State of the Market

[Fraidycat]

It's quite straightforward, IR35 is concerned with establishing whether the hypothetical contract between the client and the contractor, personally, looks like one of employment, given the actual working practices. If you are progressing to or from an employed position at the same "client" without a fundamental change in working practices (that is very easily evidenced and documented), then it should be rather easy to establish that the hypothetical contract was indeed akin to employment and, therefore, inside IR35.

I cant see how it makes any difference as long as you can document/prove all previous contracts were outside on their own terms. The fact then you then go perm and then become part and parcel, get paid for holidays etc shouldn't effect your previous status as long as all previous contracts were legit outside IR35.

[jamesbrown]

I cant see how it makes any difference as long as you can document/prove all previous contracts were outside on their own terms. The fact then you then go perm and then become part and parcel, get paid for holidays etc shouldn't effect your previous status as long as all previous contracts were legit outside IR35.

You can take a horse to water...

If you can establish that the contract had fundamentally different working practices than the employment, then you are in the best case scenario, which means that you (and the client) will still be a target for investigation (), but you will probably be left with the huge benefit of a prolonged period of stress and some lost time and money, but not a huge tax bill. Yay.

Crucially, almost all of these scenarios that involve a transition to or from employment are administered by clueless contractors and clients, so you can be pretty sure that there wasn't a fundamental change in working practices that was carefully documented and, most likely, any assessment of IR35 was itself pretty cursory and engaged with the contractual terms alone. Rather, the numpty contractor continued business as usual and the numpty supply chain was happy to continue as though nothing had changed. Good luck with that.

Seriously, do you really think that someone doing roughly the same things under two separate contractual arrangements will really win their argument that they were apples and pears? Literally the whole point of IR35 is to look through this cretinous fluff to establish a hypothetical contract based on actual working practices. Your absolute best hope is that you never get investigated. There is a good chance you won't, to be fair.

As I keep saying, Chapter 10 is far from risk free w/r to where the liabilities will eventually fall. Ultimately, if there is an employer and employee and the employer makes a mistake with the taxation of employee income, any underpaid tax will be recovered from the employee. You don't get to keep the money. In principle, the same could happen with Chapter 10. We'll have to wait and see.

[edison]

You can take a horse to water...

If you can establish that the contract had fundamentally different working practices than the employment, then you are in the best case scenario, which means that you (and the client) will still be a target for investigation (), but you will probably be left with the huge benefit of a prolonged period of stress and some lost time and money, but not a huge tax bill. Yay.

Crucially, almost all of these scenarios that involve a transition to or from employment are administered by clueless contractors and clients, so you can be pretty sure that there wasn't a fundamental change in working practices that was carefully documented and, most likely, any assessment of IR35 was itself pretty cursory and engaged with the contractual terms alone. Rather, the numpty contractor continued business as usual and the numpty supply chain was happy to continue as though nothing had changed. Good luck with that.

Seriously, do you really think that someone doing roughly the same things under two separate contractual arrangements will really win their argument that they were apples and pears? Literally the whole point of IR35 is to look through this cretinous fluff to establish a hypothetical contract based on actual working practices. Your absolute best hope is that you never get investigated. There is a good chance you won't, to be fair.

As I keep saying, Chapter 10 is far from risk free w/r to where the liabilities will eventually fall. Ultimately, if there is an employer and employee and the employer makes a mistake with the taxation of employee income, any underpaid tax will be recovered from the employee. You don't get to keep the money. In principle, the same could happen with Chapter 10. We'll have to wait and see.

I was offered a perm role pre-Covid after doing it as an interim for over a year. I had really enjoyed it, had a great client manager and good team and it was one of the best places I ever worked.

However, I was still a bit concerned about the IR35 implications, even though my working practices were fairly distinct - e.g. I had SOWs, wasn't allowed to conduct appraisals or approve invoices etc and the working practices had been reviewed by QDOS as compliant.

Maybe I was a bit too cautious and given the market over the last 1-2 years, part of me wishes I had taken the perm role as the package offered was very good.

[Bluenose]

Getting it back on topic.

Its a bit of summer lul at work and I did have a good mooch around social media.

wow there's some really desperate people out there looking for work. Main areas affected apart from recruitment seem to be software development and HR.

I saw a statistic last week that HR has a human factor gearing % of approx 65% which , simply put, means that it is one of those areas where automation can have a really big impact.

For example asking a chatbot questions about your payroll status etc. is something easily created now and those jobs ain't coming back.

Reading some posts on social media, i am not sure people in HR have got that memo yet, even after a year out of work.

[SussexSeagull]

I would have thought going permanent is less of a risk than going outside to inside. It is entirely possible to have been genuinely outside as a contractor and the working conditions to change when you become a permanent employee.

Gets a bit murkier when going from outside to inside.

[Protagoras]

Given the apparent state of 'the market' my guess is that more people will be prepared to risk 'outside' to 'inside' that might previously have been the case.

Balancing the risk against possibly having no income for 12 months plus - as seems to be common - is not an enviable position.

Speaking to people I know who are permy or settled in long contracts there seems to be zero appreciation of how bad things are out there.

What horrible times we're now in.

[AndyGarbs]

You can take a horse to water...

But a pencil must be lead

[Dorkeaux]

Given the apparent state of 'the market' my guess is that more people will be prepared to risk 'outside' to 'inside' that might previously have been the case.

Balancing the risk against possibly having no income for 12 months plus - as seems to be common - is not an enviable position.

Speaking to people I know who are permy or settled in long contracts there seems to be zero appreciation of how bad things are out there.

What horrible times we're now in.

Agreed. I thought of this when seeing employment positions judged by forum posters as being inside IR35, "permietracting" and so on.
As if there are absolute binary laws in place of which they are the arbiter.

The very sad fact is that there is little connection between the law, HMRC's "guidelines", what they choose to enforce, and the likely outcome to you.
It would be great if there was, and the law was clear and clearly enforced. But it isn't.

If a client puts a junior or two underneath you (fnarr..) on a contract designated outside IR35, will you give them a piece of your mind and flounce off? Maybe after reporting yourself to Hector?
In a tight market? With a mortgage due?
Didn't think so..


About the zero appreciation, this forum reminds me contantly what it's like out there. Part of it's value.
I have one or two close colleagues who have been out of employment long term, but although my rates have dropped to meet what what market will bear I'm mostly in work and surrounded by other contractors and permies.

But market forces, laws and age will likely come for me too. I prepare as best as I can.

[DrGUID]

I thought I was in something secure, then I got TUPE'd, then I got made redundant. No good ever comes of TUPE if you're in IT.

The crumb of comfort is that the Jobserve daily openings are edging up. IT has been cyclical in all the time I've been a dev (since 1997) and I expect the bottom was back in December. Interest rate cuts will help.

I have a large warchest and I was fortunate to start building stock trading bots last year. To be perfectly honest, there's just no money in software anymore, unless you're a megacap tech company that can plumb useless AI functionality into existing business systems. Even then I reckon AI will eat itself.

If I was younger I'd retrain as something else.

[jamesbrown]

Agreed. I thought of this when seeing employment positions judged by forum posters as being inside IR35, "permietracting" and so on.
As if there are absolute binary laws in place of which they are the arbiter.

The very sad fact is that there is little connection between the law, HMRC's "guidelines", what they choose to enforce, and the likely outcome to you.
It would be great if there was, and the law was clear and clearly enforced. But it isn't.

If a client puts a junior or two underneath you (fnarr..) on a contract designated outside IR35, will you give them a piece of your mind and flounce off? Maybe after reporting yourself to Hector?
In a tight market? With a mortgage due?
Didn't think so..


About the zero appreciation, this forum reminds me contantly what it's like out there. Part of it's value.
I have one or two close colleagues who have been out of employment long term, but although my rates have dropped to meet what what market will bear I'm mostly in work and surrounded by other contractors and permies.

But market forces, laws and age will likely come for me too. I prepare as best as I can.

If you understand the risk and accept it because you're in a tough spot, that's one thing. The reality is that this forum is the pinnacle of understanding of IR35 among the contractors out there, and 90% of this forum is absolutely clueless. The joys of UK tax law and hoping for the best.