Death of the Contractor

[TechJinx]

No way the government is going to kill off contracting - they rely too heavily on contractors for way to many core positions especially in IT, but also in temporary management and projects work.

I'm currently second in charge of a smallish gov IT dept, civil service rules prevent us paying permanent people the salary you need to to secure skills (testing talent is going through the roof compared to 12 months ago), however we can always put together a case to fund temporary staff to close to market rates! Makes no sense long term.
I'm only here as a contractor cause my boss couldn't wait the 6 months or so he'd have to have buggered about to hire in someone to SCS level as a permie.

Lots of noise gets made like any political game, some high profile announcements get made, poor legislation goes in and people high up in government then start panicking about business critical people set to walk

[jamesbrown]

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.

As it stands, the working practices determine status, so it wouldn't be enough to check a contract. In other words, "OK, I'll challenge it" would be the ordinary response and the system would then collapse because the rules necessarily apply case-by-case (contract-by-contract, based on working practices, i.e. "patterns" don't come into it). This is what I mean about changing the basis in law to make the rules more definitive and less case-dependent. Unless they do that, it would be impossible to ramp up the number of investigations by orders of magnitude.

[DigitalUser]

I think we are already at the beginning of the end of contracting. I don't think IR35 has any relevance to it. Rates are low, contracts are getting less and less and it is all to do with foreign workers and sadly this is never going to get better.

I've been contracting for two years - my rates have gone up 50%, roles are buoyant in my area of expertise and I have little competition from foreign workers. I also maintains D&C when working so IR35 doesn't affect me.

In short - I don't think you can make a sweeping generalisation about the market.

Sent from my Nexus 4 using Tapatalk

[NorthWestPerm2Contr]

1) IT contracts are as lucrative as ever. I have seen crap developers on 500+/day.

2) I am trying to get out of contracting like many others. Hopefully it won't matter to me in a few years time either way.

[tractor]

...

1) IT contracts are as lucrative as ever. I have seen crap developers on 500+/day.

2) I am trying to get out of contracting like many others. Hopefully it won't matter to me in a few years time either way.

True, but crap developers were on £500/day in 2000. Many had only just come from 24 months of scanning mainframe code for 2 digit years and that was their main 'in' to development.

Anyone still in the game is probably on a avg of 350-500 now going by the roles I see daily from Jobserve etc.

The popular trend is now of course to have an army of PMO people on every project paid as much as avg devs.

Whilst we have gone backwards in terms of rate, typically we are pretty much in the same position as we were in 15 years ago except we have learned to live with IR35. My fear is that they change it for something else.

If you discount 7 years of recession, £500 should be around £740 now

[Alan @ BroomeAffinity]

Although none of us have a crystal ball, I take great confidence that contracting is here to stay for the foreseeable, from the fact that Sovereign Capital paid £100m+ for Nixon Williams and SJD - advisers who deal exclusively in contractors. If the contracting model was to die, the business would be worth about £100m+ less than they paid for it. That's a massive b*ll*ock to drop and that seems very unlikely.

[BolshieBastard]

True, but crap developers were on £500/day in 2000. Many had only just come from 24 months of scanning mainframe code for 2 digit years and that was their main 'in' to development.

Anyone still in the game is probably on a avg of 350-500 now going by the roles I see daily from Jobserve etc.

The popular trend is now of course to have an army of PMO people on every project paid as much as avg devs.

Whilst we have gone backwards in terms of rate, typically we are pretty much in the same position as we were in 15 years ago except we have learned to live with IR35. My fear is that they change it for something else.

If you discount 7 years of recession, £500 should be around £740 now

Would agree with most of this except 15 years ago, I'd been contracting for 2 years. Contracts were still 6 months \ 26 weeks with 3 monthers still being virtually unheard of. I was getting tuliploads (and I mean tuliploads) of calls by agents trying to tempt me to move to their role. Rates were still going up. Oh, and I still got took out for free nosh by the agency I was working for.

Before I packed in, calls were few and far between and normally fishing exercises. Rates were positively being driven down. 6 mont contracts had all but vanished.

Although none of us have a crystal ball, I take great confidence that contracting is here to stay for the foreseeable, from the fact that Sovereign Capital paid £100m+ for Nixon Williams and SJD - advisers who deal exclusively in contractors. If the contracting model was to die, the business would be worth about £100m+ less than they paid for it. That's a massive b*ll*ock to drop and that seems very unlikely.

Wouldnt be so certain. The financial world is full of companies paying tuliploads of money for another company and it all going mamories upwards. Just look at friends reunited, sold for £100m(?) to ITV and binned off, Iceland (frozen food co) sold to hundreds of millions, eventually bought back by the original owner for peanuts.

But hey, what do I care?

[DTexas]

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?
.

Add to this the emergence of 'screening teams' used by the likes of Aviva, EE, Lloyds... (see my other post on this) who employ young, immature, badly trained 'screeners' with no idea of a contractor's way of life and demand to see your emails and bank statements for you to justify yourself... yes, I'd say contracting is dying and personally I'm looking for permie.

[malvolio]

There are four HMRC IR35 teams who do nothing else. We obviously won't be told what risk criteria they use to select cases but they are getting better at it so they targeting people more effectively. However, as far as I know, none of the usual suspects have lost a case anyway, so overall the risk to us hasn't changed that much.

There are two main reasons they won't automate it so any Hector can have a go (apart from them having tried and failed to make that work...); the legislation is too woolly to provide binary answers, and HMT are leaning on them to stop wasting money on things they can't win.

OTOH, of course, the essence of an IR35 defence is proving a negative: our legal representation guys are going to be busy for while longer. You want to keep off the radar, the rules haven't changed; don't make mistakes, hit all the deadlines, pay divis, salary and expenses separately and don't take regular identical dividends that look like monthly salaries.

[jamesbrown]

You want to keep off the radar, the rules haven't changed; don't make mistakes, hit all the deadlines, pay divis, salary and expenses separately

With you up to there...

and don't take regular identical dividends that look like monthly salaries.

Personally, I don't see much point in paying regular dividends but I equally can't see how irregular ones would keep you off any radar given that the SATR includes total dividends only and, in any case, paying monthly dividends is perfectly legal. There are relatively few rules with dividends and they are simple; pay them from distributable profits and complete the proper paperwork.