Contractors: IR35 & general discussion
Discussion
LinkedIn. Over 12,000 responses from contractor survey
ContractorCalculator survey managed to obtain over 12,000 response on the IR35 changes. Here is a full summary and review from peoples feedback.
ContractorCalculator survey managed to obtain over 12,000 response on the IR35 changes. Here is a full summary and review from peoples feedback.
Greenmantle said:
Clockwork Cupcake said:
Greenmantle said:
Wondering how best to reply to end clients and agencies who are sending me emails advertising roles.
The roles are within IR35 but rates haven't changed to reflect situation.
Business as usual - you tell them that you have the skills and experience to be able to help them out but the rate is too low. The roles are within IR35 but rates haven't changed to reflect situation.
Standard rate negotiation stuff.
Dear Sir / Madam
Thank you very much for your email.
I have all the skills required for the role advertised below and I am available immediately.
Unfortunately the remuneration offered does not reflect the additional Tax and NI (Employer and Employee) burden caused by the role being only available on a PAYE basis.
Hopefully the end client is willing to reconsider this and I am obviously available anytime to begin negotiation.
All the best.
Firstly, have YOU actually been contacted or are you one of many that got the email and it just happens that it's personalised and that your name is at the top of the email? If it's via the scatter gun approach (which lots of the personalised stuff I get is), then they don't care about your opinion, they're fishing for somebody to say they are interested and to start talking with them so you've gone from being a prospect to just closing the door. They aren't looking to negotiate with you, they want somebody to be interested. If this genuinely was directed at YOU then I guess you can state what you want from a deal.
The main reason I say it's a bad response is because as a contractor you will work either inside or outside of IR35. The end client has already set the terms and deemed the role to be inside of IR35 so there is no 'additional' tax burden, those are the standard T's and C's of that assignment. If you were in an existing role that went from inside to outside (not that you'd stay anyway), then you'd have the right to mention the additional burden as it is exactly that, additional to the terms you were previously on.
I'd keep it clean and concise, you're either willing to work on these terms and conditions or you're not. It's not about Tax and NI, it's about the rate and the bit that goes in your pocket so personally don't think it's necessary to point out and Tax implications, it's about the rate and whether you're willing to accept it or can negotiate it. How you do the maths in your head should probably stay there to be honest. Like Clockwork Cupcake said, standard rate negotiation.
Edited by Autopilot on Thursday 5th March 13:52
Edited by Autopilot on Thursday 5th March 13:53
Autopilot said:
I personally think this was a bad response.
Firstly, have YOU actually been contacted or are you one of many that got the email and it just happens that it's personalised and that your name is at the top of the email? If it's via the scatter gun approach (which lots of the personalised stuff I get is), then they don't care about your opinion, they're fishing for somebody to say they are interested and to start talking with them so you've gone from being a prospect to just closing the door. They aren't looking to negotiate with you, they want somebody to be interested. If this genuinely was directed at YOU then I guess you can state what you want from a deal.
The main reason I say it's a bad response is because as a contractor you will work either inside or outside of IR35. The end client has already set the terms and deemed the role to be inside of IR35 so there is no 'additional' tax burden, those are the standard T's and C's of that assignment. If you were in an existing role that went from inside to outside (not that you'd stay anyway), then you'd have the right to mention the additional burden as it is exactly that, additional to the terms you were previously on.
I'd keep it clean and concise, you're either willing to work on these terms and conditions or you're not. It's not about Tax and NI, it's about the rate and the bit that goes in your pocket so personally don't think it's necessary to point out and Tax implications, it's about the rate and whether you're willing to accept it or can negotiate it. How you do the maths in your head should probably stay there to be honest. Like Clockwork Cupcake said, standard rate negotiation.
I disagree; the quicker clients establish that the reason they are struggling to find talent is because of their own decisions regarding IR35, the better. Making sure agents are quite clear that that’s the reason for declining is paramount. Agents will feed back to their clients and if the overwhelming message from the contractor base is “no thank you” they’ll be considering changing their tune. Firstly, have YOU actually been contacted or are you one of many that got the email and it just happens that it's personalised and that your name is at the top of the email? If it's via the scatter gun approach (which lots of the personalised stuff I get is), then they don't care about your opinion, they're fishing for somebody to say they are interested and to start talking with them so you've gone from being a prospect to just closing the door. They aren't looking to negotiate with you, they want somebody to be interested. If this genuinely was directed at YOU then I guess you can state what you want from a deal.
The main reason I say it's a bad response is because as a contractor you will work either inside or outside of IR35. The end client has already set the terms and deemed the role to be inside of IR35 so there is no 'additional' tax burden, those are the standard T's and C's of that assignment. If you were in an existing role that went from inside to outside (not that you'd stay anyway), then you'd have the right to mention the additional burden as it is exactly that, additional to the terms you were previously on.
I'd keep it clean and concise, you're either willing to work on these terms and conditions or you're not. It's not about Tax and NI, it's about the rate and the bit that goes in your pocket so personally don't think it's necessary to point out and Tax implications, it's about the rate and whether you're willing to accept it or can negotiate it. How you do the maths in your head should probably stay there to be honest. Like Clockwork Cupcake said, standard rate negotiation.
Edited by Autopilot on Thursday 5th March 13:52
Edited by Autopilot on Thursday 5th March 13:53
Noodle1982 said:
My current client, despite going through all the relevant checks etc, seems to be leaning towards a blanket ban.
My question is, rather than go down the route of an umbrella company can I set up employers NI payments directly from my business income?
Many clients will allow an inside contract to be run via your psc - unless it’s a short term contract or you have multiple clients then it’s not worth doing. But many clients will only allow umbrella or maybe paye via their payroll. My question is, rather than go down the route of an umbrella company can I set up employers NI payments directly from my business income?
Well I am now hurrying along the closure of my limited company. Having been between contracts for 8 months, there isn’t much money left (less than likely tax bill). Oh well. It’s been some 22 years of contracting (with a 5 year perm stint in the middle) but it’s just not a sustainable model for me now. So I start an FTC next week. This was the only way I could mitigate the eNI impact. The number of the more senior contracts is low regardless of inside or outside.
Ultimately my tax contributions will be significantly lower (ignoring the 8 months out) even accounting for client paying eNI.
Ultimately my tax contributions will be significantly lower (ignoring the 8 months out) even accounting for client paying eNI.
Gazzab said:
Well I am now hurrying along the closure of my limited company. Having been between contracts for 8 months, there isn’t much money left (less than likely tax bill). Oh well. It’s been some 22 years of contracting (with a 5 year perm stint in the middle) but it’s just not a sustainable model for me now. So I start an FTC next week. This was the only way I could mitigate the eNI impact. The number of the more senior contracts is low regardless of inside or outside.
Ultimately my tax contributions will be significantly lower (ignoring the 8 months out) even accounting for client paying eNI.
Are you going down the MVL Route?Ultimately my tax contributions will be significantly lower (ignoring the 8 months out) even accounting for client paying eNI.
Bluedot said:
Gazzab said:
Autopilot said:
Are you going down the MVL Route?
Nope there isn’t any money left and so I think it’s just stop taking salary and dividends, complete year end, calculate tax due, close the company, save for taxes..Gazzab said:
Bluedot said:
Gazzab said:
Autopilot said:
Are you going down the MVL Route?
Nope there isn’t any money left and so I think it’s just stop taking salary and dividends, complete year end, calculate tax due, close the company, save for taxes..Gazzab said:
Clockwork Cupcake said:
Bluedot said:
Don't think you can close the company though can you if you have outstanding tax to pay ?
HMRC certainly take a very dim view of it. Sorted
Bluedot said:
Gazzab said:
Clockwork Cupcake said:
Bluedot said:
Don't think you can close the company though can you if you have outstanding tax to pay ?
HMRC certainly take a very dim view of it. Sorted
want to pick the brains here - been on a contract 9 months - the client has said they have "assessed" contractors and most are inside so the choice is inside via umbrella or perm. Accountant has said I open myself up to HMRC investigation if I go inside (even though they have said they will be light this year)
The opportunity to go perm has arisen because the only other developer has handed in his notice, leaving April 10th - she thought this would be a fair opportunity to join and not risk or explain to investigation that it was a genuine choice as they need a permie. Thoughts?
The opportunity to go perm has arisen because the only other developer has handed in his notice, leaving April 10th - she thought this would be a fair opportunity to join and not risk or explain to investigation that it was a genuine choice as they need a permie. Thoughts?
cheeky_chops said:
want to pick the brains here - been on a contract 9 months - the client has said they have "assessed" contractors and most are inside so the choice is inside via umbrella or perm. Accountant has said I open myself up to HMRC investigation if I go inside (even though they have said they will be light this year)
The opportunity to go perm has arisen because the only other developer has handed in his notice, leaving April 10th - she thought this would be a fair opportunity to join and not risk or explain to investigation that it was a genuine choice as they need a permie. Thoughts?
Do you feel lucky punk? The opportunity to go perm has arisen because the only other developer has handed in his notice, leaving April 10th - she thought this would be a fair opportunity to join and not risk or explain to investigation that it was a genuine choice as they need a permie. Thoughts?
Ultimately it’s all down to personal appetite for risk and acceptance of the impacts should it go pear shaped. I suspect they going perm is less ‘bad’ than going inside / umbrella. If the job role is different then you shouldn’t need to worry.
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