Next steps on IR35 moot - it's a PSC ban that's the problem

[simes]

Give many large client organisations (mine included - RBS) are side-stepping the IR35 debate by forcing a ban on PSCs, ……….

Are you sure this is true?

Jesse Norman said a couple of days ago that there was no mention or word of any across-the-nation PSC bans...

Seems like a stand-up kinda guy. Square shouldered. Reliable.

[BritishLad88]

Every few hours there's now a story about HMRC and The Treasury being pressured to delay or re-think IR35.

Give many large client organisations (mine included - RBS) are side-stepping the IR35 debate by forcing a ban on PSCs, does anyone here thing that the edge-case likelihood of a delay/repeal of IR35 will make any difference at all?

Isn't the damage done? Does anyone see companies rethinking their PSC bans in the event of a IR35 miracle?

it will make a difference (perhaps a slight one) if and only if there is delay/repeal actually happening. but all of this is just news & noise being thrown up in the various news media. nothing new.

all talk no action. all speculation no resolution.

[WordIsBond]

Every few hours there's now a story about HMRC and The Treasury being pressured to delay or re-think IR35.

Give many large client organisations (mine included - RBS) are side-stepping the IR35 debate by forcing a ban on PSCs, does anyone here thing that the edge-case likelihood of a delay/repeal of IR35 will make any difference at all?

Isn't the damage done? Does anyone see companies rethinking their PSC bans in the event of a IR35 miracle?

I see companies rethinking their PSC bans eventually anyway. Maybe not all of them but they are going to need resources for projects which they can't staff in-house, and the time will come when they'll start to use PSCs again.

If there's a six or twelve month delay, those who have banned will keep the ban until the legislation actually comes into force. But then, internal assessments are going to start to happen as to how we can work around this mess to get the resources we need, and the rethink will happen.

So a delay may actually delay the rethink. No one is going to change their mind now until they actually see what the legislation ends up being, so delay the legislation, you delay the rethink.

But in the unlikely event that the new regime says, 'You know what, this actually isn't Conservative at all. Why are we doing this?' and kills the whole thing, the rethink will start pretty quickly. Within six months, maybe faster, some of these companies that have instituted bans will start to hire contractors again. Within a year, most of them will.

I'm actually not as pessimistic about that last scenario as some others. Javid had to go because he'd been co-opted by the Treasury, which is heavily Remain and significantly of the view that "we have to tax if we are going to spend." In that world, IR35 is more politically palatable than a lot of other taxes.

No. 10 seems to be throwing that off, thus Javid is out. They want to spend and spend without significant tax increases. They are on the Trump model of economics, with tax and spend policies to cause a booming economy and boost asset prices.

If they really do want to raise revenue this 'IR35 reform' will go through (even though it's likely to cost revenue in actual fact). If the war in No. 10-11 indicates they don't care about raising revenue that much, there's plenty of reasons to set this aside.

[BritishLad88]

I see companies rethinking their PSC bans eventually anyway. Maybe not all of them but they are going to need resources for projects which they can't staff in-house, and the time will come when they'll start to use PSCs again.

i see that too companies rethinking their PSC bans but don't think for the reason you state. you're implying that they would run out of resources because everyone will leave but i gather most contractors are staying where they are accepting the cut; well, for time being now anyway, at least until for a few months for the contractors to experience the effect it has.

But in the unlikely event that the new regime says, 'You know what, this actually isn't Conservative at all. Why are we doing this?' and kills the whole thing, the rethink will start pretty quickly. Within six months, maybe faster, some of these companies that have instituted bans will start to hire contractors again. Within a year, most of them will.

Let's hope so.

I'm actually not as pessimistic about that last scenario as some others. Javid had to go because he'd been co-opted by the Treasury, which is heavily Remain and significantly of the view that "we have to tax if we are going to spend." In that world, IR35 is more politically palatable than a lot of other taxes.

No. 10 seems to be throwing that off, thus Javid is out. They want to spend and spend without significant tax increases. They are on the Trump model of economics, with tax and spend policies to cause a booming economy and boost asset prices.

that's a fair point. i had actually not thought of that until right now.
BoJo & Trumpy are best buddies

[ascender]

Even if the government announced there was to be a 12 month review, during which time the new rules were put on hold, why would the majority of companies change anything? The damage has been and its too late for anything like this to make a difference. None of the firms would have any inclination to undo all of the new contracts which have been put in place.

I know at least one of the big banks worked very closely with their preferred agency to look at the legislation and work out how they could put a framework in place which would minimise the impact to them. This happened over a year ago and the answer was..... "nothing".

I think a few people made a good few quid out of that assignment though.

I've not heard of any rate cuts at RBS in a long time - I know quite a few people there and these rumours do seem to start and spread very quickly, the place is like a bunch of old wimmin at a coffee morning when it comes to gossip.

[oliverson]

I see companies rethinking their PSC bans eventually anyway. Maybe not all of them but they are going to need resources for projects which they can't staff in-house, and the time will come when they'll start to use PSCs again.

If there's a six or twelve month delay, those who have banned will keep the ban until the legislation actually comes into force. But then, internal assessments are going to start to happen as to how we can work around this mess to get the resources we need, and the rethink will happen.

So a delay may actually delay the rethink. No one is going to change their mind now until they actually see what the legislation ends up being, so delay the legislation, you delay the rethink.

But in the unlikely event that the new regime says, 'You know what, this actually isn't Conservative at all. Why are we doing this?' and kills the whole thing, the rethink will start pretty quickly. Within six months, maybe faster, some of these companies that have instituted bans will start to hire contractors again. Within a year, most of them will.

I'm actually not as pessimistic about that last scenario as some others. Javid had to go because he'd been co-opted by the Treasury, which is heavily Remain and significantly of the view that "we have to tax if we are going to spend." In that world, IR35 is more politically palatable than a lot of other taxes.

No. 10 seems to be throwing that off, thus Javid is out. They want to spend and spend without significant tax increases. They are on the Trump model of economics, with tax and spend policies to cause a booming economy and boost asset prices.

If they really do want to raise revenue this 'IR35 reform' will go through (even though it's likely to cost revenue in actual fact). If the war in No. 10-11 indicates they don't care about raising revenue that much, there's plenty of reasons to set this aside.

Agree with all of this.

[WordIsBond]

i see that too companies rethinking their PSC bans but don't think for the reason you state. you're implying that they would run out of resources because everyone will leave but i gather most contractors are staying where they are accepting the cut; well, for time being now anyway, at least until for a few months for the contractors to experience the effect it has.

For the current projects, people staying put is fine. What happens when they need to do something which requires specialist skills that they don't have? They'll have to get some specialist in. Oh, dear, he's using a PSC.

It's the specialists that will break the bans. If there are only ten guys in the UK who can do something and they insist on using a PSC, the clients will give in. Once they do, then the ban is broken, and managers will say, 'You gave in to get that guy, why not this guy? Oh, sure, his skills aren't in quite the same demand, but now we know we've made it work.'

The bans will start to slip. That's just the way the world works.

[BritishLad88]

For the current projects, people staying put is fine. What happens when they need to do something which requires specialist skills that they don't have? They'll have to get some specialist in. Oh, dear, he's using a PSC.

The company will just say "sorry, no PSC allowed" because there would be so called "specialist" out there willing to do it via cheaper means. It's a buyers market right now.

Or, the company might not hire new specialist at all. They might ask existing contractors to learn the new "specialist" skills. You might be thinking who on earth as a contractor would oblige to that. well. i can tell that at my current place there are contractors who are willing to that. they are willing to learn the new "specialist" skill even if its not their specialty. Some call these "permietractors".

It's the specialists that will break the bans. If there are only ten guys in the UK who can do something and they insist on using a PSC, the clients will give in. Once they do, then the ban is broken, and managers will say, 'You gave in to get that guy, why not this guy? Oh, sure, his skills aren't in quite the same demand, but now we know we've made it work.'

The bans will start to slip. That's just the way the world works.

If what you saying is turning out to be true then I definitely would welcome that. I for one, would welcome the ban on PSC bans.

[herman_g]

IR35 has completely killed my UK market. If I do a linkedin search for my skillset and "available", I get over 2000 contractors. 4 or 5 contract roles are coming up every week with none mentioning in our out - I presume that means in.

However, I am getting 3 calls a week about continental contracts. I signed up for one last month, the start was delayed but it's now confirmed for Monday. The company HAD 6 contractors in Essex doing what I will be doing. These contracts have all been moved to the continent. The company realises they just can't find permies with the right level of experience. Quite surprisingly, none of the contractors were willing to move. They also had the option of "inside" and all declined.

The city I will be working in has 500-550 monthly rents and .90 eur transit tickets. My rate is 15% lower than they were paying in Essex.

Brexit + IR35 = continental contract with EU residency. No brainer there.

[BritishLad88]

The city I will be working in has 500-550 monthly rents and .90 eur transit tickets. My rate is 15% lower than they were paying in Essex.

Brexit + IR35 = continental contract with EU residency. No brainer there.

all good if you're single & have the freedom of roaming around working anywhere but spare a thought for the ones who have families