Death of the Contractor

[turbowoowoo]

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..

[Zero Liability]

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.

[jamesbrown]

Certain types of contracting, perhaps. However, there will always be a market for highly-skilled contractors that are required to work on finite projects/processes, where the cost of investing in permies is, and always will be, prohibitive. I'm not in IT, but the impression I get from this forum is that offshoring has already fundamentally changed the contracting market for more generic IT skillsets. I can't see why (tax) legislation would be overly important though, at least to anyone that went into contracting for the lifestyle.

[SussexSeagull]

It will vary from sector to sector and discipline to discipline but so long as companies don't invest in training and developing their own people there will be a need for contractors. Also, we seem to have seen the high water mark of off shoring (besides which, skilled people in India are eventually going to want better rewards, reducing further the cost saving).

IR35? I am sure it will get replaced one day but the dance between us, the HMRC and accountants will no doubt go on forever.

For all the advances in technology, deliver times never seem to get any quicker.

[cherhill]

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..

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.

[Zero Liability]

It will vary from sector to sector and discipline to discipline but so long as companies don't invest in training and developing their own people there will be a need for contractors. Also, we seem to have seen the high water mark of off shoring (besides which, skilled people in India are eventually going to want better rewards, reducing further the cost saving).

IR35? I am sure it will get replaced one day but the dance between us, the HMRC and accountants will no doubt go on forever.

If - and it is a big if - they wanted to clamp down on contracting, I'd expect new legislation, as IR35 is very cost-ineffective in terms of direct yield, even if you believe HMRC's likely fabricated figures, which still aren't too rosy. However, not even Labour appear likely to put an end to contracting in its current form. The HoL weren't too impressed by HMRC's defence of the measure and the government's response was, frankly, pitiful. So I don't think it'll have anything to do with the death of contracting.

[SussexSeagull]

If - and it is a big if - they wanted to clamp down on contracting, I'd expect new legislation, as IR35 is very cost-ineffective in terms of direct yield, even if you believe HMRC's likely fabricated figures, which still aren't too rosy. However, not even Labour appear likely to put an end to contracting in its current form. The HoL weren't too impressed by HMRC's defence of the measure and the government's response was, frankly, pitiful. So I don't think it'll have anything to do with the death of contracting.

I don't think it will ever be more than a secondary issue, unless new legislation is brought in and there is little or no financial advantage in contracting when bearing in mind lack of paid holiday, etc. As you say, that is doubtful.

It sometimes gets forgotten we are part of the wider economy and salaries have been flat for a decade so we should't be surprised rates have levelled out (gone down in real terms).

I suspect established contractors will be OK but with outsourcing companies are not getting in graduates or other youngsters of promise who might have gone on to be contractors ten years later. The only exemption to this are the Accentures of this world who seem to produce legions of sub-Apprentice candidate wannabes.

A combination of successive Governments allowing cheap Indian resource in ahead of developing our own and a complete lack of vision in banking or finance in backing the UK Facebook (or next big thing) will eventually turn us into a backwater but most of us will be OK.

[TheFaQQer]

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?

I don't see how APNs or IR35 will have any meaningful impact on contracting - they are non-issues for the clients who are the ones who obviously drive the market.

Rate cutting and off-shoring are only available to certain skillsets and markets - if you can get the same thing cheaper, then there is no real case for not doing that. The key is to be in a position or market where you make that replacement harder and harder to do - high skill areas, areas which require work to be done with the users face-to-face, even security cleared work spring to mind. Maybe I'm lucky, but I've not faced a rate cut, and I've only had one contract end early (which with the benefit of hindsight was probably my fault).

[TheFaQQer]

If - and it is a big if - they wanted to clamp down on contracting, I'd expect new legislation, as IR35 is very cost-ineffective in terms of direct yield, even if you believe HMRC's likely fabricated figures, which still aren't too rosy. However, not even Labour appear likely to put an end to contracting in its current form. The HoL weren't too impressed by HMRC's defence of the measure and the government's response was, frankly, pitiful. So I don't think it'll have anything to do with the death of contracting.

1) Create a new corporate vehicle which is used by independent professionals / microbusinesses
2) Legislate that agencies can only deal with this vehicle or an umbrella paying full PAYE
3) Sit back and watch the money roll in

No need to do anything with IR35 - that's still there for those that don't find work via agencies and still use a limited company.

[Dallas]

are you kidding, get in risk/reg projects, the demand is crazy and will continue as long as you stay relevant....