Death of the Contractor

[MyUserName]

Contracting will not die, it will just change such that you need something specific to offer clients.

Teams of devs (for example) purely as generic coders will probably die out or at least die down a lot.

[tarbera]

Can't you read the good times are here

https://www.ipse.co.uk/sites/default...orecast_q3.pdf

[BolshieBastard]

Will we see the death of contracting over the next few years?

APN's, increase in IR35 enquiries, rate cutting, technology simplification, use of more cheaper off shore solutions.

What is the future?


My thoughts, no real basis, just a hunch is that contracting as we have seen in the last ten years will be eroded pretty quickly so that in five years time 2019 there wont be a perm employee or a contractor employee, but something based around the zero hours contract.

hoping I can hang on for 10 years and then retire..

Almost nailed on unless legislation changes.

In the time I was contracting, I saw iR35 come in, standard contracts reduced from 26 weeks to 13 weeks, masses of work offshored first to India then further east to the Philipines, growth in large quasis consultancy operations, growth in agency permitractor employment etc.

In the last 2 years, Ive witnessed a marked shift from contract roles to permie roles with the growth in permie roles growing considerably.

The increase in IR35 inquiries needs to be borne in mind with how low they are, even now, relative to the total number of PSCs operating outside IR35 out there. It's moved up from something like 50 p.a. to 250. A big increase proportionately speaking, but relative to the total number of PSCs it is still very low. It's worth having some insurance against it but the increase is from one very small number to another very small, slightly larger one. IR35 remains mostly a deterrent, more than anything else, and unless its cost-efficiency changes, it will remain so.

Bit naive in outlook. While the number of investigations increases, it will increase year on year. One of the tactics of IR35 is to also 'scare' contractors into IR35. So year on year and the publicised number of investigations increases, many more contractors will deem themselves inside so the pool needing to be investigated will be reducing.

[Tasslehoff]

Bloody hope not, only just got into this game and was hoping to make a decent living out of it..

grumble grumble

[malvolio]

After ten years of a Labour government and 6 years of recession, why are you surprised that companies are taking on permies again instead of easily disposable contractors? Nothing to do with increasing business confidence, I suppose...

In 6 months time, when Millipede and Bollocks are back in power, how long before the above trends goes into reverse? My guess is the day after the election.

AS someone said, bulk skills are not going to cut it any more, you need to be just a little bit niche, be it technical skills, market vertical or whatever. That market will always be there.

[Zero Liability]

Almost nailed on unless legislation changes.

In the time I was contracting, I saw iR35 come in, standard contracts reduced from 26 weeks to 13 weeks, masses of work offshored first to India then further east to the Philipines, growth in large quasis consultancy operations, growth in agency permitractor employment etc.

In the last 2 years, Ive witnessed a marked shift from contract roles to permie roles with the growth in permie roles growing considerably.



Bit naive in outlook. While the number of investigations increases, it will increase year on year. One of the tactics of IR35 is to also 'scare' contractors into IR35. So year on year and the publicised number of investigations increases, many more contractors will deem themselves inside so the pool needing to be investigated will be reducing.

Perhaps but they'd need to push it up to 000's p.a. to even begin making a dent, without any improvement at all to its cost efficiency. In practice, I expect something closer to what TF mentioned as IR35 isn't cost effective enough to merit a high enough increase in inquiries to accomplish the above goal.

[BlasterBates]

I get the impression that HMRC are trying to "standardise/simplify" the IR35 investigation so that normal tax inspectors can go ahead and do them. If that were to happen every contractor would have to go through an IR35 check, i.e. it could potentially ramp up very quickly.

This happened in Germany where to begin with no-one was checked whether they were a disguised employee, now virtually everyone has to go through a check a some point.

Of course HMRC might not succeed or decide that most contractors really are outside.

[jamesbrown]

I get the impression that HMRC are trying to "standardise/simplify" the IR35 investigation so that normal tax inspectors can go ahead and do them. If that were to happen every contractor would have to go through an IR35 check, i.e. it could potentially ramp up very quickly.

This happened in Germany where to begin with no-one was checked whether they were a disguised employee, now virtually everyone has to go through a check a some point.

Of course HMRC might not succeed or decide that most contractors really are outside.

I can't see how they could possibly do this without a complete overhaul of the rules to be more definitive and less dependent on complex (and, to some degree, evolving) principles, which have been established through decades of case law. For example, in Australia and possibly other countries, I believe they have definitive rules regarding the % of business originating from a single client. How did they "simplify" in Germany? Ultimately, it's important to remember that it isn't HMRC's decision, but the decision of a tribunal. In short, I don't think there can be any question about standardising or simplifying investigations without a completely new basis in law.

[Batcher]

It wouldn't be the contractors but the contracts that need checked for IR35, Shirley?

[BlasterBates]

I can't see how they could possibly do this without a complete overhaul of the rules to be more definitive and less dependent on complex (and, to some degree, evolving) principles, which have been established through decades of case law. For example, in Australia and possibly other countries, I believe they have definitive rules regarding the % of business originating from a single client. How did they "simplify" in Germany? Ultimately, it's important to remember that it isn't HMRC's decision, but the decision of a tribunal. In short, I don't think there can be any question about standardising or simplifying investigations without a completely new basis in law.

Once you have enough cases, you can check the contract for the clauses, and ask the right question to the PM (eg do you hold weekly meeting, does this guy really send in a substitute, does he work at your premises), and then simply send a bill. Based on previous cases some simple criteria might suffice.

This is more or less how it works in Germany, i.e. a contract review some simple questions and "Here's the bill challenge it , if you will".

Not saying it will happen, but I wouldn't discount it by any means.

Basically put the onus on the contractor to fight it.

This is what they do with EBT loans, no difference in principle. Of course they need sufficient cases to establish a pattern, so they first need to be consistently winning the cases.