State of the Market

[Smartie]

I disagree. For a start, it depends on the rate you get inside. It could be just as good as outside, though it's unlikely.
You can mitigate the extra tax cost by putting more into a pension - £60k this year plus go back to fill in the previous 3 years if available. All tax free.

Doing this will net you up to 70% of the rate, rather than the 55%ish if you don't make use of a pension.

My client decided to move all the contractors inside but paid a significantly higher rate to compensate.
Then they got a consultancy to hire us as perms two years ago - the deal was the same income as if contracting.
I've been there over four years now and had the nod for another 6 months.
Currently I pay around a third of the total in tax, a third into my pension and take home a third.

I realise this is a fortunate position to be in, given how the market has been the past couple of years and I have a great deal of sympathy for all the posters here who've been unlucky with the timing and duration of this downturn.

If you need to work, then anything is better than nothing but FTE contracts are really the worst option.

FTE is better than Inside IR35 contracts offering no employment benefits at all. With regards if we want more of them - probably not more than permanent places, however there is sometimes genuine need for temporary workforce, project, short task, maternity etc. If FTE will be offered instead of Inside ones, that would be better.

[SchumiStars]

London is supposed to be one of the global tech places for startups. I have no idea how the cull of wages, IR35, will attract talent into the market.

It maybe more lucrative to be abroad, IT is an international skill set.

It does seem the good days are long behind us. I have posted before that when I started in 2k, there were contractors on £100ph + overtime. These guys would not go home.

[SussexSeagull]

Only thing that changed with the reform is that now employers face consequences of incorrect determination - the determination itself haven't changed a bit. Previously, employers could hire contract workers to spots normally occupied by employees and enjoy flexibility, lack of need of protecting employment rights, reduced risk of unionization, etc with zero tax risk.

If employers would want to hire "genuine businesses" they still would be doing it. Fact that most of the contracts are now offered inside proves the point about previously widespread "disguised employment".

Unfortunately, yes reform has consequences for many contractors who have been doing good for themselves for all those years, myself included. However, many of those contractors never been businesses as all they did was selling their labor, leaving all the product of their work to the client for a day rate. Same way as employee selling their labor to the employer for a wage.

More and more clients aren't doing proper due diligence. The fact someone thinks they are, or indeed might be, a genuine business is largely irrelevant when up against that.

A lot of people remained outside for several decades without any interest from the HMRC. For all intents and purposes they were proper businesses. Hindsight doesn't change that.

[oliverson]

No versus you p155es up against a third holiday and new tesla. Public services are starved of funds thanks to 14 years of Tory mismanagement and decline.

Funny you should say that as I'm month 2 into my Spanish visit and eyeing up a new Tesla for when this one's lease expires next year

Thought you'd gone perm, in which case why are you still on this site?

[Sub]

FTE contracts are the worst of all worlds. A salary equivalent to a permanent hire with fewer benefits and less stability. Why would we want more of those??

FTE is better than Inside IR35 contracts offering no employment benefits at all. With regards if we want more of them - probably not more than permanent places, however there is sometimes genuine need for temporary workforce, project, short task, maternity etc. If FTE will be offered instead of Inside ones, that would be better.

[Smartie]

FTE contracts are the worst of all worlds. A salary equivalent to a permanent hire with fewer benefits and less stability. Why would we want more of those??

Those Inside roles with crap rates (many of them are actually Umbrella roles) only getting filled because overall weak demand for labor and there is not much competition for it. Once the overall situation will improve (and it will, no dip is infinite) there will not be many takers, so employers would need to either up the rate or offer roles as fixed term employment contracts. I hope that govt will have enough will to incentivize latter by curbing use of umbrellas (or ban them completely, who knows!). However, with PM defining "working people" as ones who "get their income from work", that is probably too nuanced to happen.

What unlikely to happen is return to widespread availability of Outside roles. There still will be market for niche skills, combined with right clearance and certifications, however with HMRC reportedly starting to police IR35 compliance, such roles will be relatively rare. And ones who going to stay in this market will need to run proper business operation (brand, marketing, service offerings, multiple clients) rather than sending CVs to agencies.

[Sub]

That's all well and good but you don't get to decide if you are a genuine business or not anymore.

Only thing that changed with the reform is that now employers face consequences of incorrect determination - the determination itself haven't changed a bit. Previously, employers could hire contract workers to spots normally occupied by employees and enjoy flexibility, lack of need of protecting employment rights, reduced risk of unionization, etc with zero tax risk.

If employers would want to hire "genuine businesses" they still would be doing it. Fact that most of the contracts are now offered inside proves the point about previously widespread "disguised employment".

Unfortunately, yes reform has consequences for many contractors who have been doing good for themselves for all those years, myself included. However, many of those contractors never been businesses as all they did was selling their labor, leaving all the product of their work to the client for a day rate. Same way as employee selling their labor to the employer for a wage.

[Sub]

Well so far we've seen a massive reduction in outside roles and 95% of what is out there is inside but on crap rates, so worse than actual perm. Not sure this is positive for anyone running a business.

Those Inside roles with crap rates (many of them are actually Umbrella roles) only getting filled because overall weak demand for labor and there is not much competition for it. Once the overall situation will improve (and it will, no dip is infinite) there will not be many takers, so employers would need to either up the rate or offer roles as fixed term employment contracts. I hope that govt will have enough will to incentivize latter by curbing use of umbrellas (or ban them completely, who knows!). However, with PM defining "working people" as ones who "get their income from work", that is probably too nuanced to happen.

What unlikely to happen is return to widespread availability of Outside roles. There still will be market for niche skills, combined with right clearance and certifications, however with HMRC reportedly starting to police IR35 compliance, such roles will be relatively rare. And ones who going to stay in this market will need to run proper business operation (brand, marketing, service offerings, multiple clients) rather than sending CVs to agencies.

[SussexSeagull]

Seems like IR35 reform is working well - many of the contractors, who previously claimed to be in some kind of "business" transitioning into permies and finding that this is working for them.

That is positive thing in the long run. First, more workers will be subjected to employment legislation, meaning more social contribution from employers and secondly there will be less supply on the contract market allowing contractors who actually running businesses to make decent living.

I hope we also see regulation on use of umbrellas - this is long overdue.

That's all well and good but you don't get to decide if you are a genuine business or not anymore.

[dsc]

Seems like IR35 reform is working well - [...]secondly there will be less supply on the contract market allowing contractors who actually running businesses to make decent living.[...]

Well so far we've seen a massive reduction in outside roles and 95% of what is out there is inside but on crap rates, so worse than actual perm. Not sure this is positive for anyone running a business.