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View Full Version : And the choice will have to be made



eek
23rd November 2016, 14:04
Go permie or try to expand into a proper consultancy....

youngguy
23rd November 2016, 14:48
I still can't quite get my head around how the mechanics of this will work.....and how it will all be clear for April

BoredBloke
23rd November 2016, 15:15
I still can't quite get my head around how the mechanics of this will work.....and how it will all be clear for April

It will work like this. A job is posted...the agency will be cautious and state that the contract falls within IR35 and you'll have no ability to argue against it. You will be caught or you won't have a contract. You could escape to the private sector, but within 12 months they will announce that it's unfair to have 2 contractors doing the same work being taxed in 2 different ways and it will be rolled out there also.

DotasScandal
23rd November 2016, 15:25
It will work like this. A job is posted...the agency will be cautious and state that the contract falls within IR35 and you'll have no ability to argue against it. You will be caught or you won't have a contract. You could escape to the private sector, but within 12 months they will announce that it's unfair to have 2 contractors doing the same work being taxed in 2 different ways and it will be rolled out there also.

Exactly this.
Thanks.

eek
23rd November 2016, 16:10
Exactly this.
Thanks.

+2. However the private sector would be more likely to fight on your side rather than HMRCs.

I know exactly how I would play out the forthcoming battles. I don't think IPSE have a clue....

But I'm going to use my time more productively. I foresee a little bespoke consultancy in the future....

youngguy
23rd November 2016, 16:14
+2. However the private sector would be more likely to fight on your side rather than HMRCs.

I know exactly how I would play out the forthcoming battles. I don't think IPSE have a clue....

But I'm going to use my time more productively. I foresee a little bespoke consultancy in the future....

As a solo chap or taking ppl under your wing ?

eek
23rd November 2016, 16:22
As a solo chap or taking ppl under your wing ?

The first followed by the second (although chances are the eek twins will be getting some well paid weekend work in the near future).

youngguy
23rd November 2016, 16:24
The first followed by the second (although chances are the eek twins will be getting some well paid weekend work in the near future).

Under 1 you would still be a PSC shirley? And be a disguised employee?

eek
23rd November 2016, 16:41
Under 1 you would still be a PSC shirley? And be a disguised employee?

True. But my plan is to be software lead rather than time based and I won't be doing public sector work unless I can totally avoid it.

Maslins
23rd November 2016, 16:43
It will work like this. A job is posted...the agency will be cautious and state that the contract falls within IR35 and you'll have no ability to argue against it. You will be caught or you won't have a contract. You could escape to the private sector, but within 12 months they will announce that it's unfair to have 2 contractors doing the same work being taxed in 2 different ways and it will be rolled out there also.

My guess would generally agree with this...but with the slight caveat that surely it's in the end client/agent's interest to "help" the contract be outside IR35? Presumably they're looking at contractors because for whatever reason they don't want to recruit a permie. They'll in turn be aware that offering the gig to a contractor but saying it's inside IR35 won't appeal to the contractor, who may therefore decide to look elsewhere.

Ie long story short it comes down to supply and demand. If you're a highly skilled contractor with few peers, and there's lots of demand for your work, the agencies/clients will want to secure you, potentially by helping ensure the contract is outside IR35. If on the other hand you're easily replaceable and there's more contractors of your skillset than gigs, yeah, could put you in a weak position.

youngguy
23rd November 2016, 16:44
True. But my plan is to be software lead rather than time based and I won't be doing public sector work unless I can totally avoid it.

Fair point. I guess as a 'bespoke consultancy' you can avoid bos stuff and charge a higher rate to offset the taxes.

I haven't necessarily written off ps work forever (after all, there is going to be a lot around!) It just depends on whether some of the new tax hit can be absorbed.....and IF supply goes down then economically the logic follows that price will rise.

youngguy
23rd November 2016, 16:49
My guess would generally agree with this...but with the slight caveat that surely it's in the end client/agent's interest to "help" the contract be outside IR35? Presumably they're looking at contractors because for whatever reason they don't want to recruit a permie. They'll in turn be aware that offering the gig to a contractor but saying it's inside IR35 won't appeal to the contractor, who may therefore decide to look elsewhere.

Ie long story short it comes down to supply and demand. If you're a highly skilled contractor with few peers, and there's lots of demand for your work, the agencies/clients will want to secure you, potentially by helping ensure the contract is outside IR35. If on the other hand you're easily replaceable and there's more contractors of your skillset than gigs, yeah, could put you in a weak position.

I suppose the other key point is the client may want you, but will the agent be willing to take that risk,as it will fall on them?

I hope supply and demand will reign and Gov will realise they have to increase rates to get stuff done....I can dream. Or maybe Gov depts will find other frameworks and be creative .

Or maybe we are all just F*****!

billybiro
23rd November 2016, 21:08
I suppose the other key point is the client may want you, but will the agent be willing to take that risk,as it will fall on them?

I hope supply and demand will reign and Gov will realise they have to increase rates to get stuff done....I can dream. Or maybe Gov depts will find other frameworks and be creative .

Or maybe we are all just F*****!

Probably the latter. Rates won't go up, all clients/agencies will be in the same boat, so virtually all contract offers that come your way will be inside IR35. You'll have no choice and you'll either suck it up and take it or starve.

DotasScandal
23rd November 2016, 21:11
You'll have no choice and you'll either suck it up and take it or starve.

Or reinvent yourself in another field or better yet, under friendlier skies.

TestMangler
23rd November 2016, 21:16
Or reinvent yourself in another field or better yet, under friendlier skies.

The writing has been on the wall for 'normal' contracting for years now. I decided 2 years ago it was no longer worth the hassle. I said about five years ago, we'd all end up on some equivalent of FTC type contracts with the worst of every operating model rolled into one. I'll admit, I miss the 'free money' but the rest of the shit that went with it, I don't miss one bit (OK, maybe the strip clubs, but nowt else).

malvolio
23rd November 2016, 21:46
My guess would generally agree with this...but with the slight caveat that surely it's in the end client/agent's interest to "help" the contract be outside IR35? Presumably they're looking at contractors because for whatever reason they don't want to recruit a permie. They'll in turn be aware that offering the gig to a contractor but saying it's inside IR35 won't appeal to the contractor, who may therefore decide to look elsewhere.

Ie long story short it comes down to supply and demand. If you're a highly skilled contractor with few peers, and there's lots of demand for your work, the agencies/clients will want to secure you, potentially by helping ensure the contract is outside IR35. If on the other hand you're easily replaceable and there's more contractors of your skillset than gigs, yeah, could put you in a weak position.
You're making two bad assumptions there:

1. That agencies would prefer to run all their people through their payroll system because it's easy and cheap. Treat your invoice as gross salary, dump the details into the payroll system and send you the resultant net pay cheque, job done. Sorting out your real tax position is your problem, come year end. Therefore the agencies will love this since it just cut their workload in half - everyone is caught so everyone on the payroll process, thank you very much.

2. That the agency is interested in securing your specialist skills. They aren't. It's a commodity market, not a people one, the best applicants in the first 8 hours are the ones that go forward.

eek
24th November 2016, 14:43
I think my decision has been made. The awkward bit that I've never been able to solve may well have solved itself...

youngguy
24th November 2016, 19:34
I think my decision has been made. The awkward bit that I've never been able to solve may well have solved itself...

Giz' a job then 😉