State of the Market

[SussexSeagull]

Sure, it mitigates, but HMRC won't be happy until there is parity or worse, in their view and, since the benefits of "flexibility" afforded by contractors to the wider economy are hard to quantify (but, no doubt, real), ministers - particularly Labour ministers - will tend to listen to HMRC w/r to the "tax gap" and focus on that.

Sorting out employment status is very, very hard - which is why it hasn't been done - and there will most likely be some severe downstream consequences. For example, if they go with strict deeming criteria, like other jurisdictions, you will get most of the downsides w/r to loss of flexibility, while the expected extra tax may be lower than expected if it becomes easier to game the criteria. One of the problems with employment status is that you cannot really address it independently of tax, but they are nevertheless distinct bodies of legislation, presently.

The further problem is contractors aren't really the intended target for employment status reform so will be low down the list of people who consideration will be given to.

[jamesbrown]

The further problem is contractors aren't really the intended target for employment status reform so will be low down the list of people who consideration will be given to.

Absolutely, it's the low-skilled/low-earning workers that should really be unionised employees who are the target of these reforms - platform workers, for example - but high-earning contractors will be squarely caught up in it and, honestly, it will be very hard, perhaps impossible, for them to not screw it up.

[SchumiStars]

Was talking to my friend, a small business owner. He was saying that prior to COVID he struggled to find staff but now he has people literally knocking on his door asking for work.

Also told me that the freshies have to also pay some sort of 10-year-visa-plan, which is around £2k per year.

No wonder the govmt love immigration. It literally is cash cow for not offering much more than what is here. Supported by the current infrastructure.

[Bluenose]

Currently sat on my roof terrace in Southern Spain, contemplating whether i could move here full time. Any tax rise on dividends, no matter how significant, would probably tip the balance. Digital Nomad Visa for me and my US client. 24% flat rate tax. Bye bye broken Britain.

It's actually lower than 24% as you can offset the UK NICs as a cost, it can go as low as 12%.

[SussexSeagull]

Was talking to my friend, a small business owner. He was saying that prior to COVID he struggled to find staff but now he has people literally knocking on his door asking for work.

Also told me that the freshies have to also pay some sort of 10-year-visa-plan, which is around £2k per year.

No wonder the govmt love immigration. It literally is cash cow for not offering much more than what is here. Supported by the current infrastructure.

Not so good when you have to start paying people benefits because they can't find work.

[dsc]

[...]but high-earning contractors will be squarely caught up in it and, honestly, it will be very hard, perhaps impossible, for them to not screw it up.

This is why it always makes me laugh when people here say that the gov needs to fix this or that for us to make more money / get jobs etc. As if we are the priority

[SussexSeagull]

This is why it always makes me laugh when people here say that the gov needs to fix this or that for us to make more money / get jobs etc. As if we are the priority

I think contractors current challenges are only a symptom of a wider problem. I know it is unscientific but looking on LinkedIn I am not sure the permanent market is much better and IT recruitment is a blood bath at the moment.

[willendure]

This is why it always makes me laugh when people here say that the gov needs to fix this or that for us to make more money / get jobs etc. As if we are the priority

Exactly - as a contractor I never complain because I know I had a good deal. I remember once working for a government department, and they screwed up their budget, so at xmas time they told all the contractors unexpectedly to take a full 3 weeks off. This happened on the day before we were winding up for xmas, no notice or anything. And they all whined about it apart from me. I was thinking, great 3 weeks off for me to do all the tulip I need to do, and I've got a job to come back to in January, so bonus!

What I wanted to say is, there is a problem in the UK and it extends to most western countries. That is that the boomers are retiring, shrinking the productivity of the economy, and going from high earners to tight fisted pensioners overnight; that significantly changes how they view their capital. You can see how this played out in Japan already and from that derive a picture of how this will be and is affecting the UK. In many ways it didn't really matter which party we elected at the last election because they all face this issue. Since demographics is "baked in" and cannot be changed, there are no easy solutions. A major difference with Japan is that they don't have immigration like we do. Hence they have found remaining politically unified easier as a population with a more singular ethnicity. The difficulty the UK has is that immigration is a possible solution to demographics through filling in desirable age ranges by recruiting from abroad, but that also increases political division.

So tough choices indeed, and contractors are not a priority. But also we've been hit in the past by tax changes, how much is left to squeeze out of us, or are their more ambitious targets that mean we get overlooked?

Rumours of 45% on all dividends sound a little paranoid.

[hungry_hog]

If anyone here is in FS, Citi is hiring extensively. I get about 2 emails a week from agents for them. Even when it's not mentioned you can tell from the terminology who it is.

They are always hiring, make of that what you will

[dsc]

I think contractors current challenges are only a symptom of a wider problem. I know it is unscientific but looking on LinkedIn I am not sure the permanent market is much better and IT recruitment is a blood bath at the moment.

If that's the case, then contractors who think some gov will just swoop in and fix all their issues are even more delusional. We are really at the very far end of the queue of things to fix and overall are pretty well ahead of permies in terms of taxes / pay etc. That gap is getting smaller each year, which is only a win for HMRC.