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  1. #1

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    I've been interested to follow a few discussions on here about Clients approach, potential impacts and 'solutions' to OPR, I wanted to share my experience from speaking to end clients over the past few months.

    I've now met with c.75% of our client base at least once and I've thus far only spoken to one client who has been 100% that the contractors they're using will be inside IR35 from next year (and they should be inside now).

    There are some clients whose contractors are likely on the edge and every one of them has been comfortable with making some changes to make a clear outside status determination possible.

    I've not spoken to a client who has wanted to use any form of blanket determination (though every client is of the view that contractors in the main will logically have the same status).

    They are consistently saying that contractors are fundamentally valuable and important to the business and they see a robust approach that minimises risk and retains the ability to use contractors as the correct approach.

    This is completely different to the public sector, all of those clients have had a blanket type approach - generally assume they're inside and if it's a problem then re-think that based on the importance of the project.

    I've also seen a difference from enterprise level clients - there is much more fear around the risk from them and a follow the leader type approach where they're all waiting for one another to declare their approach.

    I've seen some comments about agency fees going up or contractor rate being squeezed. I can't speak for every Agency (thank goodness!) but those I speak to are seeing this as an opportunity to help clients continue to engage contractors and to justify the fee, not to increase them.

    I'm not in favour of the changes and I can see some negative impacts but in the main the past couple of months of speaking to clients have left me feeling more positive about the impact.

  2. #2

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    Quote Originally Posted by ComplianceLady View Post
    I've been interested to follow a few discussions on here about Clients approach, potential impacts and 'solutions' to OPR, I wanted to share my experience from speaking to end clients over the past few months.

    I've now met with c.75% of our client base at least once and I've thus far only spoken to one client who has been 100% that the contractors they're using will be inside IR35 from next year (and they should be inside now).

    There are some clients whose contractors are likely on the edge and every one of them has been comfortable with making some changes to make a clear outside status determination possible.

    I've not spoken to a client who has wanted to use any form of blanket determination (though every client is of the view that contractors in the main will logically have the same status).

    They are consistently saying that contractors are fundamentally valuable and important to the business and they see a robust approach that minimises risk and retains the ability to use contractors as the correct approach.

    This is completely different to the public sector, all of those clients have had a blanket type approach - generally assume they're inside and if it's a problem then re-think that based on the importance of the project.

    I've also seen a difference from enterprise level clients - there is much more fear around the risk from them and a follow the leader type approach where they're all waiting for one another to declare their approach.

    I've seen some comments about agency fees going up or contractor rate being squeezed. I can't speak for every Agency (thank goodness!) but those I speak to are seeing this as an opportunity to help clients continue to engage contractors and to justify the fee, not to increase them.

    I'm not in favour of the changes and I can see some negative impacts but in the main the past couple of months of speaking to clients have left me feeling more positive about the impact.
    Given that some industries can directly influence government, e.g. the automotive industry successfully lobbied for twice yearly registration dates, initially changing in January and August, then in March and September as now, I find it surprising that we haven't heard of a concerted approach to HMG by major users of contractors, over these new proposals. One poster here indicated that their client used 300+ contractors, so that client has a major investment which could be seriously affected by the new rules. Have you heard of any such approach in your sphere of interest?

  3. #3

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    Quote Originally Posted by JohntheBike View Post
    Given that some industries can directly influence government, e.g. the automotive industry successfully lobbied for twice yearly registration dates, initially changing in January and August, then in March and September as now, I find it surprising that we haven't heard of a concerted approach to HMG by major users of contractors, over these new proposals. One poster here indicated that their client used 300+ contractors, so that client has a major investment which could be seriously affected by the new rules. Have you heard of any such approach in your sphere of interest?
    In short, no. The end client with wholly inside IR35 contractors is a brand name with upwards of 500 contractors, the view seems to be how do we manage the implementation rather than can we change it.

  4. #4

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    Quote Originally Posted by ComplianceLady View Post
    In short, no. The end client with wholly inside IR35 contractors is a brand name with upwards of 500 contractors, the view seems to be how do we manage the implementation rather than can we change it.
    mmm, thanks.

  5. #5

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    Quote Originally Posted by ComplianceLady View Post
    In short, no. The end client with wholly inside IR35 contractors is a brand name with upwards of 500 contractors, the view seems to be how do we manage the implementation rather than can we change it.
    Does the client, specifically HR, have concerns about Employment Tribunals if they determine an inside position or is this part of the managed implementation?

  6. #6

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    Quote Originally Posted by BlueSharp View Post
    Does the client, specifically HR, have concerns about Employment Tribunals if they determine an inside position or is this part of the managed implementation?
    It's certainly a concern but the primary concern at this point is the potential loss of resource, second is what the cost will be to retain / recruit for the same projects on an inside basis. The risk of ET's is the next concern but it's seen as manageable - the expectation is people will work direct PAYE or umbrella PAYE and so have access to comparable benefits broadly.

    This client has no flex on working arrangements so inside engagements are the reality, the only thing they can so is manage the fall out.

  7. #7

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    Quote Originally Posted by ComplianceLady View Post
    It's certainly a concern but the primary concern at this point is the potential loss of resource, second is what the cost will be to retain / recruit for the same projects on an inside basis. The risk of ET's is the next concern but it's seen as manageable - the expectation is people will work direct PAYE or umbrella PAYE and so have access to comparable benefits broadly.

    This client has no flex on working arrangements so inside engagements are the reality, the only thing they can so is manage the fall out.
    given the opportunity for chaos with large clients, it's surprising that so far we don't seem to have heard about approaches in the smoke rooms of the HoC.

  8. #8

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    Fairly reassuring that they seem to be taking a realistic approach to these things in the private sector. If the public sector really were deciding status on the back of how crucial a project was then I can see problems down the line for them.

  9. #9

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    Interesting.

    Others in the recruitment industry seem to be reporting similar things, but I wonder about the extent to which it's a representative sample, at this stage, or whether the majority of companies that remain ignorant or are otherwise delaying action will ultimately panic and take a blanket approach. I'd expect the companies most keen to sort this early are also most likely to want a sensible compromise, on the whole (the fallout of blanketing would probably require even more preparation time, but some companies will bury their heads, regardless).

  10. #10

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    Quote Originally Posted by ComplianceLady View Post
    In short, no. The end client with wholly inside IR35 contractors is a brand name with upwards of 500 contractors, the view seems to be how do we manage the implementation rather than can we change it.
    do you have any insight into how clients intend to handle RTI and payslips for contractors declared inside IR35 from next April? Are there any signs of a mass move to umbrellas, or any other structure?

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