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  1. #11

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    I suspect that writing the obituary to contracting is premature.

    Yes, some larger hirers will cease taking on contractors for a period. How long? I think a couple of years.

    In that time the balance between getting people in to do the urgent, then the important, then the routine tasks will become known and they will see that the IR35 cases are going in a certain direction and/or they will change their working practices to suit a SOW approach.

    In the meantime, contractors will either go to smaller outfits and/or umbrella and/or permie at least whilst the dust settles.

    In a couple of years (from April 20), confidence will return and we will see a pick up in contracting numbers as both sides of the equation start to see benefits.

    Agencies may try to convert to consultancies. Beware. That is a lot harder than changing a letterhead and I suspect HMRC is already lining them up.

    We will see new ways to reduce the tax "burden". This is more difficult as often the lure of an additional few percent is such that you give in to temptation. Don't.

    In 2 years we will see numbers pick up, but we will never be where we are now.
    Best Forum Adviser & Forum Personality of the Year 2018.

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  2. #12

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    Quote Originally Posted by webberg View Post
    I suspect that writing the obituary to contracting is premature.

    Yes, some larger hirers will cease taking on contractors for a period. How long? I think a couple of years.

    In that time the balance between getting people in to do the urgent, then the important, then the routine tasks will become known and they will see that the IR35 cases are going in a certain direction and/or they will change their working practices to suit a SOW approach.

    In the meantime, contractors will either go to smaller outfits and/or umbrella and/or permie at least whilst the dust settles.

    In a couple of years (from April 20), confidence will return and we will see a pick up in contracting numbers as both sides of the equation start to see benefits.

    Agencies may try to convert to consultancies. Beware. That is a lot harder than changing a letterhead and I suspect HMRC is already lining them up.

    We will see new ways to reduce the tax "burden". This is more difficult as often the lure of an additional few percent is such that you give in to temptation. Don't.

    In 2 years we will see numbers pick up, but we will never be where we are now.
    That's a good point you make about work that is urgent/important. Organisations will still need to find a way to do a lot of that in the short term. There's stuff to do for regulatory reasons, keeping the lights on etc which in many places is the bulk of IT work.

    I spoke to an IT Director I know yesterday who told me that he's aware of quite a number of large organisations that simply can't survive for very long without contractors as they've become so heavily reliant on them.

    I agree with you in a couple of years the dust will have settled but things will never be the same.

  3. #13

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    Quote Originally Posted by edison View Post
    I spoke to an IT Director I know yesterday who told me that he's aware of quite a number of large organisations that simply can't survive for very long without contractors as they've become so heavily reliant on them.
    I could almost guarantee that every IT Director will tell you this, that others will have this problem, but never them. The guy across the road that they're pointing the finger at is pointing a finger their way.

    Life will go on. I agree that it'll be bumpy for a year or two and then things will settle down. It will be a different market at that time though.

  4. #14

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    Quote Originally Posted by Paralytic View Post
    We all like to believe we are indispensable to companies, that things will fall apart without us there, but that rarely happens. Yes, things might take longer to deliver, it might cost clients more £££s as they make contingency plans, but I've seen many occasions where companies have contractor-culls or hiring freezes at critical moments in projects, and the world goes on.

    There is often the hope for Schadenfreude at play.
    I'm not saying that we are indispensable but this will be a bonfire of budget cash just as the business-cycle moves into recession.

  5. #15

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    Quote Originally Posted by TwoWolves View Post
    I'm not saying that we are indispensable but this will be a bonfire of budget cash just as the business-cycle moves into recession.
    I really don't think it will be. I believe clients will simply focus on regulatory/must have projects with a reduced set of resources until the market sorts itself out.

  6. #16

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    Quote Originally Posted by webberg View Post
    I suspect that writing the obituary to contracting is premature.

    Yes, some larger hirers will cease taking on contractors for a period. How long? I think a couple of years.

    In that time the balance between getting people in to do the urgent, then the important, then the routine tasks will become known and they will see that the IR35 cases are going in a certain direction and/or they will change their working practices to suit a SOW approach.

    In the meantime, contractors will either go to smaller outfits and/or umbrella and/or permie at least whilst the dust settles.

    In a couple of years (from April 20), confidence will return and we will see a pick up in contracting numbers as both sides of the equation start to see benefits.

    Agencies may try to convert to consultancies. Beware. That is a lot harder than changing a letterhead and I suspect HMRC is already lining them up.

    We will see new ways to reduce the tax "burden". This is more difficult as often the lure of an additional few percent is such that you give in to temptation. Don't.

    In 2 years we will see numbers pick up, but we will never be where we are now.
    Agreed, I really can't see agencies being able to convert to true consultancies in any meaningful way. Managing a recruitment company and a consultancy are completely different service propositions.

    Before my contracting days, I worked for one of the largest consultancies in the UK and also a small niche one. Selling high value consulting work is tough and starting a consulting firm is even harder. What the recruitment agencies might offer isn't going to be able to compete with a proper consultancy operation.

  7. #17

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    Quote Originally Posted by edison View Post
    Before my contracting days, I worked for one of the largest consultancies in the UK and also a small niche one. Selling high value consulting work is tough and starting a consulting firm is even harder. What the recruitment agencies might offer isn't going to be able to compete with a proper consultancy operation.
    I suspect what the agencies will try to do is set up a subsidiary as a "consultancy", create contracts with their current end-clients as service contracts (so the agency/consultancy will claim they can make the IR35 determinations) and then indemnify themselves via their contract with contractors who will take the risk if HMRC does come calling in future.

  8. #18

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    Quote Originally Posted by webberg View Post
    I suspect that writing the obituary to contracting is premature.

    Yes, some larger hirers will cease taking on contractors for a period. How long? I think a couple of years.

    In that time the balance between getting people in to do the urgent, then the important, then the routine tasks will become known and they will see that the IR35 cases are going in a certain direction and/or they will change their working practices to suit a SOW approach.

    In the meantime, contractors will either go to smaller outfits and/or umbrella and/or permie at least whilst the dust settles.

    In a couple of years (from April 20), confidence will return and we will see a pick up in contracting numbers as both sides of the equation start to see benefits.

    Agencies may try to convert to consultancies. Beware. That is a lot harder than changing a letterhead and I suspect HMRC is already lining them up.

    We will see new ways to reduce the tax "burden". This is more difficult as often the lure of an additional few percent is such that you give in to temptation. Don't.

    In 2 years we will see numbers pick up, but we will never be where we are now.
    This guy imo is one of the, if not the most informed and intelligent posters here. 100% agree.

    You only need 1 contract at a time. Either back your ability to get contracts or don’t for the next couple of years.

  9. #19

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    Quote Originally Posted by BABABlackSheep View Post
    This guy imo is one of the, if not the most informed and intelligent posters here. 100% agree.

    You only need 1 contract at a time. Either back your ability to get contracts or don’t for the next couple of years.
    This guy imo is one of the, if not the most informed and intelligent posters here
    you will always find someone who would not agree.

  10. #20

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    Quote Originally Posted by Paralytic View Post
    I suspect what the agencies will try to do is set up a subsidiary as a "consultancy", create contracts with their current end-clients as service contracts (so the agency/consultancy will claim they can make the IR35 determinations) and then indemnify themselves via their contract with contractors who will take the risk if HMRC does come calling in future.
    That indemnity isn't worth the paper it's written on. The Agency has a legal liability and if they set up properly a legal responsibility to assess. HMRC will recover from them. They can then try to recover this loss from the contractor, there are a number of hurdles. The loss would have to be caused in some way by the contractor and not by the Agency. As the Agency is responsible for assessment and has presumably gotten this wrong it would be a stretch. Add to the mix the likelihood of the contractor still existing and having assets to enable payment plus the general inconvenience of legal action and any Agency relying on that is building their house on sand in my view.

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