Nobody wants to make that first move

[TwoWolves]

I've been phoning/emailing around former colleagues who are still contracting to see what's going on with their existing contracts. Everyone I contact, and this includes myself is finding themselves "awaiting a decision" from the client for their IR35 status come April.

It really looks like everyone is wanting to see what everyone else does before taking a definitive stand; they want to keep their cream contractors (don't believe what you read in the press, only the dross get the boot) but they don't want a target painted on their heads either. It really is a mess but I've never seen clients so fearful and it comes just as the IT industry in the UK was humming along. I have spoken with two US companies this year who were opening offices here because 1) the pound is so low and 2) the IT industry is highly competent.

Let's see if anyone blinks first.

[Unix]

I've been phoning/emailing around former colleagues who are still contracting to see what's going on with their existing contracts. Everyone I contact, and this includes myself is finding themselves "awaiting a decision" from the client for their IR35 status come April.

It really looks like everyone is wanting to see what everyone else does before taking a definitive stand; they want to keep their cream contractors (don't believe what you read in the press, only the dross get the boot) but they don't want a target painted on their heads either. It really is a mess but I've never seen clients so fearful and it comes just as the IT industry in the UK was humming along. I have spoken with two US companies this year who were opening offices here because 1) the pound is so low and 2) the IT industry is highly competent.

Let's see if anyone blinks first.

Agree, clients will make side deals with the rock stars and let the dregs go or make them pseudo permies.

[TwoWolves]

I was contacted on Sunday by a former colleague (banking), he was pretty angry/upset.

All contractors are to be put under an umbrella and go PAYE. There will be a rate uplift in order to retain the best talent but as yet they don't know how much that will be.

It's starting to look like this will be the way things are going. Nevertheless I think anyone who is prepared to rule their contractors outside will get a stampede of talent that they can pick and chose from.

[webberg]

Nevertheless I think anyone who is prepared to rule their contractors outside will get a stampede of talent that they can pick and chose from.

This sort of thinking is very dangerous.

A service supplied to a company is always outside.

A role performed in a company may be inside or outside, but you start with determining what is being done and how (and why) and build the contract from that.

A contract or a decision that something is outside, that is not backed by facts, is a recipe for disaster.

[northernladuk]

Let's see if anyone blinks first.

We'll know when it happens because there will be a deluge of 'what do I do now' posts on here.

Got my 'Read the sticky' saved to clipboard ready.

[TwoWolves]

This sort of thinking is very dangerous.

A service supplied to a company is always outside.

A role performed in a company may be inside or outside, but you start with determining what is being done and how (and why) and build the contract from that.

A contract or a decision that something is outside, that is not backed by facts, is a recipe for disaster.

Agreed but clients who use a lot of contract staff don't want the risk associated with making the wrong determination, the whole point of temporary resources is that they are of low risk and can be removed at short notice when projects get canned or market conditions void budgets.

Also determination is quite labour intensive.

Seems likely to me that there will continue to be strong demand for the consultants but this tax ruling will make it hard for the market to provide it. The assumption that everyone will migrate to system houses/contractors is perhaps naïve, they are unattractive propositions for most talent.

[TwoWolves]

I have received second-hand news that my current end-client is likely to view all contractors as "inside" as they don't have the appetite for the risk and HMRC have been quite aggressive.

Everyone is aware of the problem in going outside -> inside so they are likely to see a swathe of project failures and key expertiese leaving. Many of the skills involved are highly specialised. The damage is going to be considerable but I don't know what anyone can do?

I'm personally at a bit of a loss what move to make next.

[BoredBloke]

I have received second-hand news that my current end-client is likely to view all contractors as "inside" as they don't have the appetite for the risk and HMRC have been quite aggressive.

Everyone is aware of the problem in going outside -> inside so they are likely to see a swathe of project failures and key expertiese leaving. Many of the skills involved are highly specialised. The damage is going to be considerable but I don't know what anyone can do?

I'm personally at a bit of a loss what move to make next.

Presumably up to now you have been operating as if you are outside IR35. If your client deems you are inside an you accept then your are leaving yourself open to HMRC looking into your previous contracts with your client and asking why they were not inside also, given that nothing changed other than your IR35 status. I wouldn't risk it. Where I am, they are not even determining your IR35 status, simply banning all ltd company contractors. They are happy to keep contractors on so long as they work through an umbrella. I won't be doing that either!

[Paralytic]

<snip> so they are likely to see a swathe of project failures and key expertiese leaving. Many of the skills involved are highly specialised. The damage is going to be considerable but I don't know what anyone can do?

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.

[simes]

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.

Agreed.

And, if contracting really does totally die (worst case scenario), then so too do our worlds continue and, with our lives to pay for, we will have to go permie.

The market will inform us what we do next, not the other way around.