Contractors: IR35 & general discussion
Discussion
wombleh said:
Gazzab said:
But it’s not a blanket assessment. It’s not an assessment at all. It’s contract cancelled and an offer of a PAYE contract. If you take it then you are flagging to hmrc that they might want to look at your previous contract(s) with that client. You will likely be doing the same role, in the same team, on the same project etc etc. What’s changed? Nothing except a move to PAYE plus you now get an appraisal.
Agreed, hence carefully worded it as "blanket decision" rather than "blanket assessment".I've been offered 12 months with a big company who are likely to default to everyone being inside. Stupid situation to be in but I'm going to have to turn down a load of cash from a good client due to this legislation. Still I'm sure their outsourcer will do a great job of it and the customers can benefit from a cheaper and more effective service......ha!
Sir Lord Harold said:
Guess most participating in this thread are *IT* contractors am I correct?
Business Analyst, so sort of. About 50% of the time it's pure IT, the rest its business relatedOn my current job the contractor team is employed by the business. Everyone on the clients side of the project team is an Engineer or Technician. It's a business project which has IT systems (outsourced) as part of the solution.
Interesting....
https://www.contractoruk.com/news/0014335financial...
particularly the last couple of paragraphs
https://www.contractoruk.com/news/0014335financial...
particularly the last couple of paragraphs
zippy3x said:
Interesting....
https://www.contractoruk.com/news/0014335financial...
particularly the last couple of paragraphs
Interesting but a bit inaccurate. Consultancies won't just be able to use contractors, IR35 ignores any intervening layers and looks at the working relationship between the contractor and the actual end client. A consultancy won't just be able to wrap contractors up in a false layer, add on a substantial mark-up and hire them out to clients as the whole supply chain comes under scrutiny in IR35. https://www.contractoruk.com/news/0014335financial...
particularly the last couple of paragraphs
HMRC have had years to get this right, they aren't going to get tripped up by silly things like intermediary companies. Once again people are underestimating just how far reaching and damaging this reform will be, there is no silver bullet or easy way out.
Guvernator said:
zippy3x said:
Interesting....
https://www.contractoruk.com/news/0014335financial...
particularly the last couple of paragraphs
Interesting but a bit inaccurate. Consultancies won't just be able to use contractors, IR35 ignores any intervening layers and looks at the working relationship between the contractor and the actual end client. A consultancy won't just be able to wrap contractors up in a false layer, add on a substantial mark-up and hire them out to clients as the whole supply chain comes under scrutiny in IR35. https://www.contractoruk.com/news/0014335financial...
particularly the last couple of paragraphs
HMRC have had years to get this right, they aren't going to get tripped up by silly things like intermediary companies. Once again people are underestimating just how far reaching and damaging this reform will be, there is no silver bullet or easy way out.
Arf
PostHeads123 said:
Most big companies though have IT teams in other places in the world and most can redirect work there, their is still incompetent offshoring about but also a lot of companies are now very mature with this model so the skills are there and just as good as in the UK. End of the day in a lot of companies its the business that determines IT budget, the business in most cases don't see the IR35 change as an issue they see it as a way to cut costs. I agree what they are doing with IR35 is stupid as it will probably cost HMRC revenue and the UK jobs, but it is what it is. Contractors can walk if they want fine but it wont solve anything for them, permies are sitting there waiting for the noise in the job market so they can jump in and pick up the roles.
Utter b
ks. I've been with the same end client for a very long period of time. They have outsourced via one of the large consultancies, their team in India has people with 6 years' experience on our application who still struggle to get the absolute basics right day to day. As for their newer people - utterly dreadful. Their communication with our business is mind-bogglingly woeful, not even on the same page of business knowledge.
That's why, 6 years on, me and several UK colleagues are still there, preventing our outsourcers from causing widespread damage to business critical apps and have just been extended for another year, currently discussing my day rate under a brolly.
Guvernator said:
zippy3x said:
Interesting....
https://www.contractoruk.com/news/0014335financial...
particularly the last couple of paragraphs
Interesting but a bit inaccurate. Consultancies won't just be able to use contractors, IR35 ignores any intervening layers and looks at the working relationship between the contractor and the actual end client. A consultancy won't just be able to wrap contractors up in a false layer, add on a substantial mark-up and hire them out to clients as the whole supply chain comes under scrutiny in IR35. https://www.contractoruk.com/news/0014335financial...
particularly the last couple of paragraphs
HMRC have had years to get this right, they aren't going to get tripped up by silly things like intermediary companies. Once again people are underestimating just how far reaching and damaging this reform will be, there is no silver bullet or easy way out.
Hopefuly the end clients will start to think instead of executing a simple knee jerk reaction. We shall see.
PostHeads123 said:
Most big companies though have IT teams in other places in the world and most can redirect work there, their is still incompetent offshoring about but also a lot of companies are now very mature with this model so the skills are there and just as good as in the UK. End of the day in a lot of companies its the business that determines IT budget, the business in most cases don't see the IR35 change as an issue they see it as a way to cut costs. I agree what they are doing with IR35 is stupid as it will probably cost HMRC revenue and the UK jobs, but it is what it is. Contractors can walk if they want fine but it wont solve anything for them, permies are sitting there waiting for the noise in the job market so they can jump in and pick up the roles.
I work for a large company with huge IT staff, we do have sites across Europe. But there is no way any of them could take the UK roadmap of tech work, in either capacity of ability. So the point of 're-direct' work is not a reality in any large IT company I've seen....zippy3x said:
I should have been a little more verbose. What I find intersting is that the end clients are starting to recognise that consultancies are going to be adding very little and giving them more or less what they have now, but with an extra layer or two of expense.
Hopefuly the end clients will start to think instead of executing a simple knee jerk reaction. We shall see.
I see several scenario's some of which are already happening.Hopefuly the end clients will start to think instead of executing a simple knee jerk reaction. We shall see.
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.
Guvernator said:
zippy3x said:
I should have been a little more verbose. What I find intersting is that the end clients are starting to recognise that consultancies are going to be adding very little and giving them more or less what they have now, but with an extra layer or two of expense.
Hopefuly the end clients will start to think instead of executing a simple knee jerk reaction. We shall see.
I see several scenario's some of which are already happening.Hopefuly the end clients will start to think instead of executing a simple knee jerk reaction. We shall see.
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.
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