This is the end of contracting...

[Eric Mc]

CRB14 said:

W4NTED said:

Don't think so as she will have more than one client?

Well if the work around for this potential game changer is having more than one client there's a very easy way round for freelancers

I think that there will be no fundamental changes to the whole "self-employed" v' "employed" debate at all. The same basic principles that have applied for 100 years or more will still apply.

When IR35 was introduced almost 20 years ago there were fears that accountants who worked in professional practices, including partners, who were seconded on a semi-permanent basis to clients might fall foul of IR35. As far as I am aware, there has not been one case of such a situation being pursued by HMRC.

[Bikerjon]

CRB14 said:

Well if the work around for this potential game changer is having more than one client there's a very easy way round for freelancers

Is it that easy though? I left contracting a while back but I did it for many years. I can't think of one client who would be happy if I sauntered off to spend time with other clients. I know there are some exceptions, but the fact is most clients want a contractor to be visible full time Mon-Fri (just like the permies!)

[CRB14]

W4NTED said:

And that is to...?

Well, quite simply, one could just make one bills to more than one company / client in a month. That, in theory, could be an hours work per month.

[CRB14]

Bikerjon said:

Is it that easy though? I left contracting a while back but I did it for many years. I can't think of one client who would be happy if I sauntered off to spend time with other clients. I know there are some exceptions, but the fact is most clients want a contractor to be visible full time Mon-Fri (just like the permies!)

Perhaps not but assuming the alternative for them would be to employ you and provide all the benefits that go with it would they have a choice?

[bishbash]

W4NTED said:

CRB14 said:

W4NTED said:

Don't think so as she will have more than one client?

Well if the work around for this potential game changer is having more than one client there's a very easy way round for freelancers

And that is to...?

Find someone in the same boat, and invoice each other

[Bikerjon]

CRB14 said:

Perhaps not but assuming the alternative for them would be to employ you and provide all the benefits that go with it would they have a choice?

Maybe, but I suspect the larger organisations would never entertain the idea and just divert the requirement to their outsourcer/bodyshop. Then again this could all be a storm in a tea cup, because they do like to meddle with PSC's!

[W4NTED]

bishbash said:

W4NTED said:

CRB14 said:

W4NTED said:

Don't think so as she will have more than one client?

Well if the work around for this potential game changer is having more than one client there's a very easy way round for freelancers

And that is to...?

Find someone in the same boat, and invoice each other

I'm sure there will need to be visible trials of work and contracts etc too also payments exchanged so it could be a little complicated.

[theboss]

Bikerjon said:

CRB14 said:

Well if the work around for this potential game changer is having more than one client there's a very easy way round for freelancers

Is it that easy though? I left contracting a while back but I did it for many years. I can't think of one client who would be happy if I sauntered off to spend time with other clients. I know there are some exceptions, but the fact is most clients want a contractor to be visible full time Mon-Fri (just like the permies!)

It is easy enough - I do it all the time and set expectations accordingly at the earliest opportunity - for example during interviews I'll highlight the fact that I undertake ad-hoc engagements and work for other clients and then gauge their reaction which is very telling as far as whether they expect to exercise supervision/direction/control is concerned. Any expectation of exclusively on their part, and you're going to fail any IR35 related test.

[Bikerjon]

theboss said:

It is easy enough - I do it all the time and set expectations accordingly at the earliest opportunity - for example during interviews I'll highlight the fact that I undertake ad-hoc engagements and work for other clients and then gauge their reaction which is very telling as far as whether they expect to exercise supervision/direction/control is concerned. Any expectation of exclusively on their part, and you're going to fail any IR35 related test.

Like I said, there are exceptions, however I'd estimate that at least 90% of IT contractors wouldn't be able to dictate their terms like that. It's just not workable or desirable on a project with deadlines.

[theboss]

Bikerjon said:

Like I said, there are exceptions, however I'd estimate that at least 90% of IT contractors wouldn't be able to dictate their terms like that. It's just not workable or desirable on a project with deadlines.

I understand it's not always workable, but I think most contractors could help themselves by remembering that they are able to dictate their terms of engagement rather than falling in line with whatever the client says/expects. If you act like a permie, the client will treat you like one.

[krunchkin]

If this went through you can also wave goodbye to most of the stuff on your TV, as probably about 90% of production staff in TV (as opposed to management suits who all have nice staff jobs with pensions) are on freelance contracts. When I was last at the BBC the show we were on was giving rolling 9 month freelance contracts - basically staff jobs but without any of the associated costs for the bbc

[mad4amanda]

SpeckledJim said:

mad4amanda said:

This may be relevant to the conversation I was having at work the other day. 2 of us sat doing the same hours and job for the same money I am an employee and get a holiday pay supplement , my colleague is self employed so does not get holiday pay . I pay the same amount per month in NI as he pays every 6 months, he gets all sorts of tax allowances for cars fuel food at work that mean he hasn`t paid actual tax for years.
He doesn`t employ anyone or create any wealth beyond his own. Yet even taking into account the fact that I get holiday pay he earns more than I do because he takes more of his pay home.
Yet apparently he gets the same state pension and access to relevant benefits as I do despite not paying anywhere near the same amount in how can that be right?

You have job security. He doesn't.

You'd have to work out exactly what that is worth to you before knowing who has the better deal.

No because Im on a 12 month rolling contract that I apply for every January and our work is allocated in the same way we indicate our availability every month (2 months in advance) and with a few weeks notice get our allocations . He also has no say in the pay rate that is dictated by the employer .

[Fab32]

mad4amanda said:

SpeckledJim said:

mad4amanda said:

This may be relevant to the conversation I was having at work the other day. 2 of us sat doing the same hours and job for the same money I am an employee and get a holiday pay supplement , my colleague is self employed so does not get holiday pay . I pay the same amount per month in NI as he pays every 6 months, he gets all sorts of tax allowances for cars fuel food at work that mean he hasn`t paid actual tax for years.
He doesn`t employ anyone or create any wealth beyond his own. Yet even taking into account the fact that I get holiday pay he earns more than I do because he takes more of his pay home.
Yet apparently he gets the same state pension and access to relevant benefits as I do despite not paying anywhere near the same amount in how can that be right?

You have job security. He doesn't.

You'd have to work out exactly what that is worth to you before knowing who has the better deal.

No because Im on a 12 month rolling contract that I apply for every January and our work is allocated in the same way we indicate our availability every month (2 months in advance) and with a few weeks notice get our allocations . He also has no say in the pay rate that is dictated by the employer .

In the office I work in, the agency staff as they are called are roughly on double the hourly rate of the permanent staff. From what is said, the agency staff pay a much smaller percentage of tax and NI so the money they are left with in hand so to speak is considerably more. Some appear to have some really questionable tax habits, one woman rents her own house out and rents another as she can claim the rent against the tax she pays. That's what she said anyway.

For clarity we all do the same job, the same hours, have the same management input and are all provided with laptops and mobile phones. My understanding of the tax situation is very basic but if anyone get investigated I can't seeing it going very well for them in regards to IR35.

Some permanent staff get really angry about it but they don't recognise the other stuff we get as part of the package and if you quantified it into a monetary value the value would be about the same the only difference really is the amount paid in tax and NI.

I can't say I object to the government trying to level the playing field a bit, but this proposal isn't going to work.

[ruggedscotty]

this will end up a paper exercise -

the reality is that you will have a staffing company - this staffing company will then 'contract' labour to the company - staffic company will be like a cooperative of a number of what were contractors all working together.

easy ways round this one

[jammy_basturd]

mad4amanda said:

SpeckledJim said:

mad4amanda said:

This may be relevant to the conversation I was having at work the other day. 2 of us sat doing the same hours and job for the same money I am an employee and get a holiday pay supplement , my colleague is self employed so does not get holiday pay . I pay the same amount per month in NI as he pays every 6 months, he gets all sorts of tax allowances for cars fuel food at work that mean he hasn`t paid actual tax for years.
He doesn`t employ anyone or create any wealth beyond his own. Yet even taking into account the fact that I get holiday pay he earns more than I do because he takes more of his pay home.
Yet apparently he gets the same state pension and access to relevant benefits as I do despite not paying anywhere near the same amount in how can that be right?

You have job security. He doesn't.

You'd have to work out exactly what that is worth to you before knowing who has the better deal.

No because Im on a 12 month rolling contract that I apply for every January and our work is allocated in the same way we indicate our availability every month (2 months in advance) and with a few weeks notice get our allocations . He also has no say in the pay rate that is dictated by the employer .

Then you're not an employee, are you? He is also a much better negotiator than you if he's got a much better contract.

But then I see your situation all the time with employed people. Employees doing the same job in the same company, but one has better pay or perks because come review time one of them was better at negotiating.

[mad4amanda]

No I could go self employed at any time but choose not to because the reality is I think it is just a tax dodge and not viable morally or legal. He hasn`t negotiated anything, but contributes much less to society as a whole, whilst having the same benefits ?
To me its a scam allowing individuals and companies to contribute less and the sooner it is stopped the better.

[jammy_basturd]

Well isn't that a novel opinion.

I still haven't got a clue as to your employment status. If you're on a 12 month contract then you're a contractor?! If you're PAYE then you're an employee.

[mad4amanda]

I am PAYE but only on a 12 month contract which is renewed every January subject to me applying for it.
Effectively I suppose it is a zero hours contract as unless I submit availability every month I would not actually be allocated any work. Is it really that hard to understand, seams simple enough to me?

[born2bslow]

Anybody who has always been an employee has no right to criticise contractor rates. They have the choice to take the same path if they think it's so much more rosy. When you have had a couple of spells with no work for months the grass doesn't seem so much greener.

I operate as a limited company contractor, the difference in take home pay versus an employee is legitimate tax avoidance (which is legal and really should be called efficient use of the tax legislation), not tax evasion (which is illegal). I also spend an awful lot of time filling in HMRC forms and submitting monthly and quarterly returns. It's all great fun, please come and join in...I recently applied for a mortgage to a high street bank, and because of the my employment status they said I couldn't borrow enough to buy the house I was living in. 3 months of trading information with a lender offering a manual underwriting process later and we finally got our mortgage, again great fun, come and have some.

The agencies I use take the annual salary for a perm in role, add on pensions and other benefits, NI, PAYE etc. and then calculate an equivalent day rate. The cost to the business is the same for a perm or contractor in the majority of cases, so zero impact but far less admin and headaches.

Another interesting though, if contractors go who is going to cover roles for maternity and long term sickness? If the company hires a perm employee who gets the job when the original person comes back to work? There is a legitimate need for short term interim staff, it's a shame that permanent employees always complain about the headline rates with zero understanding of the tax regimes that impact limited company contractors, please educate yourself before criticising others.

[jammy_basturd]

born2bslow said:

Anybody who has always been an employee has no right to criticise contractor rates. They have the choice to take the same path if they think it's so much more rosy. When you have had a couple of spells with no work for months the grass doesn't seem so much greener.

I operate as a limited company contractor, the difference in take home pay versus an employee is legitimate tax avoidance (which is legal and really should be called efficient use of the tax legislation), not tax evasion (which is illegal). I also spend an awful lot of time filling in HMRC forms and submitting monthly and quarterly returns. It's all great fun, please come and join in...I recently applied for a mortgage to a high street bank, and because of the my employment status they said I couldn't borrow enough to buy the house I was living in. 3 months of trading information with a lender offering a manual underwriting process later and we finally got our mortgage, again great fun, come and have some.

The agencies I use take the annual salary for a perm in role, add on pensions and other benefits, NI, PAYE etc. and then calculate an equivalent day rate. The cost to the business is the same for a perm or contractor in the majority of cases, so zero impact but far less admin and headaches.

Exactly, nearly every person I know who is self employed isn't doing it for the money or "tax dodges", they do it because they enjoy picking their working hours, who they work with, when they work, where they work, etc. However, those people who are disguised employees, fook knows what their motivation is!

born2bslow said:

Another interesting though, if contractors go who is going to cover roles for maternity and long term sickness? If the company hires a perm employee who gets the job when the original person comes back to work? There is a legitimate need for short term interim staff, it's a shame that permanent employees always complain about the headline rates with zero understanding of the tax regimes that impact limited company contractors, please educate yourself before criticising others.

I imagine instead of contractors, companies will have to employ people on fixed term contracts. So they'll be employees, paid through PAYE (so HMRC will get their NI and IT), but be terminated after a fixed period. So essentially the worst of both worlds (from a employer/employee POV).