My accountants are suffering due ot the April 2020 reforms My accountants are suffering due ot the April 2020 reforms
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  1. #1

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    Default My accountants are suffering due ot the April 2020 reforms

    Just been on the phone to my accountant. It's a small firm, just 2 chartered accountants and a team of assistants. These guys are very good at what they do and I have been with them for a very long time.

    He told me they've lost 15 contractors from their books in the past month, because the contractors' clients have changed policy due to the April 2020 reforms, i.e. no more contractors.

    This of course echoes everything we've heard. Everything that the government is choosing to ignore.

    15 clients lost is a big deal to any small firm. He knows this is just the beginning and the trickle will soon turn into a flood as more corporations turf out contractors. He will adapt by closing his business, or at least the IT side of it. The result is of course more job losses.

    And accountancy firms aren't the only peripheral businesses to suffer due to the reforms. Agencies will become defunct. Insurance companies will lose vast amounts of business. IPSE won't have anything to complain about.

    I know you guys know all this, but I felt the need to write because I genuinely had sorrow in my heart for my accountant. He couldn't understand why I was so calm - I am calm because I've been in IT too long and have seen a lot of sh1t happen, including the Loan Charge. April 2020 is just another date to me and I will move on, or move out, whatever.

    I just want to be sure that everyone - IT Contractors, Accountants, IoD, Qdos, IPSE, Umbrellas, everyone - is telling the government that they are so very wrong on the reforms. Some are, but it doesn't feel like a lot are. Of course, the banks don't care and never did (I learned that that hard way many years ago). But the rest, surely they need to speak up, and not just by writing a mediocrely worded letter to their MPs.

    There are hundreds of other businesses out there that will have to make many many thousands of people redundant once the IT contracting model shuts down.

    Why aren't we hearing a whole heap more noise from them?

  2. #2

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    Quote Originally Posted by ChimpMaster View Post
    Why aren't we hearing a whole heap more noise from them?
    The politicians don't care - right now they're worried about their own jobs and futures; many are leaving as we speak. The system is broken....very broken.

    The big companies holding all the power (i.e. the big banks, law firms, etc) couldn't give a toss like you say. They'll just offshore their IT staff and put non-essential projects on hold if need be; the fat cats making the decisions at these firms will still pocket their hugely inflated pay checks and bonuses. To them it's like checkout staff at a supermarket they run complaining about losing their jobs to the self-checkout machines. It makes not one bit of difference.

    Everyone...as in many many many thousands of people are about to go into a very bumpy ride. If HMRC starts picking off small-fry limited companies at the same time then there's going to be a LOT of very unhappy people.

    They are literally killing off competition, small companies, innovation, morale, livelihoods and everything connected through the chain as you said. It's not just IT. It's engineering, hospitality, recruitment, accountancy and much more.

    I often ask myself how one gets to a stage of employing staff to help out one day and grow if all the government is going to do is make us little guys lives super hard. You expect me to work a permanent job and out of no-where start employing people from a company I have...not going to happen. You allow contracting, they will eventually become employers themselves one day; I'm sure many are right now among the one man bands.

    A simple change is all that is needed; something like you are deemed outside IR35 for up to 2 years. If you continue beyond this then you will be considered as a permanent member of staff and back-taxes would be owed. This would enable the real need to bring in specialist flexible workforce for projects and at the same time not allow large firms to take the mick and run their entire business off of this type of resource; people will know they have to move on as that deadline approaches and it keeps the cycle moving in a healthy way. Unfortunately this change is a big STOP sign. It kills off everything and all that relies of this type of work.

    I agree with you 100%. It's extremely bad; which is why I get so angry at clueless people (usually hard left types) that say stuff like "good...pay your tax you tax dodgers". They have no idea how it all connects, flows and the fact we do pay what is owed; every penny.

    Buckle yourself in chap. It's going to get messy
    Last edited by Anubis; 31st October 2019 at 16:43.

  3. #3

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    Wonder what the private equity firm that bought SJD Accountancy for £70m are thinking now?

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    Hehe, it's nice to see some sympathy for the accountants re all this, I imagine most contractors have a view on us!

    We're certainly gearing up for a rough 12 months ahead, though we haven't seen too much direct impact yet. Currently still taking on more clients than we're losing each month. We do expect that to reverse for a while though, think it's just that as of right now many clients are still in the thinking/weighing up options stage. We've been stockpiling reserves over the last year or so, and have taken on two new staff in the last couple of months...as whilst we expect it to be painful, at least in the short term it's going to be more work for us dealing with all the de-registrations/tidy ups etc.

    I don't know how many clients your accountant has...but given it sounds like they've perhaps got half a dozen staff in total, I'd anticipate number of clients would be well into the hundreds. So whilst 15 may be a bit upsetting, it shouldn't be too devastating. I appreciate if it's 15 lost this month, 20 next month, 25 the following etc then it could be a different story.

    Ignoring my own personal interests, whilst I think IR35 is rubbish (as so grey), if they're going to stick with it, I do feel this change makes sense. Hopefully after any initial (over)reaction things will settle down. I imagine the market will drift towards two types of contractors, with two very different contracts/working practices to match.

  5. #5

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    Quote Originally Posted by edison View Post
    Wonder what the private equity firm that bought SJD Accountancy for £70m are thinking now?
    Been wondering this for a while.

  6. #6

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    Default My accountants are suffering due ot the April 2020 reforms

    Quote Originally Posted by ChimpMaster View Post
    Just been on the phone to my accountant. It's a small firm, just 2 chartered accountants and a team of assistants. These guys are very good at what they do and I have been with them for a very long time.

    He told me they've lost 15 contractors from their books in the past month, because the contractors' clients have changed policy due to the April 2020 reforms, i.e. no more contractors.

    This of course echoes everything we've heard. Everything that the government is choosing to ignore.

    15 clients lost is a big deal to any small firm. He knows this is just the beginning and the trickle will soon turn into a flood as more corporations turf out contractors. He will adapt by closing his business, or at least the IT side of it. The result is of course more job losses.

    And accountancy firms aren't the only peripheral businesses to suffer due to the reforms. Agencies will become defunct. Insurance companies will lose vast amounts of business. IPSE won't have anything to complain about.

    I know you guys know all this, but I felt the need to write because I genuinely had sorrow in my heart for my accountant. He couldn't understand why I was so calm - I am calm because I've been in IT too long and have seen a lot of sh1t happen, including the Loan Charge. April 2020 is just another date to me and I will move on, or move out, whatever.

    I just want to be sure that everyone - IT Contractors, Accountants, IoD, Qdos, IPSE, Umbrellas, everyone - is telling the government that they are so very wrong on the reforms. Some are, but it doesn't feel like a lot are. Of course, the banks don't care and never did (I learned that that hard way many years ago). But the rest, surely they need to speak up, and not just by writing a mediocrely worded letter to their MPs.

    There are hundreds of other businesses out there that will have to make many many thousands of people redundant once the IT contracting model shuts down.

    Why aren't we hearing a whole heap more noise from them?
    Have you met your MP face to face about this?

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  7. #7

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    HMRC have been on the up and up for years. No-one did anything. Until HMRC came for them.

    You reap what you sow.

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    I think I've said before that we we will see a contraction of the number of contractors for a couple of years and then a slow recovery.

    My hope is that the recovery will not be fueled by the next generation of tax avoidance schemes.

    Whilst we will do our best to point out such instances we become aware of, clearly we will be emulating Canute to a large degree.

    I was told in a management course once that groups, form, storm, norm and reform to go again.

    Seems to me that 20 years after IR35 (surely the most ill considered and hopeless finger in the dyke legislation ever seen in tax) we are at the "reform" and the cycle will begin again with "storm" which is why we fear contractors will get tempted by tax avoidance.
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  9. #9

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    Quote Originally Posted by webberg View Post
    I think I've said before that we we will see a contraction of the number of contractors for a couple of years and then a slow recovery.

    My hope is that the recovery will not be fueled by the next generation of tax avoidance schemes.

    Whilst we will do our best to point out such instances we become aware of, clearly we will be emulating Canute to a large degree.

    I was told in a management course once that groups, form, storm, norm and reform to go again.

    Seems to me that 20 years after IR35 (surely the most ill considered and hopeless finger in the dyke legislation ever seen in tax) we are at the "reform" and the cycle will begin again with "storm" which is why we fear contractors will get tempted by tax avoidance.
    Quote Originally Posted by cojak View Post
    Let's put it this way - I WILL be asking Admin to set up an 'HMRC IR35 Enquiries' sub-forum next year, because I know what contractors are like.

  10. #10

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    Quote Originally Posted by BrilloPad View Post
    HMRC have been on the up and up for years. No-one did anything. Until HMRC came for them.

    You reap what you sow.
    Martin Niemöller

    and I've been saying this for years. There hasn't been anything like enough resistance from any organisation that might have been in a position to affect the issues. I have been widely condemned for my resistance, but I at least had a go at challenging the system.

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