Contractors: IR35 & general discussion

[Bluedot]

Clockwork Cupcake said:

Olivera said:

I would say both of those are very badly thought out proposals.

Engagement tax - so that's an additional tax due for (or paid by) small LTD company contractors, but not similarly due for consultants provided by a large company. Great.

PSC legal entity - another very bad idea. This would very quickly become just another 'inside IR35' categorisation. Expect full PAYE to be applied on all monies minus perhaps a token 5% expenses gesture.

In fairness, he was put on the spot and thinking on his feet (albeit sat down).

I thought it was a bit unfair of the committee to push it back to the 'witnesses' quite a few times with "so whats the answer?" or "whats the alternative?".
They're not there to offer other proposals, merely pointing out how badly IR35 is being implemented.

I'm sure given a bit of time if the opportunity was offered then a number of better solutions could be proposed.

[aeropilot]

Bluedot said:

I thought it was a bit unfair of the committee to push it back to the 'witnesses' quite a few times with "so whats the answer?" or "whats the alternative?".
They're not there to offer other proposals, merely pointing out how badly IR35 is being implemented.

I'm sure given a bit of time if the opportunity was offered then a number of better solutions could be proposed.

Haven't plenty of sensible options been put to HMRC in the committee consultations leading up to this, and been flatly rejected/ignored by them?

[Guvernator]

The thing is what's the likely outcome? Best case scenario is that they somehow manage to delay it by a year. Many companies have already spent the money, done the assessments or fired all their contractors already, they aren't going to take them all back, only to have to do it all again next March. Too little too late I'm afraid.

[mondeoman]

Guvernator said:

The thing is what's the likely outcome? Best case scenario is that they somehow manage to delay it by a year. Many companies have already spent the money, done the assessments or fired all their contractors already, they aren't going to take them all back, only to have to do it all again next March. Too little too late I'm afraid.

^^^ This, in spades.

The damage is done for the majority now. A forced delay would only, possibly, help a small minority now.

[Clockwork Cupcake]

Would help me, and other procrastinators

But, yes, I agree.

[Noodle1982]

Reading an article regarding Eamon holmes and his current tax problems there was this snippet...

“Had Holmes been investigated under the new rules, due to take effect in April 2020, he would not owe HMRC any money at all. He would actually get a tax refund, and it would be his deemed employer - in this case ITV - that would be picking up a tax bill.”

Is this correct?

If so why the big worry from contractors if it's actually the employers at risk?

[Gazzab]

It’s not that simple.
If you are declared as inside then you run the risk of retrospective investigations and pain.
If you are deemed outside then there is a risk of hmrc challenge and the tax man can challenge the whole supply chain afaik. There is also the issue with contract terms and some clients and/or agencies trying to make the contractor liable.

[johnnymiller]

Noodle1982 said:

Reading an article regarding Eamon holmes and his current tax problems there was this snippet...

“Had Holmes been investigated under the new rules, due to take effect in April 2020, he would not owe HMRC any money at all. He would actually get a tax refund, and it would be his deemed employer - in this case ITV - that would be picking up a tax bill.”

Is this correct?

If so why the big worry from contractors if it's actually the employers at risk?

Good example. You’ve just described why companies are blanket banning the use of PSC contractors or forcing PAYE on them.

Companies engaging contractors were ok when it wasn’t them at risk of tax bills/fines. Now they become liable for any tax misrepresentations/errors/incorrect determinations they are understandably scared of being on the hook. The rules are so subjective and vague, the only things available to them with 100% certainty of risk mitigation are moving people onto PAYE or not using PSC’s at all to remove exposure to it. Companies with huge contractor armies cant possibly individually assess every single agreement, especially against a set of fairly grey rules so we have seen these blanket determinations, although i expect they have yet to feel the real impact of that particular knee jerk, and some are using it as an excuse to try and pay less.

I found the contract market has totally dried up while companies try and get their heads around what/if/how/when they can work with contractors.

I left my previous contract and found a new local perm role in January at a reasonable rate. Plan is to watch what happens while not being one of the army of people scrambling for an income on 6th April. I hope it doesnt come to that, but i thought i ought to practise a bit of defensive driving in 2020.

[aeropilot]

johnnymiller said:

although i expect they have yet to feel the real impact of that particular knee jerk, and some are using it as an excuse to try and pay less.

Yes to both of those points.

[Greenmantle]

What are peoples real world experiences of job hunting at the moment?

I'm planning to stay out of the sh*t storm for a couple of months but I still keep my oar in just in case anything interesting comes up.
Seen a few job adverts (no mention of IR35 IN or OUT). Rates are poor so I am assuming that agents are trying to make a quick tidy profit on any unassuming contractors who might be desperate.

Obviously we are currently in a Mexican Standoff waiting for the first side to blink.
Good Luck.

[aeropilot]

Greenmantle said:

What are peoples real world experiences of job hunting at the moment?

Completely dead in my industry, nothing out there at all.

[Gazzab]

Greenmantle said:

What are peoples real world experiences of job hunting at the moment?

I'm planning to stay out of the sh*t storm for a couple of months but I still keep my oar in just in case anything interesting comes up.
Seen a few job adverts (no mention of IR35 IN or OUT). Rates are poor so I am assuming that agents are trying to make a quick tidy profit on any unassuming contractors who might be desperate.

Obviously we are currently in a Mexican Standoff waiting for the first side to blink.
Good Luck.

I have been looking for 8 months. My background is programme director etc level mainly in FS. Rates are down by at least 25%, sometimes 50%. Then there is the confusion re employers NI. There are very few outside roles.
I have two verbal offers. One has just moved from an outside offer to an inside offer. The period between first chat with an agent to start contract has seemingly doubled in length.
The number of applicants for most roles is many hundreds.
Job boards (as ever) are a total waste of time. 99% of agents don’t come back to you.
Network, network, network.

[worsy]

Am not looking but still have my daily jobserve search out of habit. Normally it would return 240+ roles (Daily search) but this morning it is on 118. Obviously most of them are tenuous matches but just shows the state of the market.

[g7orge]

Gazzab said:

Greenmantle said:

What are peoples real world experiences of job hunting at the moment?

I'm planning to stay out of the sh*t storm for a couple of months but I still keep my oar in just in case anything interesting comes up.
Seen a few job adverts (no mention of IR35 IN or OUT). Rates are poor so I am assuming that agents are trying to make a quick tidy profit on any unassuming contractors who might be desperate.

Obviously we are currently in a Mexican Standoff waiting for the first side to blink.
Good Luck.

I have been looking for 8 months. My background is programme director etc level mainly in FS. Rates are down by at least 25%, sometimes 50%. Then there is the confusion re employers NI. There are very few outside roles.
I have two verbal offers. One has just moved from an outside offer to an inside offer. The period between first chat with an agent to start contract has seemingly doubled in length.
The number of applicants for most roles is many hundreds.
Job boards (as ever) are a total waste of time. 99% of agents don’t come back to you.
Network, network, network.

Same - Programme management - nothing around - Job boards are useless now you can't contact agents like you used to be able to - I normally get contracts by recommendation but there is most certainly a pause at the moment - like a lot of us my contract is up at the end of March so we will see what happens...

[wombleh]

Greenmantle said:

What are peoples real world experiences of job hunting at the moment?

Market looks pretty dead in my area for contracts. Only a few advertised with fairly specific requirements for skills or clearances (which they’re not supposed to ask for up front, but still do).

There are a fair few perm roles being advertised.

[Gazzab]

Wondering what people are doing re new pensions when through an inside umbrella?
I spoke with Parasol who mentioned that I can either pay 9% into a NISA or opt out and do my own thing (or no thing). I am going to speak to an IFA but assume they will recommend a SIPP or something along those lines?

[g7orge]

Whats the employment status for an MP? - although it sounds like self employed - I assume their tax status is employed... best of both worlds..

https://www.parliament.uk/about/mps-and-lords/memb...

"basic annual salary for an MP from 1 April 2019 is £79,468. MPs also receive expenses to cover the costs of running an office, employing staff, having somewhere to live in London or their constituency, and travelling between Parliament and their constituency"

[markyb_lcy]

Gazzab said:

Wondering what people are doing re new pensions when through an inside umbrella?
I spoke with Parasol who mentioned that I can either pay 9% into a NISA or opt out and do my own thing (or no thing). I am going to speak to an IFA but assume they will recommend a SIPP or something along those lines?

I'm still under my LTD and will continue to do so, but I have a SIPP after consolidating about 4 previous permie pensions. It's good to know there are umbrella companies that would continue to enable me to contribute to it if I was to go under one. I do wonder though if you would have the same flexibility ... I contribute to my SIPP via "employer contributions". Not sure if that would be possible under an umbrella?

[bonerp]

I have an Aegon Flexible pension being paid gross from Ltd Co. Will move to salary sacrifice as employer contribution. Another £5 a week charge from these damn umbrella firms.

[PostHeads123]

Its bad out there at moment particularly FS in London for permy and contract, a lot of the US FS companies because of Trumps changes will replace London headcount be in perm or contract with a US hire. Then we have off-shoring, a lot of companies now have very mature offshoring models and a lot of people offshore with experience. Perm salaries are down (or at least not going up), contract rates not great and loads of competition. For me anyway its the worst I have seen the market in 23 years of working in tech for FS in London and that includes the credit crunch. Things need to settle down over next year or so but its not looking great.

Edited by PostHeads123 on Tuesday 25th February 12:15

Edited by PostHeads123 on Tuesday 25th February 12:16