IR35 letters going out to GlaxoSmithKline contractors

[WordIsBond]

Not sure what contracts you have been working on but I certainly got paid SIGNIFICANTLY more than permie equivalents. (at least double, if not triple). And to top it off, for many years I was able to pay significantly less tax by using my spouse as an employee, avoiding NI by paying dividends, having the company pay for my IT equipment and Phone.

Context is everything. I was talking about HMRC/tax treatment of contractors inside IR35.

[Fred Bloggs]

They were probably very busy on Friday.

Doing very important things.

[Fred Bloggs]

So HMRC are talking nonsense. And join IPSE now.

and then, what could possibly go wrong?

[Fred Bloggs]

Not sure what contracts you have been working on but I certainly got paid SIGNIFICANTLY more than permie equivalents. (at least double, if not triple). And to top it off, for many years I was able to pay significantly less tax by using my spouse as an employee, avoiding NI by paying dividends, having the company pay for my IT equipment and Phone.

A permie job is not especially more secure that a contract. Big companies are well versed in redundancies and pay offs to get permies out the door; and UK pension contributions by employers are terrible (3% at a lot of employers)

My bold + underline. And that's where it should stop. The significant raise in rate is compensation for those things you don't get that the staff person sat next to you gets. That should be the only discriminating feature of your engagement. The UK is out of line internationally in that respect. The UK agency workers have been lucky that inept and hamfisted enforcement of IR35 has kept them able to operate as a business the last two decades, when really they're just temps 90% of the time.

[BlueSharp]

My bold + underline. And that's where it should stop. The significant raise in rate is compensation for those things you don't get that the staff person sat next to you gets. That should be the only discriminating feature of your engagement. The UK is out of line internationally in that respect. The UK agency workers have been lucky that inept and hamfisted enforcement of IR35 has kept them able to operate as a business the last two decades, when really they're just temps 90% of the time.

And what's your point? If the law says you can operate outside ir35 if you operate in a certain way then what is wrong with that? The law is on our side if you look at the tribunal rulings that what we do is completely legal. The real problem here is that corporation tax has been cut while employment tax has been increased to create this perverse situation. Why is it right for someone who you would call "in business of their own account" who is also a single worker to pay less tax? The simple fix is to properly define a PSC and tax all as self-employed (allowing to smooth out tax and NI payments over the year).

The significant raise in rate is because the company I'm working with wants to pay that rate for my companies skills and the flexibility it can provide and it's at a rate I'm happy to to provide a service for, nothing else matters. If my running costs go up due to a change in law/increase in tax my bill goes up or I re-evaluate my business plan as the work-life balance changes and do something else/enter permiedom.

[BrilloPad]

and then, what could possibly go wrong?

Certainly everyone needs IR35 insurance. Joining IPSE is one way.

[BrilloPad]

And whats your point? If the law says you can operate outside ir35 if you operate in a certain way then what is wrong with that? The law is on our side if you look at the tribunal rulings that what we do is completely legal.

That is great in theory.....

[Fred Bloggs]

Certainly everyone needs IR35 insurance. Joining IPSE is one way.

But not for much longer, it seems.

[BrilloPad]

But not for much longer, it seems.

I would have thought now IR35 was even more indispensable? If that makes sense!

Or do you mean there will be no contractors after April 2020? I suspect numbers will go down - but there will still be quite a few.

[Fred Bloggs]

I would have thought now IR35 was even more indispensable? If that makes sense!

Or do you mean there will be no contractors after April 2020? I suspect numbers will go down - but there will still be quite a few.

The latter. If everyone is an agency employee, nobody needs IR35 insurance. And those small minority who their client agrees are outside IR35 won't need it either because the client will be responsible for the outside IR35 status. End of QDOS, end of IPSE.

For the avoidance of doubt, since I left the UK including in my current job, I've worked alongside many contractors, they're all on the agency pay roll. At least until their contract comes to an end, then they're gone. No reason it should any different in the UK. Occasionally, I do come across a genuinely self employed consultant contractor. They tend to run concurrent jobs with multiple clients, sometimes with employees of their own. I think we'll see more like this in the UK, just like the rest of the world.