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View Full Version : Many people getting offered higher day rate to work Inside IR35



Frogeye
9th October 2017, 12:50
I've just heard from a well-known agency who are offering a stack more ££ day rate (they mentioned up to 50% more) if you're happy to work inside IR35 at MOD....

Is this common? I don't know whether to believe it but has anyone else had this kind of offer? If so it must be hurting MOD/other gov units... and presumably forcing more roles out to the big Cos when they're not filled by indi contractors?

ladymuck
9th October 2017, 13:07
Yes it's been bandied about quite a lot in some areas. I know Imperial College were offering a rate uplift because they decided all contractors were inside.

northernladuk
9th October 2017, 13:11
I wouldn't believe a word an agent tells me for a start. That said, some places are offering an uplift, some aren't. Take each on its own merits and decide if you want the gig or not. The past is the past so consider the rate offered and make your decision.

I find the 50% figure a bit unbelievable but there could be other factors in play.

Hobosapien
9th October 2017, 14:35
Yes just consider the rate on offer compared to other opportunities. 50% uplift of a crap rate may still be a crap rate.

It is true that some PS clients realise they need to offset the impact of IR35 to attract decent contractors, who may otherwise be avoiding the whole mess best they can by avoiding PS, where being outside IR35 is a tad easier to get sorted during the contract negotiation phase. Especially where blanket inside IR35 determinations are being mishandled by PS.

Concorde
9th October 2017, 15:11
I've just spoken to someone who's getting £50 per day more - 10% uplift? Not massive but this gov dept is cash strapped and has 65% freelance workforce in some areas. The nuts? A an unlawful blanket IR35 policy is creating a spectacular own goal!

Hobosapien
9th October 2017, 15:22
If it means the HMRC reported tax figures are up they don't really care how they arrived there.

So like how silly house prices are just people paying each other a larger amount that cancels out to some degree, same for PS rate increases where the tax received gets fed back into the system to cover the cost.

Everything is the same except the numbers look bigger. :freaky:

youngguy
10th October 2017, 07:35
I've certainly seen PS roles fairly consistently higher - 10 to 15% , in the last few months so it does appear that rates are climbing up a bit.....but I haven't seen anything like 50%

Maslins
10th October 2017, 08:51
If it means the HMRC reported tax figures are up they don't really care how they arrived there.

Yup. Hammond can take the glory for increased tax take, and when each PS dept spends more, he can give them grief for poor efficiency. So he/govt look ace, whilst giving further evidence of the need for more punitive cuts to PS.

In terms of what we've seen, of our PS clients, most have seemingly been treated as inside IR35 but also given circa 20% day rate hikes to compensate. Not as much as 50% tho.

eek
10th October 2017, 08:54
Yup. Hammond can take the glory for increased tax take, and when each PS dept spends more, he can give them grief for poor efficiency. So he/govt look ace, whilst giving further evidence of the need for more punitive cuts to PS.

In terms of what we've seen, of our PS clients, most have seemingly been treated as inside IR35 but also given circa 20% day rate hikes to compensate. Not as much as 50% tho.

so enough for local people to roughly break even and continue in contract but not enough for those who live further away to stay....

psychocandy
10th October 2017, 08:59
Yep me.

Current client - LOT of contractors left beginning of the year when client decided they were going to be inside IR35 and no rate rise was offered. Also, I imagine the risk of retrospective action would have been an issue.

After a month or two, client thought feck what are we going to do. 35% increase to rates was offered to all new contractors. Which included me when I started in April. Yes its hassle to go umbrella but my take home is pretty much the same as before.

Local gig for me as well. Not sure if its going to be attractive to people who used to stay over/travel a long way - after all no expenses claim any more. Probably good news for local candidates like me where its not an issue (12 miles for me).

Bottom line

Client is 35% worse off.
Client now potentially has less contractors to choose from (i.e. only worth it for local people)

Agency is better off. They've now got an extra 35% to take a cut of.

I'm financially about the same. Just a bit of hassle with having to use umbrella.
I know client is struggling to get people so chance of long gig looks very good (they asked me if I "minded" going through SC within a week of me being here).
My pension is now doing well. Worked out (if you can get an umbrella to do it as salary sacrifice) that for every £200 I pay into pension would be less than £100 in my pocket.

HMRC/government now collecting shedloads of extra tax (of course paid for by client). Out of one government pocket and into another with a bit of fannying about in the middle.

Pointless? Totally.

psychocandy
10th October 2017, 09:01
so enough for local people to roughly break even and continue in contract but not enough for those who live further away to stay....

Would suggest you need 35% to break even if you're local. A lot more than that if you're travelling/staying away.

TheFaQQer
10th October 2017, 09:01
HMRC/government now collecting shedloads of extra tax

If that's true then this is a success story for HMRC.

eek
10th October 2017, 09:06
Would suggest you need 35% to break even if you're local. A lot more than that if you're travelling/staying away.

depends on how much bench time you can afford - most people aren't willing to claim job seekers allowance to tide themselves over.

Sometimes a 10% cut is better than leaving and hoping for something more especially when the other options have additional costs...

northernladuk
10th October 2017, 09:09
Bottom line

Client is 35% worse off.
Client now potentially has less contractors to choose from (i.e. only worth it for local people)
.

And the quality of their contractors has hit rock bottom...

psychocandy
10th October 2017, 10:17
If that's true then this is a success story for HMRC.

but not for other departments who now have hassle and extra cost...

psychocandy
10th October 2017, 10:19
depends on how much bench time you can afford - most people aren't willing to claim job seekers allowance to tide themselves over.

Sometimes a 10% cut is better than leaving and hoping for something more especially when the other options have additional costs...

Wrong. In your haste to have a dig you made a big mistake. 10% may be affordable, each to his own. But I said BREAK EVEN. :-)

But yes I would agree that each should be taken on its merits.

BTW - you can harp on about JSA until the sun implodes but I'll still claim it in future if I decide its worth it.

eek
10th October 2017, 10:24
Wrong. In your haste to have a dig you made a big mistake. 10% may be affordable, each to his own. But I said BREAK EVEN. :-)

But yes I would agree that each should be taken on its merits.

BTW - you can harp on about JSA until the sun implodes but I'll still claim it in future if I decide its worth it.

And I was pointing out why people may stay even if the rates were slightly lower - oh and its nice to see that you rise to the JSA bait every time we hit you with it....

psychocandy
10th October 2017, 10:51
And I was pointing out why people may stay even if the rates were slightly lower - oh and its nice to see that you rise to the JSA bait every time we hit you with it....

I agree - as with all gigs, take it on its own merits. To be honest, I dont think JSA would ever sway me either way - its only £75!

Yes yes :-) You do know I havent claimed it for years??

Smackdown
10th October 2017, 11:15
I'm personally seeing the same rate for inside/outside of IR-35 in Bristol. They mostly want to pay £350 either way. Seems like a much better deal to get something outside of IR-35.

Feels like BS legalisation. You're not really an employee if they can get rid of you within a week, inside or outside of IR-35. :winker:


And I was pointing out why people may stay even if the rates were slightly lower - oh and its nice to see that you rise to the JSA bait every time we hit you with it....

It does seem very mean spirited. You pay tax for it so you should get it paid back. I personally wouldn't bother simply due to the sum of money being very small but it might go further for some other people.