State of the Market

[oliverson]

Had an email exchange with my accountant to tidy up some stuff in advance of the tax year end. Direct quote as part of our conversation relating to IR35 and the impact on the contracting industry:

"...the amount of companies closing is unbelievable..."

Real contractors don't wind up their companies when the going gets tough, they keep going. Just shows that most of these are indeed permies, trying their hand at contracting and scurrying back to their permie desks at the first sign of trouble. I mean, FFS, the new legislation hasn't even been passed yet! Good for us though, rates will rise :-D

[mookiemoo]

I'm closing mine - only slightly connected.

I've always taken a risk averse approach outside of IR35 - My war chest is in my account not the company. I pay a bit more tax but take it all out as tax efficiently as possible.

I've always paid an accountant (despite being one myself) in order that the accountant can deal with HMRC in the event of investigation however going forward....... IR35 is a client issue, not mine. Payroll and VAT enquiries are straight forward so long as you keep up with the rules.

Therefore going forward i'm more than happy to do my own accounts. Means that I can keep my own Ltd open if I am operating under a brolly for a caught contract for future outside contracts. The costs are essentially my time and the costs of the annual return and small bank account fee.

So my current one is closing to draw a line under the past. Virtually removes the chance of retrospective investigations (and there's no money in the company even if they do).

Does not mean to say I'm leaving the contract market.

[northernladuk]

Real contractors don't wind up their companies when the going gets tough, they keep going. Just shows that most of these are indeed permies, trying their hand at contracting and scurrying back to their permie desks at the first sign of trouble. I mean, FFS, the new legislation hasn't even been passed yet! Good for us though, rates will rise :-D

I'd broadly agree but the situation does afford options that are worth taking thst weren't really in the cards before. I went inside 2 years ago but kept the business open as I knew it would be a one off. Now that's not so much a given it might be worth putting the effort in to close it (no MVL required or tax advantage gained) just to start with a clean slate later or something.

I think real contractors will understand the situation and make a decision based on what's happening now and possibly the future to do what's right in the longer run.

The others will just knee jerk shut the company. I imagine we will see most of these on here again at sometime.

[oliverson]

I'd broadly agree but the situation does afford options that are worth taking thst weren't really in the cards before. I went inside 2 years ago but kept the business open as I knew it would be a one off. Now that's not so much a given it might be worth putting the effort in to close it (no MVL required or tax advantage gained) just to start with a clean slate later or something.

I think real contractors will understand the situation and make a decision based on what's happening now and possibly the future to do what's right in the longer run.

The others will just knee jerk shut the company. I imagine we will see most of these on here again at sometime.

I lost a lot back in the financial crisis, including my sanity, due to several periods on the bench and no war chest. I won't go into the precise details as I still find it disturbing 10 years later, but would say that throughout that period it never even occurred to me to close my company and take a perm role.

[ContractorHardman]

This whole "Real Contractors" wont shut your company is real contractor arrogance at its best.

If you are paying a monthly fee to an accountant and this takes a year to all blow over then it is probably best for financial and tax reasons to close your company. The problem is if you are a contractor who is use to dealing with bigger companies such as RBS then you are effectively being unfairly blanket banned. We as contractors work on a broad range of projects with a broad range of industries. Some of us work with banks, some with telecoms and others with small companies. If you need to shut your company and take a permie job to keep up the mortgage payments then do it. Don't listen to idiots saying you were never a real contractor.

As I have stated before, IR35 is designed to stop the people sitting in the same role for 5 years claiming to be a contractor. It is just unfortunate that some industries are implementing this unfairly. I am sure that like all markets, there will be a further correction especially with Brexit and our immigration laws.

[tsmith]

Real contractors don't wind up their companies when the going gets tough, they keep going. Just shows that most of these are indeed permies, trying their hand at contracting and scurrying back to their permie desks at the first sign of trouble. I mean, FFS, the new legislation hasn't even been passed yet! Good for us though, rates will rise :-D

For some the environment was already tough 2-3 years or more before IR35. Especially lower demand than developer roles eg Business Analysts, Project Manager/Scrum Masters, Product Managers etc. So this is more a final nail in the coffin aka risk reward ratio of contracting no longer favourable rather than the first sign of trouble.

[wattaj]

I lost a lot back in the financial crisis, including my sanity, due to several periods on the bench and no war chest. I won't go into the precise details as I still find it disturbing 10 years later, but would say that throughout that period it never even occurred to me to close my company and take a perm role.

My emphasis.

Tuppence worth of free health advice: perhaps it should have. Arrogantly holding on in the hope of "better times^TM" is poor practice when one is in need of money to survive.

[PerfectStorm]

Closing up shop now would be absolutely bonkers. What are you doing to do when someone offers you an out-IR35 contract in May? Start a new one with all that brings?

On the plus side, less chaff in the pool.

[northernladuk]

Closing up shop now would be absolutely bonkers. What are you doing to do when someone offers you an out-IR35 contract in May? Start a new one with all that brings?

On the plus side, less chaff in the pool.

Why not?

[BigDataPro]

Had an email exchange with my accountant to tidy up some stuff in advance of the tax year end. Direct quote as part of our conversation relating to IR35 and the impact on the contracting industry:

"...the amount of companies closing is unbelievable..."

Looks like a blessing in disguise. The need for contractors won't go away. Now that the number of CV's agent/client gets will be significantly limited, this bring back the true meaning of contracting.