodge it.

Bear in mind that there will be a new round of taxes at some point when Labour gets in - the scumbags work together on such things - both Tories and Labour passed auto enrollment because they are all on gold plated final salary pension that they want to be paid by others.

IR35 did not work because Internet allowed people to organise, pool resources together and fight it off. So now it's the revenge of the Govt.

Zero Liability
7th November 2015, 22:06
I don't disagree that they're probably operating on ulterior motivations. Money certainly is not what they're going to get from decimating the sector.

NibblyPig
8th November 2015, 00:06
I just wanna weigh in the whole 'how the public sees contractors' debate, with all our vast riches and wonderful tax evading ways...

I reckon joe public would be pretty jealous right up until the point where you told him that you could be let go at any second and be out of work for 3 months, 6 months, etc.

See how joe public would feel if he were fired the next day with no redundancy money or anything else, or that they're saving up to take everyone to disneyworld but it was cancelled because the contractor caught the flu and was off sick for 2 weeks (unpaid of course) and they had to pay the mortgage. He or she can explain that to their partner and kids....

I'd hope the reality would then kick in, if you actually put things in real terms. The good money and stuff is unlikely to be worth the instability in the eyes of the unlightened permie public.

Tasslehoff
8th November 2015, 00:16
So are we ****ed now or what?

northernladuk
8th November 2015, 00:43
So are we ****ed now or what?

Yup.

jds 1981
8th November 2015, 07:53
Any chance companies such as HSBC might take this as another reason to leave the UK?

I'm very annoyed, not been contracting long, left a nice cushty job for contracting. Felt that changes for things like child tax credits that I've already been affected by were fair. But if this is anything like specified will be horrendous.

As others have said, who to vote for now? Tories would be permanently off my list.

cojak
8th November 2015, 09:34
Any chance companies such as HSBC might take this as another reason to leave the UK?

I'm very annoyed, not been contracting long, left a nice cushty job for contracting. Felt that changes for things like child tax credits that I've already been affected by were fair. But if this is anything like specified will be horrendous.

As others have said, who to vote for now? Tories would be permanently off my list.
And my ex-contracting mate say "Thanks!". It's comforting going into a job where the seat is still warm... :)

woohoo
8th November 2015, 09:49
Always fancied living somewhere warm, perhaps its time to hang up the contracting gloves and take a perm job in the sun.

Tasslehoff
8th November 2015, 09:55
I just don't understand why they would curb PSC with one breath (divi tax, T&S , IR35 review) and in the next breath outlaw them completely.

It would force thousands of people in perm work massivley reducing the temp workforce, forcing companys to go throug massive body shops like Accenture and pay for overpriced crap.

Not to mention the ancillary revenue list via contractor specialized company's (agencies, accountants, mortgage brokers etc) the next cost of that is surley more than 400m?

Plus with the Divi tax 400m is no where near a valid number, it would be nearer half that?

I just don't get it, something else is going on here that we are not aware of. Gutted as I only got into contracting a couple of years ago and really enjoying it, I am paying probably double the amount oftax now as I was as a permie and my current plan is to go back to permie land.

Just seems I'll conceived, surley someone will do a cost benefit analysis and realise this is a bad idea. IPSE must weigh in here surley, what am I paying my yearly sub's for?

Looks like we all need to engage plan B and soon. Crazy...

Milkyway
8th November 2015, 09:55
Yup.

Indeed, but also note that so are everyone else too!

Like these Tory sh*ts keep saying - we are all in this together - yes with this new proposal, we will ALL go down together too.

Its NOT only contractors that this will destroy. It will also:

1. Hit hard on long term costs, the ClientCo
2. Accountants; in fact all these firms that call themselves "Contractor accountants" :), they are all dead!
3. Agencies
4. Sites like JobServe etc, which thrive on contractor job posts (especially the fake network engineer posts sort of thing :))
(since nobody will be advertising for one-month roles :), thanks Gideon)
5. Specialist mortgage providers like FreelanceFinancials, contractor mortgagees etc.
6. IPSE
7. QDOS
8. HMRC & HMG themselves, since the Tax revenue itself overall be very less, given all contractors will move into permie jobs with salary that pays well well below what they used to be paid, meaning the tax and NI will also be less (remember that if the CLientCos sees a big wave of people moving into permie jobs, they will cunningly reduce the salary too :( )
9. Tories themselves :), since come 2020 they will be OUT (certainly i will not vote for them [and neither my family and extended family and my friends and relatives], for their backstabbing)

Indeed, we are all in this together! :) I wonder if this is what these parasites meant all these days before this G/Election, when they kept on saying this. Hmm!

Also, while we are at it, I will remember vote to be in the EU, since that is the only option available to move out and work outside UK, in case these tory nonsense does more harm to businesses and permies market too - maybe by loosening up on immigration more, who knows!

ShandyDrinker
8th November 2015, 10:11
Indeed, but also note that so are everyone else too!

Like these Tory sh*ts keep saying - we are all in this together - yes with this new proposal, we will ALL go down together too.

Its NOT only contractors that this will destroy. It will also:

1. Hit hard on long term costs, the ClientCo
2. Accountants; in fact all these firms that call themselves "Contractor accountants" :), they are all dead!
3. Agencies
4. Sites like JobServe etc, which thrive on contractor job posts (especially the fake network engineer posts sort of thing :))
(since nobody will be advertising for one-month roles :), thanks Gideon)
5. IPSE
6. QDOS
7. HMRC & HMG themselves, since the Tax revenue itself overall be very less, given all contractors will move into permie jobs with salary that pays well well below what they used to be paid, meaning the tax and NI will also be less (remember that if the CLientCos sees a big wave of people moving into permie jobs, they will cunningly reduce the salary too :( )
8. Tories themselves :), since come 2020 they will be OUT (certainly i will not vote for them, for their backstabbing)

Indeed, we are all this in together!

I wonder if this is what these parasites meant all these days before this G/Election, when they kept on saying this. Hmm!

As you say, the collateral damage caused by these changes will be substantial. I just cannot see that the figures will add up and indeed could end up having greater costs (both economic and societal) than anticipated. Contractors going back to perm (if indeed companies want permies), a glut of people on the market thus driving salaries down. Even if contractors emigrate, companies will cry skills shortage and open the floodgates.

The only winners here will be larger IT consultancies. However, there is nothing stopping a bunch of enterprising contractors setting up their own consultancy. Anyone know any good sales people with plenty of industry contracts? The question then is (asked somewhat tongue in cheek), when do you cease being a consultancy and become an intermediary?

I can't help but think we are unfortunately participating in a race to the bottom. Thanks Gideon.

jds 1981
8th November 2015, 10:12
And my ex-contracting mate say "Thanks!". It's comforting going into a job where the seat is still warm... :)

Sure it was warm, but they don't wonder why it also feels wet?

jds 1981
8th November 2015, 10:19
Indeed, but also note that so are everyone else too!

Like these Tory sh*ts keep saying - we are all in this together - yes with this new proposal, we will ALL go down together too.

Its NOT only contractors that this will destroy. It will also:

1. Hit hard on long term costs, the ClientCo
2. Accountants; in fact all these firms that call themselves "Contractor accountants" :), they are all dead!
3. Agencies
4. Sites like JobServe etc, which thrive on contractor job posts (especially the fake network engineer posts sort of thing :))
(since nobody will be advertising for one-month roles :), thanks Gideon)
5. IPSE
6. QDOS
7. HMRC & HMG themselves, since the Tax revenue itself overall be very less, given all contractors will move into permie jobs with salary that pays well well below what they used to be paid, meaning the tax and NI will also be less (remember that if the CLientCos sees a big wave of people moving into permie jobs, they will cunningly reduce the salary too :( )
8. Tories themselves :), since come 2020 they will be OUT (certainly i will not vote for them [and neither my family and extended family and my friends and relatives], for their backstabbing)

Indeed, we are all in this together! :) I wonder if this is what these parasites meant all these days before this G/Election, when they kept on saying this. Hmm!

Also, while we are at it, I will remember vote to be in the EU, since that is the only option available to move out and work outside UK, in case these tory nonsense does more harm to businesses and permies market too - maybe by loosening up on immigration more, who knows!

Also accounting software companies, recruitment agencies (does this come under your 'agencies' point)? They'd have to drop headcount. Specialist mortgage brokers.
Industry is having a hard time, seems they want to kill services too....

Darkling
8th November 2015, 10:23
From the article:


An agency would be responsible if they provide consultants to businesses

That's the crucial part. ClientCos won't object to this as long as we end up on the agency payroll rather than their own.

Milkyway
8th November 2015, 10:29
As you say, the collateral damage caused by these changes will be substantial. I just cannot see that the figures will add up and indeed could end up having greater costs (both economic and societal) than anticipated. Contractors going back to perm (if indeed companies want permies), a glut of people on the market thus driving salaries down. Even if contractors emigrate, companies will cry skills shortage and open the floodgates.

The only winners here will be larger IT consultancies. However, there is nothing stopping a bunch of enterprising contractors setting up their own consultancy. Anyone know any good sales people with plenty of industry contracts? The question then is (asked somewhat tongue in cheek), when do you cease being a consultancy and become an intermediary?

I can't help but think we are unfortunately participating in a race to the bottom. Thanks Gideon.

Yep, also added some more to the list of collateral damages :)

The beauty is :):) everyone of these others in the list seems to think that its only the contractors that are affected :)
As if this new law is to kill the tax dodging contractors!! :)

In fact, i just saw this advert from InTouch accounting on the forum page above, where it says "Are you prepared?" Dividend change is coming! :)
As if its the contractor's headache and they are there to help :)

I want to ask these companies, "Are you prepared too? The death bells are ringing for your business model entirely too!"

There are so many people from these firms, including QDOS, IPSE, contractor accountants, agencies, etc, and they seem to be absolutely quite :)
They need to realise that if their business depends on contractors model of business, they need to raise some voice too!!!
But it seems they are in complete void about the impact to them!

But i suppose, when things change, these businesses will remodel their business to suite the changed scenario - for eaxmple since this change will make more immigration into UK, these companies will remodel themselves to work favorably for immigrants and to help them and become "immigrant specialist accountants" or something :)

Interesting!

oracleslave
8th November 2015, 10:36
From the article:



That's the crucial part. ClientCos won't object to this as long as we end up on the agency payroll rather than their own.

I assume it follows that the ClientCo is responsible for those contractors who are direct for more than a month?

Milkyway
8th November 2015, 10:38
From the article:
That's the crucial part. ClientCos won't object to this as long as we end up on the agency payroll rather than their own.

But remember, this will not mean that the clientcos will go to agencies to get their workforce, since these nuts want flexible workforce and agencies can't offer them with this new forced payroll model.

The clientCo nuts will simply go to offshore cos like Accenture and get it from them.
The traditional Agencies can't beat the Accenture, TCS, Infosys like parasites.

Also, can you imagine the low levels of salary that will be in place, when a couple of million contractors move into permiedom!
This change will mean drastic shortage of flexible workforce, and it can only mean offshore parasite companies to come over!

Other options for local contractors, could be for moving elsewhere into EU (if we don't leave EU in the next few years that is :) - if we do, we are stuck here for ever!)

centurian
8th November 2015, 10:38
I just don't understand why they would curb PSC with one breath (divi tax, T&S , IR35 review) and in the next breath outlaw them completely.

Likewise, seems bonkers. I can think of two reasons

1. Left hand doesn't know what the right hand is doing

2. A conclusion that all the different piecemeal things (T&S, IR35, divi tax) - will just add more fudges onto a sticking plaster - and they need to wield out the sledgehammer and simply smash 90% of PSCs completely.

centurian
8th November 2015, 10:44
Like these Tory sh*ts keep saying - we are all in this together - yes with this new proposal, we will ALL go down together too.

Its NOT only contractors that this will destroy. It will also:

You may well be correct, but hardly a cause for celebration. Knowing the pimp has been laid off won't make me feel much better if facing long-term bench duty.

And I think HMRC are fully aware of the knock-on consequences. An entire industry has grown up around IR35 - and HMRC want it all killed off.

ShandyDrinker
8th November 2015, 11:06
Yep, also added some more to the list of collateral damages :)

The beauty is :):) everyone of these others in the list seems to think that its only the contractors that are affected :)
As if this new law is to kill the tax dodging contractors!! :)

...

Interesting!


You may well be correct, but hardly a cause for celebration. Knowing the pimp has been laid off won't make me feel much better if facing long-term bench duty.

And I think HMRC are fully aware of the knock-on consequences. An entire industry has grown up around IR35 - and HMRC want it all killed off.

I agree with Centurian.

Milkyway - you make some good and interesting points. However, given the fact that Gideon et al are going about the systematic dismantling of contracting and supporting industries with gusto, your smiley faced celebrations may be somewhat premature. Although by your own admission you are not being hit yet, don't bank on the fact that some other nuance which comes to light in the coming months won't also hit you and your business.

Darkling
8th November 2015, 11:15
But remember, this will not mean that the clientcos will go to agencies to get their workforce, since these nuts want flexible workforce and agencies can't offer them with this new forced payroll model.


I don't think that's strictly true; if this goes through, I suspect we will be employed by the agencies on non-exclusive zero hour contracts.

From the client's perspective, this makes almost no difference to them at all. The agencies will be forced to operate on a similar model to the one umbrella companies use now.

cojak
8th November 2015, 11:22
Sure it was warm, but they don't wonder why it also feels wet?

He says it's not only dry, but safe as well. ;)

He reckons he'll wait it out for 2 years and come back when all this blows over.

Milkyway
8th November 2015, 11:22
I agree with Centurian.

Milkyway - you make some good and interesting points. However, given the fact that Gideon et al are going about the systematic dismantling of contracting and supporting industries with gusto, your smiley faced celebrations may be somewhat premature. Although by your own admission you are not being hit yet, don't bank on the fact that some other nuance which comes to light in the coming months won't also hit you and your business.

Guys, I am very sorry about that smiley. I should probably have made it clear what i meant there.

Those smileys are smiling i agree, but i made them that entirely in the sense of "annoyed and amused".
I am annoyed that no one from other industries that are being damaged are voicing anything on this, excepting contractors - which includes me!
I smiled in that sense, not at the fate of what is about to happen with this new law change.

It sounds as though this law change is to break down the tax dodging contractors, and has no other intentions aside that. This is just not the case.
And given that others like the IPSE, agencies, QDOS members, etc not voicing on this, makes the feeling that its just the contractor's tax problem!
Hence i felt annoyed and amused, since that is not the real picture.
Sorry - i should have been clear about that!
I am one among the damaged too, and I am clearly not celebrating at all.

SunnyInHades
8th November 2015, 12:40
I suspect that umbrella companies would be happy with this possible 'crackdown' - contractors (i.e. 'employees') working through them will be exempt, business as usual.

centurian
8th November 2015, 14:01
I suspect that umbrella companies would be happy with this possible 'crackdown' - contractors (i.e. 'employees') working through them will be exempt, business as usual.

Probably - and for those contractors that work through umbrellas (yes, there are quite a few of them), it's easy to think - great, I'm not affected.

But that's only if clients continue to engage a contractor through an umbrella.

At the moment, once the money goes out of the door, clients don't really care what route it takes to get to the contractor.

But under the proposals, clients will be responsible for anything out of place, which means they will need to expend a lot of effort in vetting umbrellas to make sure they really are a valid PAYE umbrella - a lot of offshore schemes describe themselves as "umbrellas" nowadays.

How many will bother with contractors - depends on the detail of the proposals

EternalOptimist
8th November 2015, 14:09
Just occurred to me that there is a whole other tranche of people who will be worked over by this:frown
If I get forced to go permie, at my current gig, there is at least one guy who will not required any longer and possibly two

ShandyDrinker
8th November 2015, 14:40
Guys, I am very sorry about that smiley. I should probably have made it clear what i meant there.

Those smileys are smiling i agree, but i made them that entirely in the sense of "annoyed and amused".
I am annoyed that no one from other industries that are being damaged are voicing anything on this, excepting contractors - which includes me!
I smiled in that sense, not at the fate of what is about to happen with this new law change.

It sounds as though this law change is to break down the tax dodging contractors, and has no other intentions aside that. This is just not the case.
And given that others like the IPSE, agencies, QDOS members, etc not voicing on this, makes the feeling that its just the contractor's tax problem!
Hence i felt annoyed and amused, since that is not the real picture.
Sorry - i should have been clear about that!
I am one among the damaged too, and I am clearly not celebrating at all.

Others such as IPSE, QDOS, accountancy bodies (e.g. ICAEW) and so on have been responding to this; they just haven't been advertising the fact on contractor forums. If you do some background research, you'll see that many organisations/bodies have responded. Rather than taking on board what has been said in the responses, my belief is that it has strengthened their (HMRC/Treasury/Tories) resolve that we're all tax dodgers anyway hence the articles in the Guardian and Mail this weekend and the announcement of pushing 90% onto the payroll.

Although I don't agree with political protest parties, if there was a realistic alternative to the Tories/Labour which is prepared to back contractors and the flexible workforce in next election (I know... it's a long way off yet), I'd be happy to vote for them.

AtW
8th November 2015, 15:22
Any chance companies such as HSBC might take this as another reason to leave the UK?

No, it's the opposite - they'll be getting cheaper workforce that can be sacked as easily

AtW
8th November 2015, 15:23
Always fancied living somewhere warm, perhaps its time to hang up the contracting gloves and take a perm job in the sun.

Security guard in Egypt, you may still need to keep those gloves on though ...

AtW
8th November 2015, 15:24
It would force thousands of people in perm work massivley reducing the temp workforce, forcing companys to go throug massive body shops like Accenture and pay for overpriced crap.

Nice part of that overprice goes into donations to political parties...

AtW
8th November 2015, 15:30
9. Tories themselves :), since come 2020 they will be OUT (certainly i will not vote for them [and neither my family and extended family and my friends and relatives], for their backstabbing)

+100

No way I will vote for Gideon or Tories in general ever again even if the other choice will be the Price of Darkness himself.

AtW
8th November 2015, 15:38
Although I don't agree with political protest parties, if there was a realistic alternative to the Tories/Labour which is prepared to back contractors and the flexible workforce in next election (I know... it's a long way off yet), I'd be happy to vote for them.

Allowing to call yourself as flexible workforce only invites Gideons to bend you over...

ShandyDrinker
8th November 2015, 16:23
Allowing to call yourself as flexible workforce only invites Gideons to bend you over...

True. Whether flexible, specialist or whatever terminology you want to use, Gideon is going to bend you over. Unless of course you are a contributing handsomely to the Tory coffers, be the beneficiary of a family trust fund, be a member of the old boys network and so on!

ASB
8th November 2015, 16:27
+100

No way I will vote for Gideon or Tories in general ever again even if the other choice will be the Price of Darkness himself.

I hadn't heard Peter Mandelson was making another comeback.

stek
8th November 2015, 16:31
Is it me or is everyone knee-jerking about an article in the Grauniad about something that might happen or might not?

NotAllThere
8th November 2015, 16:51
Is it me or is everyone knee-jerking about an article in the Grauniad about something that might happen or might not?

It's not just you. I think there's a lot of FUD being spread around.

ShandyDrinker
8th November 2015, 17:08
Is it me or is everyone knee-jerking about an article in the Grauniad about something that might happen or might not?


It's not just you. I think there's a lot of FUD being spread around.

It's not just you. Not necessarily a knee jerk reaction as such, I think many (me included) are just trying to understand the bigger picture. Until we hear any detail in the Autumn statement, if indeed anything is announced, everything at this stage is just speculation.

eek
8th November 2015, 17:12
It's not just you. I think there's a lot of FUD being spread around.

+2. I read the article as some proposals are going forward to remove fake self employment and left it at that. The devil is in the detail and we won't get that until the end of the month (if we are lucky, it could be later than that).

And I don't think the 90% figure is anything to worry about, if it covers those forced to use an umbrella not just PSCs.

Oh and Hmrc don't want the big outsources to win. They feel utterly cheated by the outsourcing Giants and want to escape that scenario

MicrosoftBob
8th November 2015, 17:16
+2. I read the article as some proposals are going forward to remove fake self employment and left it at that. The devil is in the detail and we won't get that until the end of the month (if we are lucky, it could be later than that).

And I don't think the 90% figure is anything to worry about, if it covers those forced to use an umbrella not just PSCs.

Oh and Hmrc don't want the big outsources to win. They feel utterly cheated by the outsourcing Giants and want to escape that scenario

Why should HMRC care it's not their money they're wasting, surely their budget comes from the same magic money tree Comrade Corbyn is so keen on

administrator
8th November 2015, 17:29
Until we actually see the details in the Autumn Statement it is all conjecture. The details of the Guardian piece don't look promising though due to the snippet jamesbrown quoted. Here it is again:


A government source said: “This is about fairness in the tax system. It is just not fair to have people in the same company doing the same jobs paying different levels of tax." It appears to be propaganda put out by the Gov to a few journalists. As others have said in this thread, to show the masses that they are doing something about this "problem". The fact that the news has been put out there is what is making some of us jumpy.

Like I said, until we actually see the detail then we can't say for sure about any of it. Going to feel like a long wait for the 25th though.

SueEllen
8th November 2015, 18:09
Why should HMRC care it's not their money they're wasting, surely their budget comes from the same magic money tree Comrade Corbyn is so keen on

They actually care because the out-sourcers aren't delivering what they promised on time, then one of HMRC's head honchos has to go to a Commons Select Committee and explain why they haven't delivered the project they promised.

Also government departments have difficultly getting permanent staff with the very poor salaries they are offering compared to the private sector for the skills they want.

BrilloPad
8th November 2015, 18:12
It appears to be propaganda put out by the Gov to a few journalists.

Which is how things start. Government will gauge public reaction.

I am disappointed that admin and mods seem intent on pouring oil on unfounded speculation! This is CUK! Let the extrapolation begin....

jamesbrown
8th November 2015, 18:29
Until we actually see the details in the Autumn Statement it is all conjecture. The details of the Guardian piece don't look promising though due to the snippet jamesbrown quoted. Here it is again:

It appears to be propaganda put out by the Gov to a few journalists. As others have said in this thread, to show the masses that they are doing something about this "problem". The fact that the news has been put out there is what is making some of us jumpy.

Like I said, until we actually see the detail then we can't say for sure about any of it. Going to feel like a long wait for the 25th though.

Agreed, even down to the choice of papers. However, it can't be dismissed as taking us no further forward than the IR35 discussion and T&S consultation. This has been briefed and, a month after the end of the discussion and consultation, it alludes to a default position that involves something more draconian and, potentially, on a shorter timeframe than might have been anticipated. Certainly, the detail will matter, but the overall message and timing also matters because it cements the IR35 discussion as a position leading into the CBI conference and Autumn Statement (in case anyone was in any doubt) and one in which the favoured approach is probably a draconian one that doesn't mess around with SDC and instead accepts that employment is a necessary outcome (and not just for tax purposes, hence the need to sell this to CBI).

stek
8th November 2015, 18:33
It's not just you. I think there's a lot of FUD being spread around.

Why did NAT get loads of thanks for that when it was basically affirming my previous post wot I got no thanks for?

It's 'Thanks' for the boys isn't it?

Zero Liability
8th November 2015, 18:36
on a shorter timeframe than might have been anticipated.

Do you mean that as in April 2016 instead of 2017 for the IR35 stuff?

ShandyDrinker
8th November 2015, 18:57
Do you mean that as in April 2016 instead of 2017 for the IR35 stuff?

God help us all if that's the case...

My interpretation was that it would be in line with IR35 in 2017. However, given the current appetite from Gideon and friends, we could be in for further shocks yet sooner than anticipated.

With the number of friends Gideon is making right now... I really don't fancy his chances to be the next PM.

jamesbrown
8th November 2015, 19:24
Do you mean that as in April 2016 instead of 2017 for the IR35 stuff?

I don't think they had any intention of doing that (e.g. based on the summer budget documents). Also, FB 2016 will be under review now and the first draft will appear in around a month. Essentially, I doubt it, and anything rushed would ultimately backfire, but you have to wonder, given the strength of the rhetoric. It would be easier to push through something simple/draconian that superseded both the T&S and IR35 consultations in a shorter timeframe (especially if they now have doubts about SDC working beyond the agency legislation, as that was the basis for T&S). Bottom line, I doubt it, but I would've dismissed it outright a few days ago; we'll have to wait for the AS.

SueEllen
8th November 2015, 19:32
My interpretation was that it would be in line with IR35 in 2017. However, given the current appetite from Gideon and friends, we could be in for further shocks yet sooner than anticipated.

Well there are rumours that IDS was going to resign if Gideon tried to force him to make cuts to universal credit



With the number of friends Gideon is making right now... I really don't fancy his chances to be the next PM.

It's actually expected by pundits that none of the usual suspects will become PM due to them causing divisions within the party - so Osborne, May and Boris are all out.

Zero Liability
8th November 2015, 19:37
I don't think they had any intention of doing that (e.g. based on the summer budget documents). Also, FB 2016 will be under review now and the first draft will appear in around a month. Essentially, I doubt it, and anything rushed would ultimately backfire, but you have to wonder, given the strength of the rhetoric. It would be easier to push through something simple/draconian that superseded both the T&S and IR35 consultations in a shorter timeframe (especially if they now have doubts about SDC working beyond the agency legislation, as that was the basis for T&S). Bottom line, I doubt it, but I would've dismissed it outright a few days ago; we'll have to wait for the AS.

That was my thinking, too. It looks like the soonest they will be able to manage it is April 2016, but they risk rushing it and also facing heightened resistance (because this is a huge change on the margins for loads of business models) if they do it too fast, so April 2017 is possible too. The entire approach comes across as very desperate and rushed through, but at the moment there's very few details so we're limited to conjecture.

ShandyDrinker
8th November 2015, 20:34
That was my thinking, too. It looks like the soonest they will be able to manage it is April 2016, but they risk rushing it and also facing heightened resistance (because this is a huge change on the margins for loads of business models) if they do it too fast, so April 2017 is possible too. The entire approach comes across as very desperate and rushed through, but at the moment there's very few details so we're limited to conjecture.

While it may be desperate and rushed through, they appear to be following the well trodden path of delivering unpopular policies/changes early on in the parliament in the hope that come election 2020, the electorate will have had time to get used to the changes and any ill will should have subsided by then. This is why I mentioned the Lib Dems and tuition fees earlier in the thread. For changes such as those being proposed, people have very long memories indeed.

They may get lucky, we may have a completely different set of things to worry about post EU referendum so a lot of this may well get forgotten.

administrator
8th November 2015, 21:53
Seems likely to be April 2016 as that is when the Finance Act will be enacted. But what we hear at AS and what is actually in the FA may differ. First wait for the AS and then another wait for the details of the Finance Act in April as that is where the real detail will be. Will there be any chance for lobby groups like IPSE and individual pressure on MPs from their contracting constituents to seriously consider the ramifications between AS and FA to help sway the contents of the legislation? Probably FA chance of that but you never know.

I do think that the timing of this news is exactly as jamesbrown and others have said. It is a warmer for what is to come in the Autumn Statement. Going to be an interesting six months.

Contreras
8th November 2015, 23:28
So, for contracts > 1 month, the choice is:


client hires you as employee, taxed as PAYE, plus employment rights.
client hires you as FLC, taxed as PAYE (probably), no employment rights.

Either way IR35 is history.

It's what we've been asking for, right?

ShandyDrinker
9th November 2015, 07:47
So, for contracts > 1 month, the choice is:


client hires you as employee, taxed as PAYE, plus employment rights.
client hires you as FLC, taxed as PAYE (probably), no employment rights.
client hires you as employee, taxed as PAYE as if under IR35, no employment rights.

Either way IR35 is history.

It's what we've been asking for, right?

There was too little information to determine if either of the above is the case although I've added what I interpreted the article to mean.

I cannot see large corporates accepting the first item in your list. There will be plenty of lobbying to make sure that doesn't happen.

It's all pure speculation until the AS.

MrMarkyMark
9th November 2015, 08:23
That Guardian article is so badly written, its untrue.
It was, also, interesting that the comments weren't activated on it :eyes.

It seems like our chancellor is busy trying to grab as much as he can from, almost, everyone, not just contractors.
As others have said, we will have to wait and see what is said in the Autumn statement.
There is a lot of speculation, but I think they will find it difficult to apply everything, as they would like, as I believe it would cause too many issues for business.

I don't know where this will land, but, there seems to be a lot of fatalists on here, who seems to think the game is over, already.
I'm not saying things won't be tightened up, but, personally, I think, its far from game over.

gisajob
9th November 2015, 08:51
Could this be their opening 'offer'? I've thought for a while now that the only way to definitively resolve this is to draw an arbitrary line in the sand and say "This side you're fine for T&S, IR35 etc and beyond you're inside IR35" - I know it's simplistic and arbitrary but at least it would be a defined point that everyone could work with. It would work well for some, less well for others. There certainly would be less chance of finding loopholes to get around it I would think?

Anyway, up until Friday I was hoping that the best we could hope for would be 24mths (as per T&S as it currently stands) but that I would accept it being set at 1 year (if the trade off was getting rid of all the other uncertainty). Now after reading this article I think they've set their stall out and this is their opening gambit to eventually be negotiated upwards to (hopefully) 1 year but maybe somewhere in between? 3mths? 6mths?

MrMarkyMark
9th November 2015, 09:18
"This side you're fine for T&S, IR35 etc and beyond you're inside IR35"

They set this sort of limit in Australia, 6 months I believe.
Now business's are complaining as projects are being left in the lurch, as people always depart after 6 months.

People may consider a time limitation fine, however, it has to be appreciated, that some times you can be engaged on a big programme of work, that can run in years, rather than months.

WordIsBond
9th November 2015, 09:49
I don't for a minute believe this comes in. Business is not going to want to put every temporary resource they access on payroll.

But even though I can run multiple projects and some are less than a month, there's no way all of them are. And guess what? I'm independent, I'm running a business, and I'm NOT going on some company's payroll just because Gideon wants to collect tax. I offer a service to other companies but I am not their employee.

It just means I'll stop making my services available to UK companies. And if he starts messing around with trying to find a way to do the equivalent with my foreign clients, I'll leave. Thanks to a very good marital choice, I not only have a great marriage, I've got options to move overseas, too. :D

MrMarkyMark
9th November 2015, 09:53
Thanks to a very good marital choice, I not only have a great marriage, I've got options to move overseas, too. :D

So have I and its a hell of a lot hotter than here :smokin

vetran
9th November 2015, 09:58
In IR35 they made the tax the workers problem, we all complained that it should be the clients problem otherwise they would bypass it / ignore it.

Now they are going to make it the clients problem in the most ham fisted way possible...

There are lots of ways to solve this problem but they pick the worst way.

VectraMan
9th November 2015, 10:01
I don't for a minute believe this comes in. Business is not going to want to put every temporary resource they access on payroll.

Apart from anything else it would put umbrella companies out of business even though people who work through umbrellas aren't avoiding any tax, plus an end to "agency workers".

They just need to do IR35 properly. Shouldn't be hard.

NotAllThere
9th November 2015, 10:13
In IR35 they made the tax the workers problem, we all complained that it should be the clients problem otherwise they would bypass it / ignore it.

Now they are going to make it the clients problem in the most ham fisted way possible...

There are lots of ways to solve this problem but they pick the worst way.

What problem? They could have just left things as they were. Far cheaper all round.

vetran
9th November 2015, 10:23
What problem? They could have just left things as they were. Far cheaper all round.

They saw the use of Limited to avoid tax by employers for people that should be employees(something that was most definitely happening) as wrong so made it the Employees problems this broke the contractor model but did very little for the showbiz & senior civil servants that were performing the worst abuse.

Now they are trying to do it the other way and make anything that walks like a duck go quack. This is a bit of a bummer if you are a pigeon.

Other tax authorities have made better attempts.

I have no objection to a growing small businesses paying less tax if they start providing employment.

Darkling
9th November 2015, 10:24
Apart from anything else it would put umbrella companies out of business even though people who work through umbrellas aren't avoiding any tax, plus an end to "agency workers".

Both the Guardian and Daily Mail articles are specifically about Personal Service Companies - let's not jump to conclusions yet.

vetran
9th November 2015, 10:30
Both the Guardian and Daily Mail articles are specifically about Personal Service Companies - let's not jump to conclusions yet.

As there is no legal definition of a "Personal Service Company" I would suggest that jumping to conclusions is the only way to interpret these statements.

LisaContractorUmbrella
9th November 2015, 10:39
Apart from anything else it would put umbrella companies out of business even though people who work through umbrellas aren't avoiding any tax, plus an end to "agency workers".

They just need to do IR35 properly. Shouldn't be hard.

All depends how it's all worded - if it's just that workers have to be paid through PAYE brollies will be OK - if it's that they have to be on client's payroll we're stuffed :frown Could be wishful thinking on my part but I can't see HMG upsetting the business world by forcing them to take people onto their payroll when they only want them for a couple of months - especially as shedloads of contractors/freelancers work in the Public Sector. If they get rid of T&S umbrella companies will basically be tax collectors for HMRC - everything monitorable through RTI and agency reporting - we'd basically be doing their job for them.

_V_
9th November 2015, 11:04
Look, lets face it, the govt needs the cash, so roll over and pay it all up for good causes. Those in the public sector are living in poverty.

http://i.dailymail.co.uk/i/pix/2015/11/08/22/2E40424B00000578-0-image-a-10_1447021046944.jpg

BoredBloke
9th November 2015, 11:10
If this gets put through then you'll see a huge increase in FTC contracts. You too can earn £35k pro rata for 6 months work (£17.5k), rather than the £50k you might have got for it! But in that 6 months you might be given 2 weeks paid holiday so that's all good then!

I think you'll also see a rise in body shops as agencies move to supplying staff through their own brolly - its a win win for them as they can charge the normal fees for recruitment and then a management and payroll fee for the brolly. I think Hyphen already have this employed contractor model thing that used to appear on Jobserve. These will just act like any of the big consultancies supplying their staff to other employers.

The bog standard contractor supplying their skills to the end client via and agency will be long gone. The whole 1 month thing is rubbish. No end client is going to risk having to pick up the contractors employers NI - they will just employ people using the safest route for them. Wasn't the reason we have to use limited companies in the first place was to prevent agencies being stung for our taxes, so they stopped us from being classed as self employed?

If there are 100,000 limited company contractors working in this way, and each paid their accountant £1000 a year, that's £100,000,000 lost to the overall economy!

VectraMan
9th November 2015, 11:18
If there are 100,000 limited company contractors working in this way, and each paid their accountant £1000 a year, that's £100,000,000 lost to the overall economy!

Or to put it another way, £100,000,000 saved.

LondonManc
9th November 2015, 11:19
Did anyone see this bit in the linked article?

Awesome. I can take a couple of really crappy low cost, low involvement deals locally to do a couple of hours a week for people and I'm exempt. All hail the Fail!!

Danglekt
9th November 2015, 11:24
missed this last week - ouch!

Few thoughts in terms of the future direction that doesn't involve us all throwing in the towel:

Umbrella via PAYE would still work for some people - as it ticks the PAYE box, leaves the day rate as it is (increases it?....hmmm maybe not!) and is still better than Perm salary

Multiple clients - couple of part time gigs, but depends on the criteria and assume it will be a high bar

Form a consultancy with a few other contracts - risky, and a headache but possible

Hopefully the CBI will put some reasonable views across and a compromise (that is probably pre-prepared) will be come to

BlueSharp
9th November 2015, 11:26
Quote from the article:

The government acknowledges that a small number of professionals will still legitimately use personal service companies. Some IT workers might work for a company for a short period or they might work for multiple companies at the same time. In that case they would not be seen as an employee. Builders doing one job on a private house would be exempt.

But there are understood to be examples of professionals such as lawyers working for one company for a short period of two months. Ministers believe that in these circumstances they should be counted as employees and should pay income tax.

Could IT be exempt from the new rules?

VectraMan
9th November 2015, 11:33
Multiple clients - couple of part time gigs, but depends on the criteria and assume it will be a high bar

Form a consultancy with a few other contracts - risky, and a headache but possible

Seems to me there's a good argument for saying that anyone genuinely splitting their time between multiple clients or grouping together to form a consultancy and selling the service as a whole genuinely is being entrepreneurial and diserves the tax break. 99% of us don't do that and probably wouldn't.

MrMarkyMark
9th November 2015, 11:33
Could IT be exempt from the new rules?

Errr, not in general, no.

Otherwise they would have stated:-
IT contractors will be exempt from the legislation.

d000hg
9th November 2015, 11:34
"A government source said: “This is about fairness in the tax system. It is just not fair to have people in the same company doing the same jobs paying different levels of tax."That's reasonable; but we're not doing the same job are we?


What about the NI issues? Would the client/employer now have to pay NI on contractors? If so that's going to cost companies unless rates get depressed accordingly.

I wouldn't mind too much if my gross profit is taxed exactly the same as if it were a salary - no employer's NI - if I can still charge a premium as a contractor. Well... I mind but it's hard to justify ;)

VectraMan
9th November 2015, 11:39
That's reasonable; but we're not doing the same job are we?

Yes.


What about the NI issues? Would the client/employer now have to pay NI on contractors? If so that's going to cost companies unless rates get depressed accordingly.

I wouldn't mind too much if my gross profit is taxed exactly the same as if it were a salary - no employer's NI - if I can still charge a premium as a contractor. Well... I mind but it's hard to justify ;)

They're not going to clamp down on tax avoidance and still allow some tax avoidance in the form of not paying employer's NI. Somebody is going to have to pay it. It just means your rate is gross of employer's NI, in exactly the same way as it is if you're inside IR35.

d000hg
9th November 2015, 11:45
If you're paying employer's NI and a permie isn't, you're not paying the same tax rate for the same job. So it would be 'preferable' if the 'employer' pays their part if we have to go this way, in terms of transparency.

If it's going to be terrible it might at least be terrible in a way that means we don't have to pay accountants any more ;)

jamesbrown
9th November 2015, 11:52
That's reasonable; but we're not doing the same job are we?


What about the NI issues? Would the client/employer now have to pay NI on contractors? If so that's going to cost companies unless rates get depressed accordingly.

I wouldn't mind too much if my gross profit is taxed exactly the same as if it were a salary - no employer's NI - if I can still charge a premium as a contractor. Well... I mind but it's hard to justify ;)

In the spirit of extrapolation, my reading is the same as this. In other words, they've realised that the difference between employment for tax purposes and ordinary employment is too narrow a path to thread in the context of SDC, so they've accepted that their upfront aim (stated in the IR35 discussion document) of increasing compliance for tax purposes without increasing the number of employees won't work. So, yes, IMHO they are talking about full employment, with all associated benefits, not employment for tax purposes alone. It will be a tough sell to big business (although, not all big business :wink), and this explains the nature and timing of the articles.

On your second point, different people may find different things acceptable, and I can understand your POV. Personally, I would not find this acceptable because I need to operate with the flexibility of a business, not a series of simultaneous or consecutive employment/PAYE arrangements. Incidentally, the option you describe of PAYE with employee's NI only is already available through Direct PAYE if your clients don't have a UK physical/tax presence.

TestMangler
9th November 2015, 11:52
Quote from the article:

The government acknowledges that a small number of professionals will still legitimately use personal service companies. Some IT workers might work for a company for a short period or they might work for multiple companies at the same time. In that case they would not be seen as an employee. Builders doing one job on a private house would be exempt.

But there are understood to be examples of professionals such as lawyers working for one company for a short period of two months. Ministers believe that in these circumstances they should be counted as employees and should pay income tax.

Could IT be exempt from the new rules?

:laugh There's optimism for you

VectraMan
9th November 2015, 11:56
If you're paying employer's NI and a permie isn't, you're not paying the same tax rate for the same job. So it would be 'preferable' if the 'employer' pays their part if we have to go this way, in terms of transparency.

Not this old chestnut. The employee is paying employer's NI, they just don't think they are because their salary is quoted after employer's NI. If the client has to pay employer's NI then all that will mean is they either quote your rate before as happens now with umbrellas and inside IR35 people, or they reduce your rate to account for it. If the cost to the employer is the same, the amount of tax to the exchequer and the amount you take home are exactly the same in both cases. So everybody pays the same amount of tax.

Obviously it would be better if the employer just paid it, but that amounts to a rate rise with no change in the service you're providing.

Danglekt
9th November 2015, 12:10
That's reasonable; but we're not doing the same job are we?





Yes.




Eh?

So you are stating every contractor is doing the same job as a permie? :laugh:laugh:laugh

NotAllThere
9th November 2015, 12:18
They saw the use of Limited to avoid tax by employers for people that should be employees...That was the excuse they gave and the one you, somewhat naively, have believed. IR35 was never about employer abuse. It was about extracting more tax money from contractors.

VectraMan
9th November 2015, 12:21
Eh?

So you are stating every contractor is doing the same job as a permie? :laugh:laugh:laugh

In what way are you not? In my previous permie job I worked in exactly the same way as the contractors. Now I'm a contractor I continue to work in exactly the same way.

Which is not to say every contractor is working in the same way as every permie, but any employee in any kind of senior role is probably not doing anything differently.

d000hg
9th November 2015, 12:26
Not this old chestnut. The employee is paying employer's NI, they just don't think they are because their salary is quoted after employer's NI. If the client has to pay employer's NI then all that will mean is they either quote your rate before as happens now with umbrellas and inside IR35 people, or they reduce your rate to account for it. If the cost to the employer is the same, the amount of tax to the exchequer and the amount you take home are exactly the same in both cases. So everybody pays the same amount of tax.

Obviously it would be better if the employer just paid it, but that amounts to a rate rise with no change in the service you're providing.If your salary is quoted after employer's NI then by definition you're not paying it. You are paying employee NI and PAYE because they come out of your paycheck.

Granted, it overall works out the same but it's not the same thing. For instance if employee NI rates change, your take-home will change. If they change employer NI rates, your salary and take-home will remain the same as the employer either coughs up the extra or saves some cash.

jamesbrown
9th November 2015, 12:31
Granted, it overall works out the same but it's not the same thing. For instance if employee NI rates change, your take-home will change. If they change employer NI rates, your salary and take-home will remain the same as the employer either coughs up the extra or saves some cash.

Nah, it doesn't really work like that. The difference is the timeframe over which the impacts are noticed. Anyone familiar with budgeting will tell you that the wage bill is treated as an overall bill; the component that goes to the employee is irrelevant on its own. If part of the wage bill goes up, there are a few options: one is to raise prices, another is to accept a reduced profit, and another is to reduce the wage bill elsewhere (e.g. reduced benefits, reduced path of future increments/increases, hiring freeze, promotion freeze etc.). Anyone that focuses on the wage bill from the employee angle alone is missing the bigger picture.

LondonManc
9th November 2015, 12:39
There are other obvious impacts:

Gideon kills off "standard" contracting - 6 month gigs through agencies; this leaves thousands of contractors without work and potentially claiming JSA/moving perm and paying less tax.
TCS/Crapita bring bobs in to replace and less tax paid over here anyway.
Better contractors going perm, forcing bobbins perms out of jobs and claiming JSA.

There isn't a single electable party out there at the moment. Corbyn would kill the banks off and the Tories would kill the contract jobs off.

MrWebDev
9th November 2015, 12:42
That Guardian article is so badly written, its untrue.
It was, also, interesting that the comments weren't activated on it :eyes.

It was clear the writer didn't have much understanding of the business model he was talking about. It also seemed to be very one sided, without a single comment from either anyone in Government, HMRC, IPSE or a contractor.

However, I do feel there is some substance to both the Guardian and DM article, as the content seems to be similar, which I feel points to some info being leaked out from a Government department such as the Treasury or possibly HMRC. Both articles use the 90% figure and they also both contain the £400m.

BlasterBates
9th November 2015, 12:51
Nah, it doesn't really work like that. The difference is the timeframe over which the impacts are noticed. Anyone familiar with budgeting will tell you that the wage bill is treated as an overall bill; the component that goes to the employee is irrelevant on its own. If part of the wage bill goes up, there are a few options: one is to raise prices, another is to accept a reduced profit, and another is to reduce the wage bill elsewhere (e.g. reduced benefits, reduced path of future increments/increases, hiring freeze, promotion freeze etc.). Anyone that focuses on the wage bill from the employee angle alone is missing the bigger picture.

I agree with this, essentially the employee cost (wage plus employers NI) is driven by the market, if you were to remove the employer's NI and shove it on the employee, there would be more scope to raise salaries and with the "hoo ha" of employees being lumbered with extra costs the salaries would be put up to compensate and the employee would be earning what he earnt before. It would be a zero sum outcome.

MrMarkyMark
9th November 2015, 12:53
In what way are you not? In my previous permie job I worked in exactly the same way as the contractors. Now I'm a contractor I continue to work in exactly the same way.

Which is not to say every contractor is working in the same way as every permie, but any employee in any kind of senior role is probably not doing anything differently.

Generic stuff, I would probably agree with you in most cases.

Specialist stuff I wouldn't.
I haven't come across one permy, apart from when I worked with a Principal Consultant, for the product I specialise in, who has as much knowledge as me.
Even then, that Principal wouldn't have the broadness of knowledge across the product that I have.

As well as post drivel, on here, I also contribute to a, very active, technical forum on the internet with 77859 registered users, at last count.
It would be interesting for some business leads to see, how our offshore counterparts run their development activities, purely, by posting questions on an internet forum :laugh.

This is why all this personally rankles, I have no D&C in my work, I provide a specialist service, usually advising them what they need to do.
That's a lot different to a generic Data Analyst / Excel / Access type of jockey role.
Still, there's a lot of demand in the Netherlands, obviously, taxes are high, but, at least you can see evidence of them being spent "correctly".

IR35 Avoider
9th November 2015, 12:57
So if I've understood this correctly, the suggestion is that if a given individual spends more than one month with a client, all subsequent pay in respect of time worked for that client will have to be via PAYE.

Just want to speculate on how this would work.

I guess it will be a revision to IR35, with the definition of "caught" changing to include any money generated from each individual - client relationship, other than the first month's worth.

This would have no effect on clients or agencies. PSCs can continue to exist, but nearly all income will now be caught. PSCs will continue to be a better option than umbrellas as:-
1. It actually costs less to run a PSC that to funnel your income through an umbrella (my comparison last done in 2010 was Parasol versus Crunch Accounting, doubt anything has changed.)
2. A PSC allows you to take salary evenly across the tax year, the umbrella model of paying out salary as it comes in can result in higher National Insurance bills for the same overall salary.
3. If pensions don't get abolished, it's easier to fund the scheme of your choice via a PSC.
4. You can make a profit from the flat rate VAT scheme that more than pays your PSC running costs.

vetran
9th November 2015, 12:59
That was the excuse they gave and the one you, somewhat naively, have believed. IR35 was never about employer abuse. It was about extracting more tax money from contractors.

It was one of the publicly quoted reasons for IR35, if it was a lie then it should be exposed as such.

There is a lot of abuse by employers at the bottom end of the pay scale. I really don't care if a BBC fat cat is in false Limited company status so long as he pays the same amount of tax roughly.

I do care if some poor van driver is doing an 80 hour week for below minimum wage at the behest of a large internet store or pizza parlour.

VectraMan
9th November 2015, 13:17
If your salary is quoted after employer's NI then by definition you're not paying it. You are paying employee NI and PAYE because they come out of your paycheck.

By that logic if a job ad quoted the take home pay then you wouldn't be paying any tax. Huzzah!


Granted, it overall works out the same but it's not the same thing. For instance if employee NI rates change, your take-home will change. If they change employer NI rates, your salary and take-home will remain the same as the employer either coughs up the extra or saves some cash.

You have a point, but that's likely only the case with existing permies. For contractors they're more likely to reduce your rate come renwal time if not before to compensate, and the amount other clients will pay is also reduced. So you end up paying the increase at the end of the day.

VectraMan
9th November 2015, 13:21
Generic stuff, I would probably agree with you in most cases.

Specialist stuff I wouldn't.
I haven't come across one permy, apart from when I worked with a Principal Consultant, for the product I specialise in, who has as much knowledge as me.
Even then, that Principal wouldn't have the broadness of knowledge across the product that I have.

As well as post drivel, on here, I also contribute to a, very active, technical forum on the internet with 77859 registered users, at last count.
It would be interesting for some business leads to see, how our offshore counterparts run their development activities, purely, by posting questions on an internet forum :laugh.


You're an expert because you're an expert, not because you're a contractor. You could take a permie role with the same client and continue to do exactly the same thing. Or alternatively they could find another you, someone with exactly the same skill and hire them as a permie and you'd now work in exactly the same way and doing exactly the same job as a permie.

MrMarkyMark
9th November 2015, 13:29
You're an expert because you're an expert, not because you're a contractor. You could take a permie role with the same client and continue to do exactly the same thing. Or alternatively they could find another you, someone with exactly the same skill and hire them as a permie and you'd now work in exactly the same way and doing exactly the same job as a permie.

You have missed the point, I thought I had been quite clear :suicide:

Client Cos never have the sort of permanent role in what I do, that's the point.
They tend to segregate the roles, into little areas, rather than someone who can go across the whole piece.

You would need multiple people, even from the software consultancy mentioned, to provide what I do.
What you are suggesting would mean I have to de-skill myself, basically, so I could fit into a perm engagement model.

I would suggest that you have more to be concerned about, as you can see little difference in your working practices, duties, or whatever you want to call them, than a BOS perm.

jamesbrown
9th November 2015, 13:31
You're an expert because you're an expert, not because you're a contractor. You could take a permie role with the same client and continue to do exactly the same thing. Or alternatively they could find another you, someone with exactly the same skill and hire them as a permie and you'd now work in exactly the same way and doing exactly the same job as a permie.

You're missing the point. For many of us, the type or degree of expertise we provide is not integral to the business model of our clients so while, in principle, the contractual details don't matter, their business models would be seriously undermined if they had to employ all of their specialists (with all the associated compliance and HR necessary to achieve that). The principle is really no different than subcontracting more generally. Most businesses rely on subcontracting, to a greater or lesser degree, in order to focus on what makes them unique and profitable.

LondonManc
9th November 2015, 13:41
You're an expert because you're an expert, not because you're a contractor. You could take a permie role with the same client and continue to do exactly the same thing. Or alternatively they could find another you, someone with exactly the same skill and hire them as a permie and you'd now work in exactly the same way and doing exactly the same job as a permie.

Looks like you've missed the main purpose of contracting from a "forget the NICs dodging by employers side". Specialists tend to be more project-based engagements.

If I was building a BI platform from scratch, I'd want a data warehouse architect and one or more reporting specialists together with a skilled PM with DW implementation experience. I'd want a separate team of perms for the support and enhancement of the BAU situation once the DW and the reporting layer have been delivered by the experts. This is for several reasons:

The specialists would cost too much to be perms, probably wouldn't want to be perms and I wouldn't need the PM once the project delivery is wrapped up. Making the specialist perms redundant wouldn't be cheap either. I'd need an Information Delivery Manager at that point (perm role) who would manage the BAU/change; I'd need more junior staff to ensure that things keep ticking over and a more seasoned perm developer to have one eye on R&D. I'd also keep the contact details of those who have been on the project and potentially call on them again.

tomtomagain
9th November 2015, 13:42
You're an expert because you're an expert, not because you're a contractor. You could take a permie role with the same client and continue to do exactly the same thing. Or alternatively they could find another you, someone with exactly the same skill and hire them as a permie and you'd now work in exactly the same way and doing exactly the same job as a permie.

But a major point you are missing is that most organisations do not want to have all the skills "in-house" because they do not need those skills all the time.

For example. Say you are running a small IT department in a medium sized company. You might have 5 technical people on staff.

One year you identify an opportunity to build some bespoke software for the company. You secure the budget, hire in a team of contractors ( PM, developers, UI expert, infrastructure expert etc etc ) and spend 9 months doing what you need to do.

After the 9 months ..... you no longer need those people. Not because you don't like, want or value them ... but because you simply don't have the budget, resources AND the challenging technical work that they like doing to sustain them indefinitely.

So you need to let them go.

So in the new world what happens? You have to hire them all as permies? And then make them redundant? That's crazy.

An unintended consequence is that it will make permanent employment less secure not more secure. Because it would be discriminatory to simply put the "New Hires" through the redundancy process without actually considering all the "Old Permies".

Jog On
9th November 2015, 14:00
What's to stop Jonnie contractor taking a 6 month gig, taking 2 weeks paid holiday and going off sick for another 2?

Will they have clauses in the new permanent contracts against this? How will that work?

Danglekt
9th November 2015, 14:21
You're an expert because you're an expert, not because you're a contractor. You could take a permie role with the same client and continue to do exactly the same thing. Or alternatively they could find another you, someone with exactly the same skill and hire them as a permie and you'd now work in exactly the same way and doing exactly the same job as a permie.

Sorry to add another reply to this comment, but you are also forgetting that most senior roles have between 3 months and 6 months notice period, add in the approx 1 month recruitment period and 1 month "getting up to speed" and thats 5-8 months of business benefit.... Having a senior bod in a drawer in the shape of a contractor is a serious point of difference that adds big value to clients

VectraMan
9th November 2015, 14:45
But a major point you are missing is that most organisations do not want to have all the skills "in-house" because they do not need those skills all the time.

Bah! I wasn't suggesting for a minute that there isn't a raison d'etre for contractors, just that once you turn up you're working in the same way as a similar permie. The reasons why a client might hire you on a temporary basis rather than a permanent one doesn't change that.

Danglekt
9th November 2015, 14:49
Bah! I wasn't suggesting for a minute that there isn't a raison d'etre for contractors, just that once you turn up you're working in the same way as a similar permie. The reasons why a client might hire you on a temporary basis rather than a permanent one doesn't change that.


And by that logic I suppose I should employ a plumber 40 hours a week on the off chance I have a leak.... :D

There isn't a single role that logic doesn't apply to!

MrMarkyMark
9th November 2015, 14:54
just that once you turn up you're working in the same way as a similar permie.

As I said, there are some of us where a similar perm role does, simply, not exist, even within consultancies.
That's why the term SME exists in some areas and most, if not all, perms will not be it.

VectraMan
9th November 2015, 15:02
And by that logic I suppose I should employ a plumber 40 hours a week on the off chance I have a leak.... :D

There isn't a single role that logic doesn't apply to!

:confused:

So you go to a client for an hour as a one-off job with your own tools and fix a problem? Is that the way most contractors work?

d000hg
9th November 2015, 15:03
By that logic if a job ad quoted the take home pay then you wouldn't be paying any tax. Huzzah!We're veering off-topic but the job ad couldn't quote take-home pay without knowing your circumstances - other income streams, etc. Unless they actually did abolish income tax and take more CT to compensate... which would be entirely feasible albeit pretty pointless.

BlasterBates
9th November 2015, 15:14
This has the makings of a record thread....:popcorn:

WordIsBond
9th November 2015, 15:17
:confused:

So you go to a client for an hour as a one-off job with your own tools and fix a problem? Is that the way most contractors work?
No. But I have one client who pays me a retainer so they can pick up the phone and talk to me for up to 5 hours a month, because they have no one like me.

And two of us did a job for them this summer that took seven weeks. They have no one like either of us.

And I have another client that gave me a three week job last month, because they don't have anyone like me, either.

And so on. Hardly anyone has anyone like me, but hardly anyone needs anyone like me for more than isolated jobs. But some of those isolated jobs are quite a bit bigger than a month....

GB9
9th November 2015, 15:24
How much would HMRC lose in VAT if we all got put on payroll?

I can't see a month being viable. Short of sticking up a few Web pages you would achieve nothing. It took me 6 months at one client just to document the issues and propose a solution.

And at current client I too don't do the same role as any permie. Thank God.

MrMarkyMark
9th November 2015, 15:27
So you go to a client for an hour as a one-off job with your own tools and fix a problem? Is that the way most contractors work?

You just don't get that we, contractors, are not all the same.
You are also not listening, as there are quite a few others, in a similar situation, as myself, on here, but you choose to ignore what they say.
A permy does not offer a specialist consultancy type service across a particular discipline.

That is the difference.

I should know, I have been doing this exact specialism for nearly 16 years.
In addition, due to demand, my rate has increased over this time, rather than decreased :smokin

Have you thought about switching career, I hear HMRC have a few opportunities?

:rolleyes:

MicrosoftBob
9th November 2015, 15:28
Of course all contractors taken on this way would gain basic employment rights, so no more, sorry we don't need you today. Or we need you to take three weeks off at Christmas. The other perennial favorite 10% pay cut. There would of course be sick pay, holidays, warnings, discrimination law suits and all the fun that goes with this.

You can see were this is going ...an IT Trade union - Bastards United - So any time a future member is treated badly by a client, especially an outsourcer they can all go out on Strike.

If you squint at him he looks exactly like Gordon Brown.

What about Contractors League of Information Technologists, that would be a catchy name for a union

All we would need is a commander to lead it

MrMarkyMark
9th November 2015, 15:29
All we would need is a commander to lead it

I nominate Suity :suicide:

LondonManc
9th November 2015, 15:43
I nominate Suity :suicide:

He'd never find it. We're all doooooomed!

BoredBloke
9th November 2015, 16:01
Of course all contractors taken on this way would gain basic employment rights, so no more, sorry we don't need you today. Or we need you to take three weeks off at Christmas. The other perennial favorite 10% pay cut. There would of course be sick pay, holidays, warnings, discrimination law suits and all the fun that goes with this.

You can see were this is going ...an IT Trade union - Bastards United - So any time a future member is treated badly by a client, especially an outsourcer they can all go out on Strike.

If you squint at him he looks exactly like Gordon Brown.

I wouldn't bank on that. I'd say we'd end up with the worst of both worlds. We'd be paid and taxed like a permie but have to act like a self employed contractor in all other respects. Caught by IR35 means you can be taxed as an employee but it doesn't infer any employee employment type benefits.

vetran
9th November 2015, 16:04
He'd never find it. We're all doooooomed!

we could sack him after a month looking we would be regarded as a long contract.

vwdan
9th November 2015, 16:16
You're an expert because you're an expert, not because you're a contractor. You could take a permie role with the same client and continue to do exactly the same thing. Or alternatively they could find another you, someone with exactly the same skill and hire them as a permie and you'd now work in exactly the same way and doing exactly the same job as a permie.

This is properly short sighted. There are basically only two engagement methods for my type of consultancy:

1. Direct to client - almost always to do a specific project in a technology where they don't have the required in-house skills. They're never going to pay someone at my level to sit there all year round to watch the lights flash - they want me to rock up, design it, build it and get out. At best they'll have someone with cursory day to day skills - at worst it just gets dumped on whichever poor soul didn't keep quiet. Sometimes they keep in touch, sometimes they don't.

2. Into a consultancy - normally to supplement a team that is overstretched, or don't quite have the skills. They might employ someone like me - but only one, or two full time and only if they can justify it.

The second one is particularly close to my heart right now as I've just taken a permie job with a consultancy and my utilisation rate is absolutely on the floor at the minute. Right now they're just not getting the projects in - it's going to have to pick up or they won't be able to justify me and that'll be end of that. Not a problem in principal because we had a grown up discussion about - but it'll become a problem if they kill contracting like they're trying to do.

I know I'm mostly preaching to the choir but this entire thing really upsets me, because personally, I can hand on heart say I work almost exactly the same whether as a 'self employed' contractor, or as a permie consultant. Travel is similar, expenses are similar, the projects are similar - but while I'm doing all these things through someone else's company they're all legitimate business, but when I do the same things through my own 'PSC' I'm a tax dodging, piss taking joker.

VectraMan
9th November 2015, 16:20
You just don't get that we, contractors, are not all the same.

Exactly. My point was "you're an expert because you're an expert, not because you're a contractor". There are contractors that do nothing like you do; perhaps they man a support phone line 9-5 doing exactly what they're told to do. They should probably be inside IR35, but they're still contractors. The term "contractor" doesn't define a way of working that's different to the way a permie works. You might be different, but the majority probably are not. My experience is being part of software teams, both as a permie and as a contractor, and there's no difference day to day. Any decent team has people with different skills so you don't have to be a contractor to be doing something that nobody else can do.

If one of your clients decided they had enough work to warrant keeping you around permanently and offered you a huge enough salary to make it worth it, you could take it. You could take it and carry on doing exactly the same job in the same way as before except you're now an employee.

AtW
9th November 2015, 16:21
As there is no legal definition of a "Personal Service Company" I would suggest that jumping to conclusions is the only way to interpret these statements.

It's the checkbox on your tax return. Anybody that checked it is dooooomed...

vetran
9th November 2015, 16:25
It's the checkbox on your tax return. Anybody that checked it is dooooomed...

I know how they are using it but frankly it makes PPI look legal.

MrMarkyMark
9th November 2015, 16:29
Exactly. My point was "you're an expert because you're an expert, not because you're a contractor". There are contractors that do nothing like you do; perhaps they man a support phone line 9-5 doing exactly what they're told to do. They should probably be inside IR35, but they're still contractors. The term "contractor" doesn't define a way of working that's different to the way a permie works. You might be different, but the majority probably are not. My experience is being part of software teams, both as a permie and as a contractor, and there's no difference day to day. Any decent team has people with different skills so you don't have to be a contractor to be doing something that nobody else can do.

You are getting there :tongue.
At least you are making a distinction now, you are more of a team player, rather than a lead player.
A true SME, also delivers valuable strategic advice to a business, rather than just going along with pre-determined tasks.
That's one of the reasons why I don't like to be lumped in with everyone else.


If one of your clients decided they had enough work to warrant keeping you around permanently and offered you a huge enough salary to make it worth it, you could take it. You could take it and carry on doing exactly the same job in the same way as before except you're now an employee.

I have been offered a huge salary, as a BI Practitioner, to set up a consultancy. I have mentioned the figure on here, before, so won't dick size again.
However, with all the extra evening hours required to smooze clients etc. I decided to stay with what I was doing.

MarkT
9th November 2015, 16:39
The thing is most newspapers, Guardian and Mail very much included, only know how this works for their chums in the media, and I do wonder if this is what the government are actually going after, the likes of Fiona Bruce etc. The Guardian article is very poorly worded and seems to be talking about the T&S stuff. It's likely that their source is theDaily Mail article itself!

We don't know the detail, but the idea that contracting is suddenly made almost impossible seems very far fetched. Big business will not wear this at all, they want and need a flexible workforce, beyond Capita, KPMG et al and will in all likelihood get what they want.

My main concern is that the T&S stuff forms part of the consultation document, that sounds real, that sounds scary and that is going to happen in some form or another, very soon. That'll outlaw long distance contracting, meaning people will be moving from the North to the South to work, exactly what George doesn't want (Northern powerhouse and all). This means that the govt may be positioning themselves Sir Humphrey style:

They currently get Steak for for £5 but we can't afford to give them that, so we offer them Chicken for the same price, when they refuse, sigh and say that we could offer them rat at a higher price than steak. When they calm down at the idea of rat, offer them chicken again.

xoggoth
9th November 2015, 16:48
Doesn't affect me as I am retired but this is really p*ing me off. Hopefully there is no basis for it.

Can't see the relevance of what the job is or what the level of control is. It just illustrates the stupidity of government that they see those as the important points.

The two crucial factors are a) Because a contractor is there on a temporary basis, he is likely to incur extra costs that a permanent employee does not because he cannot relocate and b) Unlike a builder (who are absurdly being considered for exemption) most highly skilled contractors do not find work locally and have to travel long distances or stay away. If they are at a place for anything under six months they will not be able to rent a flat and will need to pay large costs for hotels/B&Bs. It is crazy not to take these realities into account.

d000hg
9th November 2015, 17:04
The uncertainty of work is not a reason to pay less tax though - it's a reason to pay the same level of tax but charge a much higher rate.

Regarding T&S: that's valid and the proposed changes in this area seem daft. BUT, maybe it will simply mean that it becomes the norm for clients - or maybe agents(?) - to pay this rather than for the contractor baking NI, travel, accommodation into their rate? It happens sometimes already, and if they want to make us more like employees then maybe this will be a natural consequence... it seems that this would be more palatable to clients than huge rate increases from contractors?

VectraMan
9th November 2015, 17:09
The two crucial factors are a) Because a contractor is there on a temporary basis, he is likely to incur extra costs that a permanent employee does not because he cannot relocate and b) Unlike a builder (who are absurdly being considered for exemption) most highly skilled contractors do not find work locally and have to travel long distances or stay away. If they are at a place for anything under six months they will not be able to rent a flat and will need to pay large costs for hotels/B&Bs. It is crazy not to take these realities into account.

At the risk of starting another argument: permies also commute, and can't necessarily easily relocate either. And no permanent job is permanent; it's only really as long as your notice period. I would say give everyone travel expenses for a certain time; maybe 2 years, maybe less, long enough that you can reasonably up sticks to get closer to work and be reasonably sure that it's going to last. Perhaps that encourages more people to consider work outside their area.

It won't happen of course.

Danglekt
9th November 2015, 17:11
The uncertainty of work is not a reason to pay less tax though - it's a reason to pay the same level of tax but charge a much higher rate.

Regarding T&S: that's valid and the proposed changes in this area seem daft. BUT, maybe it will simply mean that it becomes the norm for clients - or maybe agents(?) - to pay this rather than for the contractor baking NI, travel, accommodation into their rate? It happens sometimes already, and if they want to make us more like employees then maybe this will be a natural consequence... it seems that this would be more palatable to clients than huge rate increases from contractors?

It's a reason for us to be outside PAYE waiting for a rebate when we have been on the bench for half the year but been taxed whilst in work as if we will be in contract all year...

d000hg
9th November 2015, 17:19
It's a reason for us to be outside PAYE waiting for a rebate when we have been on the bench for half the year but been taxed whilst in work as if we will be in contract all year...Isn't paying tax on account (i.e. in advance) something that's fairly common for contractors already? It's not something I've ever run into.

I'm not sure this is a convincing reason against the whole scheme though. We're used to being in arrears for payments, you should be able to cope with that! It's one small annoyance but it shouldn't swing things either way.

xoggoth
9th November 2015, 17:39
I would say give everyone travel expenses for a certain time; maybe 2 years, maybe less, long enough that you can reasonably up sticks to get closer to work and be reasonably sure that it's going to last. Perhaps that encourages more people to consider work outside their area.

"Geographical immobility" is a problem, especially among the lower paid, so that sounds like a good idea. For that reason I agree it won't happen.

Danglekt
9th November 2015, 17:44
Isn't paying tax on account (i.e. in advance) something that's fairly common for contractors already? It's not something I've ever run into.

I'm not sure this is a convincing reason against the whole scheme though. We're used to being in arrears for payments, you should be able to cope with that! It's one small annoyance but it shouldn't swing things either way.

Well I have it in a separate business account, based on the relevant assumption - but when a contractor is on anything above a very small day rate they will exceed the 40% threshold very easily, so lets assume 1st April 2017 I'm on say....£250 a day - via PAYE that means they assume I will be paid that all year (as they will assume I get paid holiday), and tax me accordingly (£65k gross) - throwing it through a salary calc thats £20k of deductions BEFORE employer NI of £7.8k which I don't know if it will be taken at source or not, assuming they do... £28k of deductions that they will profile over the full year and therefore take £2333 off me every month.

Per month

Income of £5250
Deductions of £2333
Leaving me £2917.

If I am only in the gig for three months then on the bench the rest if the year...

I have £8751 in my pocket, but I've paid out £7k in deductions - the vast majority of which I am due back, but I won't have access to it until rebate time (which I always thought happened after the turn of year...but perhaps not)

I assume there is some way to ask for it back in advance? If there isn't it's highly unfair making people wait 9 months + for their own money back, and if there is then the dept better bulk up, cos they are going to get hit with a lot of claims.

Imagine bouncing on and off the bench, there will be refund requests, and PAYE income shuttling in and out all year.

My point is, PAYE and temporary workforce isn't a very good match!

MicrosoftBob
9th November 2015, 17:48
And if we end up on emergency tax codes, that's a whole lot of NI overpaid that you'll never get back

LondonManc
9th November 2015, 18:02
"Geographical immobility" is a problem, especially among the lower paid, so that sounds like a good idea. For that reason I agree it won't happen.

And discriminates against those with kids who are settled.

centurian
9th November 2015, 18:22
How much would HMRC lose in VAT if we all got put on payroll?

Net - Nothing - because surely all ClientCo's will be VAT registered, so will claim it back anyway.

There will be a few that can't claim it back - but this will be offset by no longer having so many contractors on the flat rate scheme, for which most contractors tend to make a small gain in gross receipts.

diseasex
9th November 2015, 18:54
Net - Nothing - because surely all ClientCo's will be VAT registered, so will claim it back anyway.

There will be a few that can't claim it back - but this will be offset by no longer having so many contractors on the flat rate scheme, for which most contractors tend to make a small gain in gross receipts.

what a bullshit news.

EternalOptimist
9th November 2015, 18:58
I just heard that they are introducing US 20's style prohibition. just for IT contractors though. Everyone else including IT permies will be exempt.



I don't think they want us to be contractors any more

Zero Liability
9th November 2015, 19:17
I just heard that they are introducing US 20's style prohibition. just for IT contractors though. Everyone else including IT permies will be exempt.



I don't think they want us to be contractors any more

We'll be featuring in Gideon's own amateur production of The Hunger Games.

MicrosoftBob
9th November 2015, 19:59
We'll be featuring in Gideon's own amateur production of The Hunger Games.

Nah that would mean some of us would live, surely wants to make IDS look like a fluffy bunny and his remit for IT contractors is Arbeit macht frei

diseasex
9th November 2015, 20:46
If they would implement stupid law like this (which sounds just stupid) I would simply register offshore and claim to be larger than I am or claim to be another another india bob company (which is allowed!) to which works is being outsourced. Or do contracts in norway or in dubai. Either way they wouldnt see a penny, and instead making 400m they would get -400m

Contreras
9th November 2015, 20:48
I don't for a minute believe this comes in. Business is not going to want to put every temporary resource they access on payroll.

They won't need to if offered an alternative - e.g. FLC.

d000hg
9th November 2015, 21:27
Well I have it in a separate business account, based on the relevant assumption - but when a contractor is on anything above a very small day rate they will exceed the 40% threshold very easily, so lets assume 1st April 2017 I'm on say....£250 a day - via PAYE that means they assume I will be paid that all year (as they will assume I get paid holiday), and tax me accordingly (£65k gross) - throwing it through a salary calc thats £20k of deductions BEFORE employer NI of £7.8k which I don't know if it will be taken at source or not, assuming they do... £28k of deductions that they will profile over the full year and therefore take £2333 off me every month.

Per month

Income of £5250
Deductions of £2333
Leaving me £2917.

If I am only in the gig for three months then on the bench the rest if the year...

I have £8751 in my pocket, but I've paid out £7k in deductions - the vast majority of which I am due back, but I won't have access to it until rebate time (which I always thought happened after the turn of year...but perhaps not)

I assume there is some way to ask for it back in advance? If there isn't it's highly unfair making people wait 9 months + for their own money back, and if there is then the dept better bulk up, cos they are going to get hit with a lot of claims.

Imagine bouncing on and off the bench, there will be refund requests, and PAYE income shuttling in and out all year.

My point is, PAYE and temporary workforce isn't a very good match!Well I don't agree they will assume you get paid holidays if you don't. But leaving that aside as not grossly affecting things, your example is not looking great :)

However, this also assumes we would have to work through PAYE rather than filling in a personal SATR. Same tax due, but deductions not taken directly from salary. But I've no idea what you have to do to work this way, I don't believe Johnny Permie can just opt out of PAYE on a whim for instance?

vetran
9th November 2015, 21:38
They would be foolish to allow people to opt out of paying monthly far too many would forget to pay. I suggest they create a PAYE lite that covers a contractors needs.

d000hg
9th November 2015, 21:40
They would be foolish to allow people to opt out of paying monthly far too many would forget to pay. I suggest they create a PAYE lite that covers a contractors needs.Do lots of contractors currently forget to pay CT/SATR (actually, maybe they do!)?

MicrosoftBob
9th November 2015, 21:45
If they would implement stupid law like this (which sounds just stupid) I would simply register offshore and claim to be larger than I am or claim to be another another india bob company (which is allowed!) to which works is being outsourced. Or do contracts in norway or in dubai. Either way they wouldnt see a penny, and instead making 400m they would get -400m

I wonder how close you could be offshore to ICT yourself, would the Isle Of Man do ?

EternalOptimist
9th November 2015, 21:59
If they would implement stupid law like this (which sounds just stupid) I would simply register offshore and claim to be larger than I am or claim to be another another india bob company (which is allowed!) to which works is being outsourced. Or do contracts in norway or in dubai. Either way they wouldnt see a penny, and instead making 400m they would get -400m

:suicide:

OMFG.

Look. It's been well established, for donkeys, that contractors become contractors not for the money, but to escape the office politics and unnecessary aggro.

you are suggesting a massive increase in aggro. I don't think this is a flier.

diseasex
9th November 2015, 22:08
:suicide:

OMFG.

Look. It's been well established, for donkeys, that contractors become contractors not for the money, but to escape the office politics and unnecessary aggro.

you are suggesting a massive increase in aggro. I don't think this is a flier.
Yep I'm saying guardian and daily mail are stupid and it's not going to happen

EternalOptimist
9th November 2015, 22:11
Yep I'm saying guardian and daily mail are stupid and it's not going to happen

in that case, your non-solution to a non-problem is just about ok

diseasex
9th November 2015, 22:16
in that case, your non-solution to a non-problem is just about ok

If my non-solution to this non-problem wouldn't work I'm sure we would find other yep-solutions that would work. In the end I consider myself a company and I intend to expand / hire and what not. So to hammer me with tax they would have to tax every other company in the uk
Just saying

EternalOptimist
9th November 2015, 22:22
If my non-solution to this non-problem wouldn't work I'm sure we would find other yep-solutions that would work. In the end I consider myself a company and I intend to expand / hire and what not. So to hammer me with tax they would have to tax every other company in the uk
Just saying

good luck to you. now stop whining

meridian
9th November 2015, 22:23
in that case, your non-solution to a non-problem is just about ok

It's not necessarily a non-solution for some of us. I'm a non-domicile anyway (technically, though I don't currently pay to be one and declare everything as a normal tax resident) so a more aggressive approach to tax minimisation will be looking attractive, depending on what the announcement contains.

GB9
9th November 2015, 23:27
Net - Nothing - because surely all ClientCo's will be VAT registered, so will claim it back anyway.

There will be a few that can't claim it back - but this will be offset by no longer having so many contractors on the flat rate scheme, for which most contractors tend to make a small gain in gross receipts.

The vast majority of banks cannot reclaim VAT, and as they are key users of contractors, that's a whole world of VAT going missing. And as VAT is chargeable on turnover regardless of profit.......

NotAllThere
10th November 2015, 06:52
...
Look. It's been well established, for donkeys, that contractors become contractors not for the money, but to escape the office politics and unnecessary aggro...Erm... I do it for the money (Though not for tax benefit, as I don't get any - rather the opposite). The lack of office politics, aggro etc. is merely an added benefit.

Tasslehoff
10th November 2015, 07:23
https://www.ipse.co.uk/news/ipse-reacts-reports-crackdown-so-called-personal-service-companies

ShandyDrinker
10th November 2015, 07:59
https://www.ipse.co.uk/news/ipse-reacts-reports-crackdown-so-called-personal-service-companies

Nice to finally see a response from the IPSE. Hopefully they'll publish a follow-up on the response to the urgent clarification.

LisaContractorUmbrella
10th November 2015, 08:06
Nice to finally see a response from the IPSE. Hopefully they'll publish a follow-up on the response to the urgent clarification.

I'd be surprised to see a 'urgent' clarification - urgency is an unknown concept at HMRC - best you can hope for is 'sometime after a week next Tuesday' :eyes The AS is only 2 weeks away so I think IPSE will just be told to be patient

teapot418
10th November 2015, 08:11
See you next Tuesday just about sums it up :(

ShandyDrinker
10th November 2015, 08:16
I'd be surprised to see a 'urgent' clarification - urgency is an unknown concept at HMRC - best you can hope for is 'sometime after a week next Tuesday' :eyes The AS is only 2 weeks away so I think IPSE will just be told to be patient

Of course... silly me... I couldn't expect anything that could be helpful to the people it is likely to impact!

Given the budgets we've already had this year I wait to see, with horrified fascination, what Gideon and friends will unleash on us next.

Tasslehoff
10th November 2015, 08:31
Of course... silly me... I couldn't expect anything that could be helpful to the people it is likely to impact!

Given the budgets we've already had this year I wait to see, with horrified fascination, what Gideon and friends will unleash on us next.

Prior to this Gov. I always quite looked forward to budget day. "Ohh Booze a bit cheaper" etc

Now I feel my entire future I have been cultivating for the past 10 years hangs in the balance everytime that bloody box comes out.

pjt
10th November 2015, 08:50
The vast majority of banks cannot reclaim VAT, and as they are key users of contractors, that's a whole world of VAT going missing. And as VAT is chargeable on turnover regardless of profit.......

Surley we'd be employeed by the agencies though in most case's? Therefore they would still charge the end client VAT. We'd then just be paid as an employee of the agency. So VAT would still be collected and paid to HMRC.

MarkT
10th November 2015, 09:08
Now I feel my entire future I have been cultivating for the past 10 years hangs in the balance everytime that bloody box comes out.

That makes two of us - I'm terrified, no bones about it, if this idiotic scheme is what they want, they'll get it and it'll be hugely popular

ChimpMaster
10th November 2015, 09:11
I think the government and HMRC would be letting themselves down if they didn't work out some way of making this change retrospective.

oracleslave
10th November 2015, 09:12
Erm... I do it for the money

So do I. The more politics and aggro the better as it results in more money.

ShandyDrinker
10th November 2015, 09:16
I think the government and HMRC would be letting themselves down if they didn't work out some way of making this change retrospective.

What are you trying to do... give them ideas! :facepalm:

ShandyDrinker
10th November 2015, 09:17
That makes two of us - I'm terrified, no bones about it, if this idiotic scheme is what they want, they'll get it and it'll be hugely popular

+1

pjt
10th November 2015, 09:18
I think the government and HMRC would be letting themselves down if they didn't work out some way of making this change retrospective.

:eek::eek::eek:

d000hg
10th November 2015, 09:19
Any idea what would happen to pre-existing contracts?

The Spartan
10th November 2015, 09:22
Any idea what would happen to pre-existing contracts?

A very good question as I've been in this contract since January and have been extending till July, I need to know when to hit the eject button.

Chutley
10th November 2015, 09:45
There will always be a workaround. The gov and HMRC never think things through properly and there will be much brighter individuals who find the solutions.

In simple terms, it is designed to eliminate the one-man-band Ltd Company contractors (like me). It will also capture the big earning individuals who cannot be replaced with a substitute (Fiona Bruce cannot send in a replacement) and work somewhere for protracted periods.

So what about the one-man band PMs? Surely if 2 or 3 Project managers get together and form a Ltd company, then it is no longer 'pseudo-employment'. The client wants a project manager with a skill-set - the new Ltd company can send in the client's choice - but with stipulation that substitute can also be used. The 3 PM directors can still make their salaries and dividends meet their needs, and the Government's rules are met...

I'm sure that there will be other solutions. I know that I will not be going permanent for anybody - would rather run a market stall than have a company own my soul again and make me work an extra 20 hours a week over my paid 40.

MarkT
10th November 2015, 09:48
I need to know when to hit the eject button.

Now there's a good point, say this comes in for April 2016. Does that mean every single contractor working through a Ltd will bail on April 30th and start looking for another 1 month gig if they don't want to become perm, or aren't offered it?

How many projects would be cancelled?! There'd be such a rush to FTC, perm work or even just to use an umbrella, there's no thoughts around the tax we've already paid into SA for next year and the vast amounts coming back as rebates!

I'm very worried about Nov 25th, but in all seriousness, I can't see how it could possibly work, but the main body that can stop it, are the CBI and big businesses who will lose their flexible workforce, anyone any contacts?

MicrosoftBob
10th November 2015, 09:52
I'm very worried about Nov 25th, but in all seriousness, I can't see how it could possibly work, but the main body that can stop it, are the CBI and big businesses who will lose their flexible workforce, anyone any contacts?

I doubt big business cares whether the workforce is flexible or not as long as it's cheap

If we don't do contracts, there are plenty of ICTs who will

Why should big business care about us ?

northernladuk
10th November 2015, 09:56
I doubt big business cares whether the workforce is flexible or not as long as it's cheap

If we don't do contracts, there are plenty of ICTs who will

Why should big business care about us ?

I think that's such a sweeping comment it ceases to be relevant. Not all businesses can or want to get involved with offshore companies and those that do still need wiggle room. All debatable but I don't agree with the all encompassing comment you made.

diseasex
10th November 2015, 10:02
I think that's such a sweeping comment it ceases to be relevant. Not all businesses can or want to get involved with offshore companies and those that do still need wiggle room. All debatable but I don't agree with the all encompassing comment you made.
not all business want cheap workforce too and would rather pay premium for quality, have a person on site, and discuss with him stuff face to face...

MrMarkyMark
10th November 2015, 10:02
I think that's such a sweeping comment it ceases to be relevant. Not all businesses can or want to get involved with offshore companies and those that do still need wiggle room. All debatable but I don't agree with the all encompassing comment you made.

You will always require expertise, this side of the water, to manage offshore, perform certain tasks etc.

At Client co, they have a ratio, with regards to how many, offshore = 1 LDN based contractor.
I believe its 4:1.
They use plenty of offshore resources, but I don't think that everyone's role could be offshored.

_V_
10th November 2015, 10:03
I can see where this will go. The 1 month will be rejected by big businesses and pressure groups and it will be implemented at 6 months.

So, after six months you either have to move to a different client or go on a payroll (client or brolly). The upside being no such thing as IR35. If you don't go on the payroll, HMRC will chase the client for the tax difference.

That's where I see this going.

MrMarkyMark
10th November 2015, 10:08
I can see where this will go. The 1 month will be rejected by big businesses and pressure groups and it will be implemented at 6 months.

So, after six months you either have to move to a different client or go on a payroll (client or brolly). The upside being no such thing as IR35. If you don't go on the payroll, HMRC will chase the client for the tax difference.

That's where I see this going.

As I said earlier, in this thread, that very approach is not working in Australia.
Projects are just not getting finished, as contractors bail after 6 months.

Could work well for true specialist, however and open the doors to more substitutions being possible.

The Spartan
10th November 2015, 10:08
Quite hilarious when you think about it, have you ever known a government contract to last just a month? Or even 6 months at that.

I know a lot has been said about being self employed and that companies won't deal with self-employed consultants but I'd be tempted to give that a shot rather than be forced onto PAYE for the remaining value of the contract.

northernladuk
10th November 2015, 10:11
not all business want cheap workforce too and would rather pay premium for quality, have a person on site, and discuss with him stuff face to face...

Absolutely. This should still be very worrying for a large number of contractors that aren't specialists in their area and only have a couple of years skills behind them though. They definitely are in danger of being ousted. I've definitely had my eyes opened recently with the resourcing at my client and nearly all of them we rejected were average permies at best. I hope they realise their situation and take suitable action. BIDI.

ChimpMaster
10th November 2015, 10:13
Quite hilarious when you think about it, have you ever known a government contract to last just a month? Or even 6 months at that.

I know a lot has been said about being self employed and that companies won't deal with self-employed consultants but I'd be tempted to give that a shot rather than be forced onto PAYE for the remaining value of the contract.


This would be a great basis for formulating the argument against the 1 month limit... or even 6 months!

MrMarkyMark
10th November 2015, 10:15
Absolutely. This should still be very worrying for a large number of contractors that aren't specialists in their area and only have a couple of years skills behind them though. They definitely are in danger of being ousted. I've definitely had my eyes opened recently with the resourcing at my client and nearly all of them we rejected were average permies at best. I hope they realise their situation and take suitable action. BIDI.

Its not only them, but, I totally agree, with the lack of quality, in some instances.

There are plenty of people who are just standard HR bods, yet are contractors.
I believe its these people, also, that are one of the core issues.

ChimpMaster
10th November 2015, 10:16
I get the feeling we're missing the bigger picture here.

What with all the other restrictions and additional taxation that the government is forcing upon contractors and Ltd Cos, it would well be that this article was deliberately leaked simply to distract everyone from this summer's budget.

d000hg
10th November 2015, 10:19
You'd think agencies would be putting big pressure on the government since their whole business model is liable to be affected quite substantially.

Maybe the idea of us contractors forming small consultancies is finally going to be worthwhile. I'll be the C++ guy, I need a Java guy, a C# guy and a database guy.

MicrosoftBob
10th November 2015, 10:22
Quite hilarious when you think about it, have you ever known a government contract to last just a month? Or even 6 months at that.

I know a lot has been said about being self employed and that companies won't deal with self-employed consultants but I'd be tempted to give that a shot rather than be forced onto PAYE for the remaining value of the contract.

I've done over five years on a 3 month contract, public sector work is a joke