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View Full Version : Sick pay and holiday pay - how much damage would that do to the market?



RostokMcSpoons
26th October 2018, 12:53
If Hammond does go ahead and do the expected 'number' on private sector contracting in this budget (or the next), but gives people inside IR35 the employment rights such as sick pay, holiday pay, and perhaps even pensions... how would you think that will affect the contracting market?

I was told by one of my superiors that the bank I work for would chuck the whole contractor thing in, if they had to pay sick pay etc.

Was he being overly dramatic?

Hobosapien
26th October 2018, 13:32
Clients would move to a true CaaS model (Contractor as a Service) where they only pay for the services received.

True contractors only want to provide a service and get paid for it. If you want employee benefits become an employee.

swamp
26th October 2018, 16:01
Clients would define roles outside IR35. The market would be largely unaffected, and contracting would carry on as it has always done.

ladymuck
26th October 2018, 18:22
Clients would move to a true CaaS model (Contractor as a Service) where they only pay for the services received.



You wish. I would like that too!

In reality, they'll either offshore or hand it off to the big 4 and engage them on a SOW basis, heads in the sand as to where the bodies come from.

Many banks, and I'm sure they're not alone, already engage consultancies to provide the people they need rather than engage via the agency / direct model that used to be prevalent.

cojak
26th October 2018, 19:47
You wish. I would like that too!

In reality, they'll either offshore or hand it off to the big 4 and engage them on a SOW basis, heads in the sand as to where the bodies come from.

Many banks, and I'm sure they're not alone, already engage consultancies to provide the people they need rather than engage via the agency / direct model that used to be prevalent.

It would be interesting to see how prepared agencies are for this. It could decimate them if it does go ahead.

If they don’t know now, agents will know all about IR35 just before they’re booted out of the door.

billybiro
28th October 2018, 09:34
It would be interesting to see how prepared agencies are for this. It could decimate them if it does go ahead.

...and nothing of value would be lost.

Unix
28th October 2018, 23:37
My client is Public Sector and they deemed all contractors outside IR35, private companies will just do the same.

What should happen is a third Corp tax rate should be introduced for Ltd companies with one employee at 2% above the current rate. Clear and simple to enforce and means everyone knows where they stand,

PurpleGorilla
29th October 2018, 07:00
If Hammond does go ahead and do the expected 'number' on private sector contracting in this budget (or the next), but gives people inside IR35 the employment rights such as sick pay, holiday pay, and perhaps even pensions... how would you think that will affect the contracting market?

I was told by one of my superiors that the bank I work for would chuck the whole contractor thing in, if they had to pay sick pay etc.

Was he being overly dramatic?

You don’t get sick pay inside IR35. But you do get holiday pay - though the funding of this in my case comes from my earnings on actual days worked. So it saves me a little tax but costs my ‘employer’ nothing. With regards to Employers NI once again I pay that out of the earned pot. Not sure about how satiating maternity pay is funded.

The only issue for employers (as far as I see it) is increasing the initial rate to attract candidates willing to go inside IR35.


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MarkT
29th October 2018, 08:18
You don’t get sick pay inside IR35. But you do get holiday pay - though the funding of this in my case comes from my earnings on actual days worked. So it saves me a little tax but costs my ‘employer’ nothing. With regards to Employers NI once again I pay that out of the earned pot. Not sure about how satiating maternity pay is funded.

The only issue for employers (as far as I see it) is increasing the initial rate to attract candidates willing to go inside IR35.


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Thing is, you shouldn’t be paying the NI at all, legal challenges are mounting on this, and that’s where the client will start to squirm. NI on a day rate is a big chunk.

Hence, sadly, I’m expecting an April 2019 start, it means less time for business to really understand what’s being proposed.

Joolsey86
29th October 2018, 12:02
I agree, I think blanket Inside IR35 enforcements will be implemented.

A hybrid fixed contract will be the standard taking out holiday pay and we will end up worse off than a permanent employee.

What this will do is drive the current contracting staff into permanent employment, which will drive the low skilled and lazy types into contracting as they wont be able to compete for a permanent position against a highly skilled, experienced, certified and motivated ex-contractor.

So out flexible market place will end up being the detritus of our industry. Well done May/Hammond.

oliverson
29th October 2018, 14:38
I agree, I think blanket Inside IR35 enforcements will be implemented.

A hybrid fixed contract will be the standard taking out holiday pay and we will end up worse off than a permanent employee.

What this will do is drive the current contracting staff into permanent employment, which will drive the low skilled and lazy types into contracting as they wont be able to compete for a permanent position against a highly skilled, experienced, certified and motivated ex-contractor.

So out flexible market place will end up being the detritus of our industry. Well done May/Hammond.

you think forcing a contractor into a permie job would motivate them?

GreenMirror
29th October 2018, 14:50
Maybe employers will buy IR35 insurance from IPSE or QDOS?

PurpleGorilla
29th October 2018, 16:26
Thing is, you shouldn’t be paying the NI at all, legal challenges are mounting on this, and that’s where the client will start to squirm. NI on a day rate is a big chunk.

Hence, sadly, I’m expecting an April 2019 start, it means less time for business to really understand what’s being proposed.

I very much agree I shouldn’t be paying Employer’s NI but this is the reality of inside IR35 today.

I get more pay than a permie, but any perks (holiday pay) come from incurred earnings. I can pay into a pension and save some tax. But no employer contribution.

On the plus side I don’t have performance reviews - but then I miss out on perks like WFH. Basically contractors are here to work on projects and keep head down...

Overall - the situation suits me OK - for now...


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