Contractors: IR35 & general discussion
Discussion
Guvernator said:
I see several scenario's some of which are already happening.
1) Blanket inside, easiest option for most companies as it means they need to do nothing so will probably be a popular choice. No one will care about the contractors, losing skills etc unless it massively effects several high revenue generation projects. Over time you will slowly start to get a few odd exceptions for contractors working on these essential projects.
2) Hand it over to a consultancy. Second easiest option as again it means the end client needs to do little except chuck money at the problem. Contract resource will cost a lot more and some due diligence will need to be done to ensure the consultancy has all it's ducks in a row as ultimately liability still falls to the end client but this can be sorted out with some legal paperwork.
3) Do proper assessments of contractors, re-write contracts and amend working practices to ensure contractors they need are outside. Advantages are that they will be able to attract the very top talent pool, disadvantages are most companies won't have the HR resources or the will to do assessments on potentially hundreds of contractors plus they won't be popular with HMRC which is never a good idea. See NHS digital for examples of what happens if you don't toe the line.
I haven’t seen any blanket your inside IR35. That’s illegal. I have seen plenty of ‘move to an umbrella / paye’1) Blanket inside, easiest option for most companies as it means they need to do nothing so will probably be a popular choice. No one will care about the contractors, losing skills etc unless it massively effects several high revenue generation projects. Over time you will slowly start to get a few odd exceptions for contractors working on these essential projects.
2) Hand it over to a consultancy. Second easiest option as again it means the end client needs to do little except chuck money at the problem. Contract resource will cost a lot more and some due diligence will need to be done to ensure the consultancy has all it's ducks in a row as ultimately liability still falls to the end client but this can be sorted out with some legal paperwork.
3) Do proper assessments of contractors, re-write contracts and amend working practices to ensure contractors they need are outside. Advantages are that they will be able to attract the very top talent pool, disadvantages are most companies won't have the HR resources or the will to do assessments on potentially hundreds of contractors plus they won't be popular with HMRC which is never a good idea. See NHS digital for examples of what happens if you don't toe the line.
Corbyn would more than likely introduce something 10 times worse than IR35, in his mind anyone earning over £35k is deemed rich and fair game to be taxed to high heavens so how do you think he feels about us filthy tax dodging contractors?
The Tories who were traditionally all for the self employed and small business have taken a massive U-turn over the last few years for some inexplicable reason, the tail (HMRC) wagging the dog me thinks on that one.
Policies usually tinker around the edges, no one is usually that hard done by, you might get hit for a few extra quid here or there, some of the more "extreme" changes might cost you a few hundred quid which is all swallowable but this will massively shaft several hundred thousand contractors to the tune of thousands, even ten's pf thousands a year. Messing with a system that currently works and works well as well as a massive cut in livelihood for so many families for what? "Fairness", yeah right. It's sheer lunacy.
The Tories who were traditionally all for the self employed and small business have taken a massive U-turn over the last few years for some inexplicable reason, the tail (HMRC) wagging the dog me thinks on that one.
Policies usually tinker around the edges, no one is usually that hard done by, you might get hit for a few extra quid here or there, some of the more "extreme" changes might cost you a few hundred quid which is all swallowable but this will massively shaft several hundred thousand contractors to the tune of thousands, even ten's pf thousands a year. Messing with a system that currently works and works well as well as a massive cut in livelihood for so many families for what? "Fairness", yeah right. It's sheer lunacy.
Guvernator said:
Some noise coming out that the Lib Dems have made a pledge to delay or even cancel IR35 if they get into power.
If that's true they've pretty much just bought my vote.
I'm pretty much aligned with the Lib Dems in any case, alas I live in a marginal constituency which is a very close two horse race between Labour and the Tories, the latter of whom have shat on Contractors from a great height. If that's true they've pretty much just bought my vote.
Alas the Lib Dems only get ~10% of the constituency vote, I'll be doing my bit to improve that but it feels like pissing in the wind under FPTP.
Sir Lord Harold said:
Can we stop disguising Lib Dems and their policies - they've never won a GE in my lifetime so they're a non entity. Lab / Con that's it.
Yeah I know, I'll still be lodging a protest vote, not just for IR35 but other stuff as I think the two main parties have really gone down the pan. I really hope we get some canvassers round before the GE, they are going to get both barrels, thats for sure!Sir Lord Harold said:
Can we stop disguising Lib Dems and their policies - they've never won a GE in my lifetime so they're a non entity. Lab / Con that's it.
No.Just skimmed through their manifesto. Seems to be the most sensible out of all parties. Finally someone with the balls to link increased public spending with increased taxation. Makes a nice change form the magic money trees of labour and apparently now the tories.
zippy3x said:
No.
Just skimmed through their manifesto. Seems to be the most sensible out of all parties. Finally someone with the balls to link increased public spending with increased taxation. Makes a nice change form the magic money trees of labour and apparently now the tories.
Hence why IR35 is a good thing. Just skimmed through their manifesto. Seems to be the most sensible out of all parties. Finally someone with the balls to link increased public spending with increased taxation. Makes a nice change form the magic money trees of labour and apparently now the tories.
wormus said:
zippy3x said:
No.
Just skimmed through their manifesto. Seems to be the most sensible out of all parties. Finally someone with the balls to link increased public spending with increased taxation. Makes a nice change form the magic money trees of labour and apparently now the tories.
Hence why IR35 is a good thing. Just skimmed through their manifesto. Seems to be the most sensible out of all parties. Finally someone with the balls to link increased public spending with increased taxation. Makes a nice change form the magic money trees of labour and apparently now the tories.
zippy3x said:
Once again, my worst year contracting has netted more for the exchequer that my best year as a perm.
That’s a bit like claiming to be the world’s tallest dwarf - it simply demonstrates you don’t earn as much as perm which I guess is why you went contracting. I wonder if you’ve ever worked out what your clients would do with the extra cash if they didn’t pay it to you? Hire more permies? Pay it as a dividend to shareholders? Pay it as corporation tax perhaps? wormus said:
That’s a bit like claiming to be the world’s tallest dwarf - it simply demonstrates you don’t earn as much as perm which I guess is why you went contracting. I wonder if you’ve ever worked out what your clients would do with the extra cash if they didn’t pay it to you? Hire more permies? Pay it as a dividend to shareholders? Pay it as corporation tax perhaps?
We've gone over reasons why there are literally thousands of contractors and why a lot of companies prefer using them. If they wanted to hire more permies or pay dividends, there is absolutely nothing at all preventing them from doing that now. No one is holding a gun to their heads and forcing them to use contractors so maybe and I know this might be a bit out there as a concept, contracting is actually beneficial to everyone concerned which is why it's so prevalent. Unfortunately envy usually prevents those who don't participate from seeing the benefits hence posts like yours. Envy politics is the main reason why there is such a clamour to stop it, it started with the bankers and now it's the turn of the contractors. and once they've done with us, they'll move on to the next target. The race to bring everyone down to the same level rather than allow people to rise up out of the 9-5 rat race.
Guvernator said:
We've gone over reasons why there are literally thousands of contractors and why a lot of companies prefer using them. If they wanted to hire more permies or pay dividends, there is absolutely nothing at all preventing them from doing that now. No one is holding a gun to their heads and forcing them to use contractors so maybe and I know this might be a bit out there as a concept, contracting is actually beneficial to everyone concerned which is why it's so prevalent.
Unfortunately envy usually prevents those who don't participate from seeing the benefits hence posts like yours. Envy politics is the main reason why there is such a clamour to stop it, it started with the bankers and now it's the turn of the contractors. and once they've done with us, they'll move on to the next target. The race to bring everyone down to the same level rather than allow people to rise up out of the 9-5 rat race.
Why would envy come into it? Anyone can do it, it’s currently just a way for people with average talent to take home more than they have the capacity to as a perm. Through tax avoidance and thankfully HMRC are stopping it.Unfortunately envy usually prevents those who don't participate from seeing the benefits hence posts like yours. Envy politics is the main reason why there is such a clamour to stop it, it started with the bankers and now it's the turn of the contractors. and once they've done with us, they'll move on to the next target. The race to bring everyone down to the same level rather than allow people to rise up out of the 9-5 rat race.
Also you are wrong, we would certainly hire more perm if more were available so no it doesn’t suit everybody.
Edited by anonymous-user on Wednesday 20th November 20:52
Guvernator said:
Some noise coming out that the Lib Dems have made a pledge to delay or even cancel IR35 if they get into power.
If that's true they've pretty much just bought my vote.
If lib Dems won and cancelled Brexit without a second referendum, it would tear the country apart.If that's true they've pretty much just bought my vote.
But as long as you get to make a few more percentage on your pay, a price worth paying is it!!
hyphen said:
If lib Dems won and cancelled Brexit without a second referendum, it would tear the country apart.
But as long as you get to make a few more percentage on your pay, a price worth paying is it!!
Hardly just a few percentage points, if it was no one would be complaining.But as long as you get to make a few more percentage on your pay, a price worth paying is it!!
Also melodramatic much? Brexit will or will not happen, most are pretty much beyond caring at this point. This country has survived much worse including two world wars. Tear itself a part, give over.
Gosh there are a few sour posts on here from a ‘senior’ perm. As someone who has had as many as 400 or more interims working for them at one time, I can assure you that there is a place for a flexible workforce. It can be relatively cost effective when you need to temporarily increase your workforce without relying on the likes of Kpmg, capita etc.
True contractors should be compensated for the lack of pension, holiday, security, living away from home etc. The IR35 changes wouldn’t have been a problem for the majority of contractors if hmrc hadn’t implemented it the way they have. Yes there are silly situations where a contractors ‘tax breaks’ don’t really make sense eg an application programmer working in the same team for 3 plus years. I don’t care about MOO etc its just silly.
Ultimately though the situation is not a great outcome for clients, agents, accountants or HMRC. Hmrc might feel they have won the war but they will lose out.
True contractors should be compensated for the lack of pension, holiday, security, living away from home etc. The IR35 changes wouldn’t have been a problem for the majority of contractors if hmrc hadn’t implemented it the way they have. Yes there are silly situations where a contractors ‘tax breaks’ don’t really make sense eg an application programmer working in the same team for 3 plus years. I don’t care about MOO etc its just silly.
Ultimately though the situation is not a great outcome for clients, agents, accountants or HMRC. Hmrc might feel they have won the war but they will lose out.
Gazzab said:
Gosh there are a few sour posts on here from a ‘senior’ perm. As someone who has had as many as 400 or more interims working for them at one time, I can assure you that there is a place for a flexible workforce. It can be relatively cost effective when you need to temporarily increase your workforce without relying on the likes of Kpmg, capita etc.
True contractors should be compensated for the lack of pension, holiday, security, living away from home etc. The IR35 changes wouldn’t have been a problem for the majority of contractors if hmrc hadn’t implemented it the way they have. Yes there are silly situations where a contractors ‘tax breaks’ don’t really make sense eg an application programmer working in the same team for 3 plus years. I don’t care about MOO etc its just silly.
Ultimately though the situation is not a great outcome for clients, agents, accountants or HMRC. Hmrc might feel they have won the war but they will lose out.
Spot on, contractors have become an essential resource in many organisations, a partly flexible workforce much better suits the modern demands of many organisations. I also don't think anyone is averse to making the tax situation a bit fairer but the way they are implementing this swings it way too far into the camp of why would I bother. True contractors should be compensated for the lack of pension, holiday, security, living away from home etc. The IR35 changes wouldn’t have been a problem for the majority of contractors if hmrc hadn’t implemented it the way they have. Yes there are silly situations where a contractors ‘tax breaks’ don’t really make sense eg an application programmer working in the same team for 3 plus years. I don’t care about MOO etc its just silly.
Ultimately though the situation is not a great outcome for clients, agents, accountants or HMRC. Hmrc might feel they have won the war but they will lose out.
Eliminating a large part of your flexible workforce, right at the time when the UK is facing one of it's toughest economic challenges in a long while is absolute madness.
Mr Pointy said:
The only reason you can't get more permanent staff is that the pay & conditions you offer aren't good enough.
Pay a sufficent amount & you'll be inundated.
Easier said than done, we’ve found the contractor market to be so buoyant that anyone who’s any good is already contracting. Most don’t want to go perm but that may change now. It’s not the same all over the U.K., the supply and demand varies by city.Pay a sufficent amount & you'll be inundated.
Gazzab said:
Gosh there are a few sour posts on here from a ‘senior’ perm. As someone who has had as many as 400 or more interims working for them at one time, I can assure you that there is a place for a flexible workforce. It can be relatively cost effective when you need to temporarily increase your workforce without relying on the likes of Kpmg, capita etc.
True contractors should be compensated for the lack of pension, holiday, security, living away from home etc. The IR35 changes wouldn’t have been a problem for the majority of contractors if hmrc hadn’t implemented it the way they have. Yes there are silly situations where a contractors ‘tax breaks’ don’t really make sense eg an application programmer working in the same team for 3 plus years. I don’t care about MOO etc its just silly.
Ultimately though the situation is not a great outcome for clients, agents, accountants or HMRC. Hmrc might feel they have won the war but they will lose out.
I agree with pretty much all of that. My point is the compensation should be based on market rates, not tax evasion. If you are genuinely running a small business you have nothing to fear but this designed to target disguised employees who put themselves at a tax advantage by working behind an intermediary. If the market wants to adjust upwards to compensate it will. True contractors should be compensated for the lack of pension, holiday, security, living away from home etc. The IR35 changes wouldn’t have been a problem for the majority of contractors if hmrc hadn’t implemented it the way they have. Yes there are silly situations where a contractors ‘tax breaks’ don’t really make sense eg an application programmer working in the same team for 3 plus years. I don’t care about MOO etc its just silly.
Ultimately though the situation is not a great outcome for clients, agents, accountants or HMRC. Hmrc might feel they have won the war but they will lose out.
I’m not anti contractor at all, just think it should be fair, especially as we are all asked to contribute more to better public services, NHS etc.
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