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cosmic
29th October 2018, 16:18
It's official ir35 to private sector in 2020. Say bye bye to the UK mobile contracting sector.

fiisch
29th October 2018, 16:34
I’ve checked with my current boss and he’s said he’ll allow me to opt out when the time comes. I’ve got a 2-year contract so definitely still be here when the changes arrive.

:banana:

SueEllen
29th October 2018, 16:34
I’ve checked with my current boss and he’s said he’ll allow me to opt out when the time comes. I’ve got a 2-year contract so definitely still be here when the changes arrive.

:banana:Oh dear!!

Lance
29th October 2018, 16:36
I’ve checked with my current boss and he’s said he’ll allow me to opt out when the time comes. I’ve got a 2-year contract so definitely still be here when the changes arrive.

:banana:

ha


you're joking right?
Aren't you?

SueEllen
29th October 2018, 16:36
Seriously do people not realise:
1. IR35 already exists in the private sector
2. You cannot opt-out
3. The chancellor has given agencies, large enterprises and medium sized companies time to put in place work arounds e.g. change their model of working.

Mordac
29th October 2018, 16:37
I’ve checked with my current boss and he’s said he’ll allow me to opt out when the time comes. I’ve got a 2-year contract so definitely still be here when the changes arrive.

:banana:

You can only opt-out if you have a letter from your nurse...

SueEllen
29th October 2018, 16:38
You can only opt-out if you have a letter from your nurse...LOL

fiisch
29th October 2018, 16:38
You can only opt-out if you have a letter from your nurse...

I'm looking forward to the sick pay... and holidays.

"We'll be rich! Richer than astronauts!"

northernladuk
29th October 2018, 16:39
ha


you're joking right?
Aren't you?

With his posting history God only knows :eyes

Lance
29th October 2018, 16:39
Seriously do people not realise:
1. IR35 already exists in the private sector
2. You cannot opt-out
3. The chancellor has given agencies, large enterprises and medium sized companies time to put in place work arounds e.g. change their model of working.

In addition, you can be in the public sector, and outside IR35. The change is to the responsibility for determination of status. Not the facts of the status, nor the law on the status (except the removal of 5% expenses).

AtW
29th October 2018, 16:43
It's official ir35 to private sector in 2020. Say bye bye to the UK mobile contracting sector.

No, it's only official if I say so...

saptastic
29th October 2018, 17:05
In addition, you can be in the public sector, and outside IR35. The change is to the responsibility for determination of status. Not the facts of the status, nor the law on the status (except the removal of 5% expenses).

So hopefully gives time to understand and make qualified & logical decisions - rather than rushed blanket decisions across companies?

saptastic
29th October 2018, 17:09
document here

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752074/IR35_web.pdf

cojak
29th October 2018, 17:16
It's official ir35 to private sector in 2020. Say bye bye to the UK mobile contracting sector.

No. It will change certainly, but it won’t disappear completely.

flamel
29th October 2018, 17:18
Seriously do people not realise:
1. IR35 already exists in the private sector
2. You cannot opt-out
3. The chancellor has given agencies, large enterprises and medium sized companies time to put in place work arounds e.g. change their model of working.

4. They have time to save up the cash to pay Big 4 consultancies instead of contractors

PerfectStorm
29th October 2018, 17:30
I worry about the people panicking on here. If you think you're inside IR35 and not paying accordingly then you're breaking the rules today, let alone 2020.

Plenty of time for agencies and clients to pull their socks up and ensure full compliance - to keep people out, rather than in.

northernladuk
29th October 2018, 17:35
I worry about the people panicking on here. If you think you're inside IR35 and not paying accordingly then you're breaking the rules today, let alone 2020.

Plenty of time for agencies and clients to pull their socks up and ensure full compliance - to keep people out, rather than in.Absolutely. We see this everytime there is any announcements of this ilk. Low number posters posting doom and gloom threads that haven't been involved in the discussions that have been going on many months already. They've not wanted to get involved before and all of a sudden they are starting knee jerk threads.

You do have to wonder about their knowledge of the existing situation and why they are suddenly so spooked.

SuperZ
29th October 2018, 17:36
Well, they need to do it fairly. I'm sure there are contractors in central government, been there a long while like 10 years, typical perm positions but still deemed outside.
I see similar roles where the rules seem to be applied willy-nilly, sometimes inside sometimes outside. I'm sure some will give a reason but it's BS really - pretty much exact same roles where all should be inside or outside.
Currently semi-retired now anyway, working when something interesting comes up and currently part time. Contracting around the country inside IR35 does not appeal to me and I hope many have saved up over the years.


Irritating thing is there are plenty of folks who used those dodgy payment schemes that still haven't had to pay up their taxes due.

northernladuk
29th October 2018, 17:37
Because HMRC are good at doing things fairly. :eyes:

AndrewK
29th October 2018, 17:52
I worry about the people panicking on here. If you think you're inside IR35 and not paying accordingly then you're breaking the rules today, let alone 2020.

Plenty of time for agencies and clients to pull their socks up and ensure full compliance - to keep people out, rather than in.

I think you are the missing point. The problem is not with a contractor attitude, but how agencies and big companies will approach that. If they will advertise contract as IR35 inside only, it won't be your decision. The pool of contracts outside IR35 will decrease significantly.

fiisch
29th October 2018, 17:53
In all seriousness, I don’t see the issue. Things change - it’s called “progress”.

The consequence of this change is yet to be realised - rates might go up; accountants/agents might get creative; we might get employee-Type benefits; the contractor market might be decimated and ex-contractors may be deemed unemployable and unfit for perm work. Who knows? Only time will tell.

Worst case scenario we’ll all be shutting up shop in eighteen months and making use of Entrepreneurs tax relief (thanks Phil).

I’d sooner the burden is passed to the client, as despite reading at length on the subject, I’m still not sufficiently qualified to judge IR35 status in isolation. I’d sooner to be left to focus on what I’m good at.... (tbc!)

BoredBloke
29th October 2018, 18:01
I think you are the missing point. The problem is not with a contractor attitude, but how agencies and big companies will approach that. If they will advertise contract as IR35 inside only, it won't be your decision. The pool of contracts outside IR35 will decrease significantly.

Totally agree.....Right now the public sector struggles to recruit - some people jumped ship to the private sector. Where the public sector offers outside IR35 roles I think it's more to do with the fact that contractors are shunning the inside IR35 gigs and staying in the private sector. To compete they have to advertise it as outside. By rolling ir35 out into the private sector, this competition is removed. Both the private and public sectors will only offer inside roles because there is less of a risk.

Cirrus
29th October 2018, 18:05
I’m still not sufficiently qualified to judge IR35 status in isolation. Let me remind you of the complex subtle logic:

1) If the Revenue don't investigate you, you're not IR35
2) If QDOS get you off or the Revenue give up, you're not IR35
3) Else you are IR35


IR 35 stands for Income Roulette 35 years. (Well I did it for slightly less)

Mordac
29th October 2018, 18:21
I'm looking forward to the sick pay... and holidays.

"We'll be rich! Richer than astronauts!"

If mental illness qualifies for sick pay, you're about to be very rich indeed...

northernladuk
29th October 2018, 18:32
In all seriousness, I don’t see the issue. Things change - it’s called “progress”.

You've been contracting how long?

WordIsBond
29th October 2018, 18:37
Seriously do people not realise:

2. You cannot opt-out

I opt out on every contract. I go direct and every contract has a substitution clause and very specific anti-SDC provisions. A lot of my contracts are fixed-price and I use helpers on every project.

cosmic
29th October 2018, 18:49
My god the comments on here! most will be in an ir35 contract even though they are not.. just look at the public sector. They will not raise rates as most are penny a pound.

It doesn't matter if your contract is out. When it rolls through most will be passed as in due to risk so it's out of your hand.

1 Jack Kada
29th October 2018, 18:56
In all seriousness, I don’t see the issue. Things change - it’s called “progress”.

The consequence of this change is yet to be realised - rates might go up; accountants/agents might get creative; we might get employee-Type benefits; the contractor market might be decimated and ex-contractors may be deemed unemployable and unfit for perm work. Who knows? Only time will tell.

Worst case scenario we’ll all be shutting up shop in eighteen months and making use of Entrepreneurs tax relief (thanks Phil).

I’d sooner the burden is passed to the client, as despite reading at length on the subject, I’m still not sufficiently qualified to judge IR35 status in isolation. I’d sooner to be left to focus on what I’m good at.... (tbc!)

If you want perm type benefits and be left to what you are good at then just go perm today 😌. No one is stopping you

This is the end of contracting as we have known it. And the government estimates that a third of contractors are really disguised employees (and I am not surprised at this figure)

mudskipper
29th October 2018, 19:02
In addition, you can be in the public sector, and outside IR35. The change is to the responsibility for determination of status. Not the facts of the status, nor the law on the status (except the removal of 5% expenses).

The responsibility for deducting tax changes. The liability changes. The responsibility for employers' NI should change.

DaveB
29th October 2018, 19:10
Totally agree.....Right now the public sector struggles to recruit - some people jumped ship to the private sector. Where the public sector offers outside IR35 roles I think it's more to do with the fact that contractors are shunning the inside IR35 gigs and staying in the private sector. To compete they have to advertise it as outside. By rolling ir35 out into the private sector, this competition is removed. Both the private and public sectors will only offer inside roles because there is less of a risk.

That last bit depends on how many cases we see between now and there where contractors claim employment benefits forcing a re-appraisal of their status. We've seen two cases recently that impacted both the end client and the agencies involved due to poor management of the assessment process. More of those will highlight that declaring al contracts as inside still carries risk and potential liabilities.

It's not a done deal yet, and I still think there will be room for and demand for contractors to work outside IR35. It will take effort from both sides to make it work.

Lance
29th October 2018, 19:19
This is the end of contracting as we have known it. And the government estimates that a third of contractors are really disguised employees (and I am not surprised at this figure)

Judging by the people I've met it's more like 2/3rds....

DimPrawn
29th October 2018, 19:23
Personally I think 90% of current IT contractors will be classified as inside IR35 by big clients (forced by their risk / human remains depts).

To me this marks the effective end of meaningful IT contracting in the UK.

Thankfully I should be retired by then. :smile

Lance
29th October 2018, 19:23
That last bit depends on how many cases we see between now and there where contractors claim employment benefits forcing a re-appraisal of their status. We've seen two cases recently that impacted both the end client and the agencies involved due to poor management of the assessment process. More of those will highlight that declaring al contracts as inside still carries risk and potential liabilities.

It's not a done deal yet, and I still think there will be room for and demand for contractors to work outside IR35. It will take effort from both sides to make it work.

I totally agree with this ^^^^^

A truly independent contractor is a valuable resource for a client. Client's will make it work where they need to.

Where they don't need the independence, and need control , i.e. just bums on seats they want to be able to bin at short notice, they'll just declare, correctly, as inside.

The lessons learned in the public sector before April 2020 will only reinforce this.

fiisch
29th October 2018, 20:07
You've been contracting how long?



Two years off and on, but don’t see the relevance to the quote as I’m clearly referencing legislation in general, not specific legislation affecting independent contractors.

northernladuk
29th October 2018, 20:10
Two years off and on, but don’t see the relevance to the quote as I’m clearly referencing legislation in general, not specific legislation affecting independent contractors.Because you clearly aren't a contractor.

vadhert
29th October 2018, 20:13
Looks like I moved to Jersey at the right time.

13% seems much more reasonable even in permiedom.

:smokin

1 Jack Kada
29th October 2018, 20:21
Looks like I moved to Jersey at the right time.

13% seems much more reasonable even in permiedom.

:smokin

On what sort of salary expressed in gbp?

13% of 30K is not great = 13% of 300K is better

ZARDOZ
29th October 2018, 20:22
Personally I think 90% of current IT contractors will be classified as inside IR35 by big clients (forced by their risk / human remains depts).

To me this marks the effective end of meaningful IT contracting in the UK.



I expect this is closest to the truth under the current model. HR departments are risk adverse. If it ends up with a skills shortage they will lobby for fast track visas for Bob contractors on crap rates who aspire to be permie.

The only hope is effective lobbying for a new model of contracting. Eg. One where the contractor bids for a contract/work order all in, no requirements on hours worked, location, supervision. It just becomes about the deliverable. I have done this, many could do this, it just requires a cultural shift to make it more common.

Six It
29th October 2018, 20:22
well.. my current contract ends July 2019.
i have just been asked if i wanted to keep on working with the organisation after that contract (<2yrs)- in another role/ part of the country on a different project - but with this all going on - i might just start asking around for work in the ME..

fiisch
29th October 2018, 20:39
Because you clearly aren't a contractor.

I’m not an accountant nor chancellor of the exchequer either. I didn’t realise these factors prohibit me from having an opinion....

I clearly am a contractor. My job description says I am.

novaprospect
29th October 2018, 20:39
Hello friends, apologies for the thread hijack but this seems as good as place as any for this question and I'm not sure its worthy of a new thread...

First time contractor, just signed first contract. Agency (call themselves a 'consultancy') was very surprised by my decision to use an Umbrella and gave me an almost "your loss buddy" vibe down the phone.

Having received and signed the contract I am 100% confident it wouldn't pass an IR35 check, not even close. Even based on what little I know. My role is also pretty much undefined, I'm just another body on a huge project that needs more bodies.

There are multiple other contractors from the same agency working for this client on this project, I'm told all are using LTD companies deeming themselves outside IR35. It also appears the vast majority of IT Contractors that I've met are deeming themselves outside IR 35 (indeed many I asked had little clue what it is/means).

So to my question... am I being an idiot by deeming myself outside and going through an umbrella? It feels somewhat like I'm the schmuck whose listening to the rules whilst everyone else takes home another £2k a month. Or am I going to be smug when HMRC bills thousands of contractors for unpaid tax?

Somehow the latter feels unlikely...

ChimpMaster
29th October 2018, 20:40
well.. my current contract ends July 2019.
i have just been asked if i wanted to keep on working with the organisation after that contract (<2yrs)- in another role/ part of the country on a different project - but with this all going on - i might just start asking around for work in the ME..

Take an extension to March 2020 :smile

northernladuk
29th October 2018, 20:40
I clearly am a contractor. My job description says I am.

If that doesn't prove it 86 other posts will.

fiisch
29th October 2018, 20:45
If that doesn't prove it 86 other posts will.

Surely you can spot a leg pull that obvious?!

northernladuk
29th October 2018, 20:49
Surely you can spot a leg pull that obvious?!Not with you it's not. Best drop the leg pulling. It's not helping you.

1 Jack Kada
29th October 2018, 20:54
Not with you it's not. Best drop the leg pulling. It's not helping you.

Back to the topic - The only saving grace from all of this is that things become inside IR35 but somehow rates increase to offset the extra taxation

Personally I dont see it so I think most of the contractors at the big banks are finished but time will indeed tell

This is the single biggest change I have seen for ten years and some people really want to see IT contractors finished.

northernladuk
29th October 2018, 21:00
Back to the topic - The only saving grace from all of this is that things become inside IR35 but somehow rates increase to offset the extra taxation

Personally I dont see it so I think most of the contractors at the big banks are finished but time will indeed tell

This is the single biggest change I have seen for ten years and some people really want to see IT contractors finished.But again.. Exactly the same was said when IR35 came in, everytime it was reformed and when the Public Sector changes hit yet contracting still goes on, albeit with a fight on.

There are some big guns fighting this and its up to all of us to do our part. New contractors just giving up on the very day it's announced helps nothing. This suits no one except HMRC so there is a lot of pressure and time to work around it.

Instead of (incorrectly) forecasting the end of contracting as you known it for a short time, get involved and try make a difference.

cmscotland
29th October 2018, 21:32
Back to the topic - The only saving grace from all of this is that things become inside IR35 but somehow rates increase to offset the extra taxation

Personally I dont see it so I think most of the contractors at the big banks are finished but time will indeed tell

This is the single biggest change I have seen for ten years and some people really want to see IT contractors finished.

You're probably right about the big banks, their need for a flexible workforce will still exist but they'll just go to consultancies instead (and probably end up paying more per day).

electronicfur
29th October 2018, 21:32
But again.. Exactly the same was said when IR35 came in, everytime it was reformed and when the Public Sector changes hit yet contracting still goes on, albeit with a fight on.

There are some big guns fighting this and its up to all of us to do our part. New contractors just giving up on the very day it's announced helps nothing. This suits no one except HMRC so there is a lot of pressure and time to work around it.

Instead of (incorrectly) forecasting the end of contracting as you known it for a short time, get involved and try make a difference.

But when the public sector changes hit, the one public sector client I had just had a blanket rule for everyone, even though I was very clearly outside IR35. My cabinet-level MP didnt really care about my complaints. The simplest solution was just to stop all public sector work, as it was not worth the hassle, and there seemed to be little that could be done about it...

1 Jack Kada
29th October 2018, 21:34
But when the public sector changes hit, the one public sector client I had just had a blanket rule for everyone, even though I was very clearly outside IR35. My cabinet-level MP didnt really care about my complaints. The simplest solution was just to stop all public sector work, as it was not worth the hassle, and there seemed to be little that could be done about it...

Exactly - Big companies wont want the hassle of giving outside IR35 contracts in much the same way as they insist on using agencies even if you were referred by an existing employee

Its even made it to BBC Budget 2018: Contractors face higher tax and NI payments - BBC News (https://www.bbc.co.uk/news/business-46021558)

northernladuk
29th October 2018, 21:39
But when the public sector changes hit, the one public sector client I had just had a blanket rule for everyone, even though I was very clearly outside IR35. My cabinet-level MP didnt really care about my complaints. The simplest solution was just to stop all public sector work, as it was not worth the hassle, and there seemed to be little that could be done about it...Well my experience was different. My PS client came around and offered outside albeit after I'd left before it hit. I've also since taken an inside gig at a council with a rate high enough to make it worthwhile.

I've taken my eye off the ball off the PS recently but I do believe the blanket approaches should not be allowed so hopefully will change.

Also remember many clients didn't understand the rules either and was as bad for them as it was us. We've got a year to work with private clients to fix this and being driven by profits they will be much more willing that Public bodies who seem happy to struggle even now to get the right people.

It's not something that's going to change over night and it's not something that can be fixed by rolling over and posting contracting is dead type posts.

northernladuk
29th October 2018, 21:44
Exactly - Big companies wont want the hassle of giving outside IR35 contracts in much the same way as they insist on using agencies even if you were referred by an existing employee

Its even made it to BBC Budget 2018: Contractors face higher tax and NI payments - BBC News (https://www.bbc.co.uk/news/business-46021558)But that's totally incorrect and shows the nativity of many of the newer guys commenting with knee jerk reactions. Big companies are profit driven and cannot afford not to be able to get the skills they need in. They've got the clout and time to put a proper framework in and stick to it. They aren't constrained by highly complicated and constrained resourcing frameworks such as CL1 and the like.

It's going to be a fight and it will be messy I don't doubt but it starts with every contractor knowing the legislation and educating their clients. Something so many people don't want to or can't do. They just get scared when an announcement is made and start wailing.

d000hg
29th October 2018, 22:09
Wasn't the announcement that decisions on changes would be deferred to 2020 i.e. what the changes are is still up in the air?

Cirrus
29th October 2018, 22:12
Thankfully I should be retired by then. You should be retired by now :wave:

Mordac
29th October 2018, 23:18
I totally agree with this ^^^^^

A truly independent contractor is a valuable resource for a client. Client's will make it work where they need to.

Where they don't need the independence, and need control , i.e. just bums on seats they want to be able to bin at short notice, they'll just declare, correctly, as inside.

The lessons learned in the public sector before April 2020 will only reinforce this.

The real worry is that clients (or more specifically, their HR numpties) may just decide it's not worth the aggro hiring contractors. A decent part of our "value" was in the fact that all HR had to do was phone an agency, and the rest took care of itself. Now they have to fill in a questionnaire which none of them understand, how well do you think it's all going to work out?

jamesbrown
29th October 2018, 23:30
Wasn't the announcement that decisions on changes would be deferred to 2020 i.e. what the changes are is still up in the air?

No, today was a decision; the announcement was that the PS changes would be rolled out to the private sector on 6 April 2020. However, there is a consultation (to come) on the precise details of that rollout. One obvious difference is that there's a threshold for application in the private sector (i.e. the PSC will remain responsible when their client is a small company in "roughly" the same terms as the Companies Act 2006, otherwise it will be the client's responsibility to determine status).

northernladuk
30th October 2018, 00:07
No, today was a decision; the announcement was that the PS changes would be rolled out to the private sector on 6 April 2020. However, there is a consultation (to come) on the precise details of that rollout. One obvious difference is that there's a threshold for application in the private sector (i.e. the PSC will remain responsible when their client is a small company in "roughly" the same terms as the Companies Act 2006, otherwise it will be the client's responsibility to determine status).This consultation?
Off-payroll working in the private sector - GOV.UK (https://www.gov.uk/government/consultations/off-payroll-working-in-the-private-sector)

TwoWolves
30th October 2018, 00:11
The guy who got me into contracting in '93 said contracting was dead and went permie in '96. The bank he worked for was bought out and everyone sacked in '98.

We're not dead yet and I'm ready for a fight. Even the Tories have succomed to the civil service blob, we need a British conservative who actualy believes in the free-market-economy but I don't see any on the horison.

jamesbrown
30th October 2018, 00:14
This consultation?
Off-payroll working in the private sector - GOV.UK (https://www.gov.uk/government/consultations/off-payroll-working-in-the-private-sector)

Nah, the one they talk about in their response to that one :laugh


The government announced at Budget 2018 that it intends to extend the
reforms to the off-payroll rules. A further consultation on the detailed operation
of the new rules will be published in the coming months. This consultation will
inform the draft Finance Bill legislation, which is expected to be published in
Summer 2019. The new rules will be given effect from 6 April 2020.

WordIsBond
30th October 2018, 07:24
It's not something that's going to change over night and it's not something that can be fixed by rolling over and posting contracting is dead type posts.
Oh, let them moan about the death of contracting. Maybe they'll just go be permie somewhere and reduce the competition for the outside roles.

WordIsBond
30th October 2018, 07:30
The real worry is that clients (or more specifically, their HR numpties) may just decide it's not worth the aggro hiring contractors. A decent part of our "value" was in the fact that all HR had to do was phone an agency, and the rest took care of itself. Now they have to fill in a questionnaire which none of them understand, how well do you think it's all going to work out?
Yes, some will do that. And their projects won't get done, which will cost them.

Others will just say, 'Everyone inside.' And if they want to get good contractors, it will cost them because they'll have to pay more.

Others will have someone in HR learn how to fill out the form. Which will cost them.

Once UK plc figures out this is costing them, perhaps even more than it is costing contractors, they may start to push back. There is a year and a half for business to tighten the screws on the Tories. Contractors should be preparing as if this is going to happen, talking to clients so clients understand how it affects them. But I'm still not sure it will happen. If they'd scheduled it for 2019, I don't think the pressure could have built enough to stop it. Scheduling it for 2020 gives a lot of time for pressure to build.

Hobosapien
30th October 2018, 09:29
Contractors should also be using the time to assess their skills and what sort of service they can provide clients rather than any 'permie style cover' they may have been doing until now.

Time to become real contractors and not temp employees, then they can do all they like regarding IR35 as it won't apply.

We can seek out agencies that understand contractors as a service that already offer suitable b2b style contracts that have time and again been proven to be IR35 friendly by way of the long established independent review services. Maybe a thread recommending agencies that have a good track record in this regard, to encourage competition between agencies if we all start favouring agencies more in tune with the times and willing to adapt to cater for our needs and not just those of the client, though there is some common ground where clients and contractors want the same thing, not to be using contractors as a disguised permie with the IR35 risk that comes with.

Maybe there's an opportunity for an entity to promote more appropriate contracts for clients and agencies to use that de-risks them from IR35 by engaging contractors in a better way. Money to be made selling them seminars to educate and guide them, then charge for contract templates.:smokin

vadhert
30th October 2018, 11:54
On what sort of salary expressed in gbp?

13% of 30K is not great = 13% of 300K is better

120k so not that great

d000hg
30th October 2018, 12:58
No, today was a decision; the announcement was that the PS changes would be rolled out to the private sector on 6 April 2020. However, there is a consultation (to come) on the precise details of that rollout. One obvious difference is that there's a threshold for application in the private sector (i.e. the PSC will remain responsible when their client is a small company in "roughly" the same terms as the Companies Act 2006, otherwise it will be the client's responsibility to determine status).OK, thanks for that.

d000hg
30th October 2018, 13:00
In other EU nations you seem to see small Co-op entities (companies?) where a bunch of guys band together in a loose sense - they can work independently.

I think this is impractical in the UK as it ends up utilising alphabet shares and such dodgy things... how do they make it work in other countries (e.g. Sweden)?

Lance
30th October 2018, 13:07
The real worry is that clients (or more specifically, their HR numpties) may just decide it's not worth the aggro hiring contractors. A decent part of our "value" was in the fact that all HR had to do was phone an agency, and the rest took care of itself. Now they have to fill in a questionnaire which none of them understand, how well do you think it's all going to work out?

For those who are genuinely outside it'll be fine. I reckon (hope).
Remember that the finance bill that brought in the changes to the PS explicitly ruled out blanket assessments either way. And that is why there are ongoing battles being fought.

One thing private clients WON'T want is to be taken to court by contractors who they blanket assess. Public sector people aren't bothered by that as it's not their department.

Lance
30th October 2018, 13:09
No, today was a decision; the announcement was that the PS changes would be rolled out to the private sector on 6 April 2020. However, there is a consultation (to come) on the precise details of that rollout. One obvious difference is that there's a threshold for application in the private sector (i.e. the PSC will remain responsible when their client is a small company in "roughly" the same terms as the Companies Act 2006, otherwise it will be the client's responsibility to determine status).

What you say might be true but it is speculation.

Let's see what the finance bill 2018 says. And if nothing then we need to wait till the finance bill 2019.

jamesbrown
30th October 2018, 13:42
What you say might be true but it is speculation.

Let's see what the finance bill 2018 says. And if nothing then we need to wait till the finance bill 2019.

Eh? What is speculation? Also, not sure what you mean by Finance Bill 2018 and 2019.

They've already said what will happen. Detailed consultation in the coming months to inform the draft Finance Bill in summer 2019 for the subsequent tax year, when it will take effect.


The government announced at Budget 2018 that it intends to extend the
reforms to the off-payroll rules. A further consultation on the detailed operation
of the new rules will be published in the coming months. This consultation will
inform the draft Finance Bill legislation, which is expected to be published in
Summer 2019. The new rules will be given effect from 6 April 2020.

smalldog
30th October 2018, 16:15
I do love the contracting is now dead sentiments. Ive been contracting for over twenty years and its the same message every few years and were still here!

For those that dont want to be institutionalised its a way of life no matter what additional tax we end up paying. I dont intend to change my ways, I will be fighting to prove Im not inside. I parachute in, do my bit then parachute out. No long term contracts here and no flicking onto the next thing at clients request. Thats the way I want to stay and on the basis I do specific work packages, cant see the corp intranet, cant attend work functions yada yada I will be fighting hard to prove Im outside.

It will carry on, those that are institutionalised contractors with years at same client to be fair are probably rightly caught.

Yorkie62
31st October 2018, 07:34
I do love the contracting is now dead sentiments. Ive been contracting for over twenty years and its the same message every few years and were still here!

For those that dont want to be institutionalised its a way of life no matter what additional tax we end up paying. I dont intend to change my ways, I will be fighting to prove Im not inside. I parachute in, do my bit then parachute out. No long term contracts here and no flicking onto the next thing at clients request. Thats the way I want to stay and on the basis I do specific work packages, cant see the corp intranet, cant attend work functions yada yada I will be fighting hard to prove Im outside.

It will carry on, those that are institutionalised contractors with years at same client to be fair are probably rightly caught.

You may be right but you could also be swept up as collateral damage. What is scarey is the chatter on LinkedIn at the moment showing a complete lack of understanding of IR35 and the changes to determining tax status.

Hobosapien
31st October 2018, 08:03
You may be right but you could also be swept up as collateral damage. What is scarey is the chatter on LinkedIn at the moment showing a complete lack of understanding of IR35 and the changes to determining tax status.

Yep. You thought agents were clueless about IR35 and they're supposed to be the experts at what they do, wait until you see the HR bods dictating terms. :eyes

smalldog
31st October 2018, 10:37
You may be right but you could also be swept up as collateral damage. What is scarey is the chatter on LinkedIn at the moment showing a complete lack of understanding of IR35 and the changes to determining tax status.

Indeed I could and am prepared for it. Would it make me go permie?? not a chance as I said previously, its a life choice not a tax one and to me thats why a lot of people contract.

northernladuk
31st October 2018, 10:44
Indeed I could and am prepared for it. Would it make me go permie?? not a chance as I said previously, its a life choice not a tax one and to me thats why a lot of people contract.

Absolutely. I hope all the nay says that are posting the end of contracting threads put their money where their mouths are and bugger off to permie land asap and leave the rest to us that want to be here.

smalldog
31st October 2018, 10:52
Absolutely. I hope all the nay says that are posting the end of contracting threads put their money where their mouths are and bugger off to permie land asap and leave the rest to us that want to be here.

WHS!

perplexed
31st October 2018, 10:58
I'm thinking this could hit Public sector even further.

PS get contractors in through consultancy - engagement with private sector entity, so outside IR35 rght?

IR35 PS changes then apply to private sector, that route will therefore be hit should consultancy not be deemed small.

As others have said, it's not the end of contracting.

simes
31st October 2018, 11:52
I'm thinking this could hit Public sector even further.

PS get contractors in through consultancy - engagement with private sector entity, so outside IR35 rght?

IR35 PS changes then apply to private sector, that route will therefore be hit should consultancy not be deemed small.

As others have said, it's not the end of contracting.

Do people realise that the acronym PS applies to both Private Sector and Public Sector? Or am I missing some magic somewhere?

gables
31st October 2018, 12:01
I'm thinking this could hit Public sector even further.

PS get contractors in through consultancy - engagement with private sector entity, so outside IR35 rght?

IR35 PS changes then apply to private sector, that route will therefore be hit should consultancy not be deemed small.

As others have said, it's not the end of contracting.

Not automatically, the only difference is who determines IR35 status. If IR35 applies, it applies; I'll bet many PS ;-) contractors are not applying it to themselves.


Do people realise that the acronym PS applies to both Private Sector and Public Sector? Or am I missing some magic somewhere?

It's a good point :-)

smalldog
31st October 2018, 13:17
Absolutely. I hope all the nay says that are posting the end of contracting threads put their money where their mouths are and bugger off to permie land asap and leave the rest to us that want to be here.

actually the outcome of them going permie would be to shrink the available workforce maybe pushing up rates (supply/demand) off setting this whole debacle. well i can dream! :-)

Scotslaw
31st October 2018, 13:38
Since a large proportion of private sector contracts are sourced through agencies, this will have a significant impact on the way the agency model works.
Currently most boiler plate contracts have IR35-friendly clauses (e.g. around substitution) baked in. I believe that the reform will force agencies to make their contracts with both clients and contractor ltds more exacting.
I anticipate that day to day working models will need to tighten up as well.
I don't think fixed price contracts will immediately replace T&M ones. Clients who want flexibility and don't want to pay the big consultancy premiums, will find a way to make it work.

I have already contacted the agency I'm contracting through at the moment, to see what sort of changes they are planning to contracts and T&Cs.


But what if HMRC's IR35 ambitions don't end with private sector reform.
Consultancies do T&M work alongside fixed price projects. Most IT consulting engagements tend to be staff augmentation at a set day rate. This is a legitimate industry and a well-established business model. A single person outfit working inside IR35 is essentially the same thing on a micro scale. Will they be next in the HMRC's cross hairs?
Doing work classed as inside-IR35 could, in theory, be treated the same, whether the person doing it is an independent contractor or employed by a large consultancy. Would HMRC go after consultancy employees next, for work carried out on T&M arrangements? Make them liable for taxes on the day rate their employer charges the client for their time?
If this were to happen, this may not just drive work away from one person outfits to big consultancies, but may eventually end flexible working altogether.

WordIsBond
31st October 2018, 14:24
Would HMRC go after consultancy employees next, for work carried out on T&M arrangements? Make them liable for taxes on the day rate their employer charges the client for their time?
You do realise that the deemed payment under IR35 is based on what comes through to the PSC, not what the client pays the agency, right? Consultancy employees would never be liable for taxes on the amount paid to their employer. That would be like contractors being liable for taxes on the amount paid to the agency.

Not even Korbyn & Kompany would be stupid enough to do that.

Scotslaw
31st October 2018, 14:43
You do realise that the deemed payment under IR35 is based on what comes through to the PSC, not what the client pays the agency, right? Consultancy employees would never be liable for taxes on the amount paid to their employer. That would be like contractors being liable for taxes on the amount paid to the agency.

Not even Korbyn & Kompany would be stupid enough to do that.

In principle, the question is of payment received by an employer of an employee working within IR35 (whether PSC or consultancy) for services provided as a part of an arrangement deemed within IR35.
But to explore this point further, let's consider a case where the PSC contracts directly with the client rather than through an agency. Would identical IR35 treatment be warranted in such cases?

For cases where a PSC contracts through an agency acting as an intermediary, HMRC effectively ignore the agency and their fees for the purpose of IR35 assessment. So the agency involvement is a red herring in this scenario.

WordIsBond
31st October 2018, 14:59
PSC revenue is used for deemed payment because the disguised employee owns and controls the PSC.

If they don't own and control the consultancy, the amount of consultancy revenue over and above their salary is not theirs and so they won't be taxed on it. In that respect, the agency revenue over and above the PSC revenue is a very good comparison. You don't get taxed on money which is paid by the end client but does not come under your control. It's an absurd idea.

Scotslaw
31st October 2018, 15:15
PSC revenue is used for deemed payment because the disguised employee owns and controls the PSC.

If they don't own and control the consultancy, the amount of consultancy revenue over and above their salary is not theirs and so they won't be taxed on it. In that respect, the agency revenue over and above the PSC revenue is a very good comparison. You don't get taxed on money which is paid by the end client but does not come under your control. It's an absurd idea.

Ah - hadn't thought about how much of the employer's earnings makes its way back to the employee. That makes sense.
That being the case, I guess in the worst case scenario, flexible workforce will have a backstop in the form of consultancies.

WordIsBond
31st October 2018, 17:09
That being the case, I guess in the worst case scenario, flexible workforce will have a backstop in the form of consultancies.
Three backstops:
1. Consultancies.
2. Contractors using umbrellas.
3. Contractors operating through a PSC inside IR35.

If everyone were inside IR35, I'd still want to be independent. I don't do what I do for the tax benefits. I only want to fight to keep the tax benefits as a matter of fairness. I totally reject the nonsense that contractors who don't have employment rights should be taxed the same as employees. That's not fair even if we do the exact same job, whatever HMRC might claim.

But even if I had to pay that extra tax, I'd keep doing what I'm doing. In my case, though, I'd also probably mostly refuse to take on UK clients and just stick to foreign clients, unless the UK clients were going to eat at least part of the tax hit. If they want to put me inside IR35, they can pay for the privilege.

amrhady
31st October 2018, 21:57
The demand for contractors should still be there when the new rules apply. Business are always trying to grow and the corresponding work exists, will be created, and will need to get done.

One scenario being mentioned is that businesses find it too much of a hassle to hire a contractor - apparently the reason being they need to do IR35 assessment and potentially PAYE. This point doesn't seem valid as by this logic, it would be much more hassle and less cost effective to hire a permie. Also it doesn't make sense to hire a permanent employee if you only need a resource/skill for a few month. Even with the new rules, business are better off hiring a contractor if that's what the work/project requires.

A more optimistic scenario is for rates to go up to accommodate - to some extent - for the extra taxes. The reasoning here is that, if those companies assessing their contractors inside-IR35, whether lawfully or unlawfully, do not push their rates up, contractor will be financially better off doing a cheaper outside-ir35 contract. So should some companies assess/offer mostly inside-IR35 contracts, they would have to increase their rates if they are keen on maintaining the same skill and talent level.

The former is obviously based on the assumption that there will exist a reasonable amount of outside-IR35 work to give contractors an alternative. Small companies will make up reasonable amount of that outside-IR35 work.

A more pessimistic scenario is that most contract work ends up being inside-IR35, which ends up being less income for contractors - yet still no institutionalisation, and we would still maintain the same style of gig work.

I also think that in the previous scenario, a considerable number of contractors will try and switch to permanent employment . If successful, this will obviously decrease the contractor supply and might end up being a good thing for those of us who want to keep contracting.

Bottomline, business as usual.

mudskipper
1st November 2018, 07:13
From Anne Redstone's budget analysis (worth a read if you're an IPSE member) the definition of small business from the Companies Act will be used - broadly speaking, this is a company which meets two or more of the following conditions:

• Its turnover must be no more than £10.2m
• Its balance sheet assets must be no more than 5.1m
• It must have no more than 50 employees

edison
6th November 2018, 22:08
also think that in the previous scenario, a considerable number of contractors will try and switch to permanent employment . If successful, this will obviously decrease the contractor supply and might end up being a good thing for those of us who want to keep contracting.



I think a significant proportion of contractors could struggle to convert to permie. On the supply side, adapting to a permie employee culture may be challenging.

The demand for skills seems to be becoming ever more polarised. Skills like architecture and security seem to be perennially in demand and command very good day rates/salaries. Alongside growing areas like cloud, big data, AI etc, these are likely to have more more permanent opportunities. I fear longer term for more commoditised roles such as testing.

Also, IT organisations are looking for more than just technical skills, inter-personal skills are becoming more important. Lots of organisations are struggling to find good people with both sets of skills. Permie recruiters are also becoming more demanding in terms of overall skills and experience.

The associate consulting model seems to be growing and I suspect this is where a good proportion of the better more experienced contractors will end up if PSC outside IR35 contracts start dwindling.

d000hg
9th November 2018, 11:31
My god the comments on here! most will be in an ir35 contract even though they are not.. just look at the public sector. They will not raise rates as most are penny a pound.

It doesn't matter if your contract is out. When it rolls through most will be passed as in due to risk so it's out of your hand.If you're a "penny a pound" contractor then you're nothing special. Take the hit or get a job.


Personally I think 90% of current IT contractors will be classified as inside IR35 by big clients (forced by their risk / human remains depts).

To me this marks the effective end of meaningful IT contracting in the UK.

Thankfully I should be retired by then. :smileMaybe there are 90% more contractors then there should be. Lots of contractors on multi-year contracts could just be employees. It's probably very naive but maybe if companies can't rely on lazily hiring contractors they'll have to actually value their employees.

Hobosapien
12th November 2018, 09:09
Those over 40 (or soon will be) thinking of sucking it up and working inside IR35, look forward to higher NI payments as you cover both the employer and employee portions of a highly likely 'age tax'. :eyes

https://www.dailymail.co.uk/news/article-6376191/Health-Minister-Matt-Hancock-considers-age-tax-40s.html


The middle-aged and over 65s may soon be taxed to cover the cost of their later life care if proposals are given the go ahead.


It has been proposed by two Commons committees, the chair of one has said the premium must be compulsory otherwise 'it wouldn't be done'.


Under the committees' proposals for a 'social care premium' employees and employers would split contributions, with tax levied through a new mechanism or added to the existing National Insurance scheme.

In Germany, an adult earning a £27,000 salary pays about £675 a year, while those on £50,000 pay up to £1,250 according to The Sunday Times.


Will soon pay more to become full permie with all the genuine employee benefits factored in, not fake permie where they offload the employer taxes onto you but none of the benefits. :suicide:

JohntheBike
30th November 2018, 14:53
"nor the law on the status"

HMRC are ignoring case law on employment status by assuming there is MOO for every engagement.

NorthWestPerm2Contr
30th November 2018, 16:49
I currently have 2 clients simultaneously. One of them has just come to me and said they need to discuss IR35 legislation and putting me onto PAYE.... They have been advised by their accountant to put me onto the payroll :spank:

saptastic
30th November 2018, 17:16
I currently have 2 clients simultaneously. One of them has just come to me and said they need to discuss IR35 legislation and putting me onto PAYE.... They have been advised by their accountant to put me onto the payroll :spank:

Have they said why? Is it private sector?

Hobosapien
1st December 2018, 08:37
:suicide: Numpty clients and their accountants are why the IR35 battle will always be a fight you didn't even think you were in.

Needs proper b2b contracts where your company and not you as an individual are named as the supplier. They can't put a company on the payroll though some may try.

Avoid it by changing your name to 'Fred Bloggs Ltd' that happens to be same name as your Ltd. :smokin

NorthWestPerm2Contr
1st December 2018, 19:30
Have they said why? Is it private sector?

yes they are private sector. They don't want to take the risk, that's all it comes down to..... I'll be saying something about that if it comes to it. Luckily I've been working on plan B now for a solid 2 years and hopefully within 6 months can go full time on it. Screw contracting. Government did enough damage with the dividend tax and this is an additional step too far. I hope they enjoy losing all their tech talent in just over a year's time.

Hobosapien
3rd December 2018, 08:08
Luckily I've been working on plan B now for a solid 2 years and hopefully within 6 months can go full time on it. Screw contracting. Government did enough damage with the dividend tax and this is an additional step too far. I hope they enjoy losing all their tech talent in just over a year's time.


Good for you. We all need a plan B and there's still time to get one up and running before the 'inevitable' implementation of public sector IR35 rules in the private sector. :eyes

Maybe there are some plan B's that are too ambitious for one and could do with a pool of CUK contractors to chip in.

Maybe it's time for a CUK Consultancy Service where proper b2b contracts allow easy substitution of available contractors assessed to have the necessary skills, and operates as a union to protect our rights, and also monopolise the market by reducing the number of contractors available freelance. Bonus being more crappy agencies would be frozen out into obsolescence. What's not to like? :smokin

JohnM
4th December 2018, 10:16
Not sure why everyone is getting so upset about this. At the end of the day contract resource is essential for IT businesses, given the nature of IT projects etc. You name me a digital agency that could function efficiently without contractors

All that will happen is contracts and ways of working will be changed to make them outside the IR35. Yes some big companies may implement the blanket approach the public sector have taken and try and insist all contracts will be inside but then just don't work for these companies, they will soon fall back into line when they can't get good quality resource for projects and it starts costing them money.

A lot of contractors will go permanent over the next 18 months, this may actually be a positive with competition for assignments decreasing and rates going up.

Companies will need good contractors and will do whatever they need to do in order to get them, don't worry, nothing in effect has changed. Contracts will be rewritten as fixed fee's rather than day rates with money paid per day, you will always use your own equipment and there will be a lot more working from home these are just three of the more obvious changes however the statement earlier in this thread that 90% of contractors will be inside is just plain ridiculous

I wouldn't be surprised if it was at least 50/60% of contractors remaining outside truth be told, they all have 18 months now to reword contracts and ways of working

Old Greg
9th December 2018, 09:59
In other EU nations you seem to see small Co-op entities (companies?) where a bunch of guys band together in a loose sense - they can work independently.

I think this is impractical in the UK as it ends up utilising alphabet shares and such dodgy things... how do they make it work in other countries (e.g. Sweden)?

Sorry for the late response. I am looking at this in Ireland. It is possible because it is disadvantageous to take the CT + divis route. It is also not worth leaving money in company at year end. Instead a director with a controlling interest can pay the equivalent of Class whatever (self employed NIC) instead of employers and employees NIC. You can therefore eat what you kill and take contract income as salary without messing about with alphabet shares.

RobScott
12th December 2018, 20:28
I think it is a good thing!
Contractor will get betters rates since firms still will not add permanent employees due to over heads and labour law.
Atleast we can make money without worrying about Taxman

Being outside IR35 and the pressure everyday of being sent a notice by HMRC is a pain and increase BP and Diabetes risk ... health is wealth

RobScott
12th December 2018, 20:31
will the taxman look at last 10 years once we moved from Permanent to Contract?

northernladuk
12th December 2018, 20:31
I think it is a good thing!
Contractor will get betters rates since firms still will not add permanent employees due to over heads and labour law.
Atleast we can make money without worrying about Taxman

Being outside IR35 and the pressure everyday of being sent a notice by HMRC is a pain and increase BP and Diabetes risk ... health is wealth

Can we ban this tedious sockie please?

BR14
12th December 2018, 20:32
I think it is a good thing!
Contractor will get betters rates since firms still will not add permanent employees due to over heads and labour law.
Atleast we can make money without worrying about Taxman

Being outside IR35 and the pressure everyday of being sent a notice by HMRC is a pain and increase BP and Diabetes risk ... health is wealth

WTF?? :eek

cojak
12th December 2018, 21:20
I think it is a good thing!
Contractor will get betters rates since firms still will not add permanent employees due to over heads and labour law.
Atleast we can make money without worrying about Taxman

Being outside IR35 and the pressure everyday of being sent a notice by HMRC is a pain and increase BP and Diabetes risk ... health is wealth

One warning given.

cojak
12th December 2018, 21:21
will the taxman look at last 10 years once we moved from Permanent to Contract?

This makes no sense.