Why we MUST ditch our lazy attitude to finding work through agents and agencies

[Zero Liability]

We're already seeing this. Look at some of the recent articles on this website and contractorcalculator. I'm sure someone will post evidence to the contrary but it's interesting how skills shortages are rarely reported for "closed shops" such as lawyers, accountants and so on where the hourly rates can be eye watering.

They do actually get reported for accountants from time to time, in Accountancy Age, every few months or so. Not as acute as with IT.

[d000hg]

But then HMRC can't punish people they're jealous of

The people making these decisions are probably earning more than us.

[ShandyDrinker]

They do actually get reported for accountants from time to time, in Accountancy Age, every few months or so. Not as acute as with IT.

That's me corrected

Joking aside I guess you're right with it not being as acute as IT. This is more than likely down to the fact that the IT industry moves so quickly and many use keyword searches so I can see how all of a sudden you have a shortage of Software Engineers but not Web Developers and so on.

[jamesbrown]

HMRC's beef is that more people than HMG intended are getting tax relief on T&S expenses. We can assume that this is due to the fact that vast numbers of low paid workers have been forced to work through brollies or PSC's so that companies can avoid employment costs. If that's the case then why not implement something along the lines that Eek's suggested but rule that workers under a certain income threshold cannot be engaged through an intermediary - that would move them all back into permanent employment or FTC's (banning of zero hours contracts would prevent exploitation) and lots of HMRC's problems would be solved. By constantly aligning tax legislation to employment law they have to use a sledge hammer to crack a nut most of the time - if they stick with numbers all our lives will be a lot easier

Instinctively, I'm against absolutely anything that makes a distinction between businesses. For example, any suggestion about automatic rules based on length of contract, numbers of contracts within a fixed period, or proportion of income from a particular client are anti-competitive and discriminatory. Inherently, I also don't like the idea of discriminating on the basis of trade or turnover. There's a divide and conquer element to this; naturally, it will please some, and you're probably talking to the converted on CUK with a low bar on income.

Of equal importance though, such rules will be easier to circumvent through other artificial structures and, for that reason, they will be more difficult to sell. I think it's an idea worthy of further consideration and development, but it would need to overcome some difficult problems: 1) the potentially discriminatory nature of such rules; 2) the opportunities for avoidance; and 3) the practical issues surrounding enforcement. For example, what happens when a contractor has a quiet period or decides to take several months out? Quite quickly, you either need to complicate the rule of suffer the inequity of the simpler rule. Perhaps we're at that point. However, my sense is that we're better off pushing back on a more fundamental level in terms of the implied discrimination between small and large businesses and the implications for the flexible workforce (including for gov't departments, I might add), even if that doesn't ultimately work - and I don't think the prospects are good.

[LisaContractorUmbrella]

Instinctively, I'm against absolutely anything that makes a distinction between businesses. For example, any suggestion about automatic rules based on length of contract, numbers of contracts within a fixed period, or proportion of income from a particular client are anti-competitive and discriminatory. Inherently, I also don't like the idea of discriminating on the basis of trade or turnover. There's a divide and conquer element to this; naturally, it will please some, and you're probably talking to the converted on CUK with a low bar on income.

Of equal importance though, such rules will be easier to circumvent through other artificial structures and, for that reason, they will be more difficult to sell. I think it's an idea worthy of further consideration and development, but it would need to overcome some difficult problems: 1) the potentially discriminatory nature of such rules; 2) the opportunities for avoidance; and 3) the practical issues surrounding enforcement. For example, what happens when a contractor has a quiet period or decides to take several months out? Quite quickly, you either need to complicate the rule of suffer the inequity of the simpler rule. Perhaps we're at that point. However, my sense is that we're better off pushing back on a more fundamental level in terms of the implied discrimination between small and large businesses and the implications for the flexible workforce (including for gov't departments, I might add), even if that doesn't ultimately work - and I don't think the prospects are good.

What avoidance schemes do you think could be put in place - with RTI it would be tricky I would have thought. It is discriminatory yes but contractors are being discriminated against already. Again with RTI and agency reporting it should be much easier to enforce than IR35 or determining SDC

[SlipTheJab]

Permies get a lot of things that contractors don't. Holiday pay. Sick pay. I am sure there are loads more.

They also get (quite rightly) to claim 100% of ad hoc travel costs as the permies I work with do, I pay 100+ for an occasional return to london and get 20% tax relief, the permies get 100% of that cost back.

[jamesbrown]

What avoidance schemes do you think could be put in place - with RTI it would be tricky I would have thought. It is discriminatory yes but contractors are being discriminated against already. Again with RTI and agency reporting it should be much easier to enforce than IR35 or determining SDC

As I say, I think it's worthy of further consideration and development. In terms of simpler rules being easier to circumvent through artificial structures, I'm speaking generally rather than specifically; it would depend on the specific proposal. For example, what would prevent a number of low-paid workers collectively forming a company and meeting a turnover requirement? If it's based on hourly or daily rate, would it be possible to circumvent this through artificial (tiered) rate structures or nominally "fixed price" work? It depends on the proposal. However, low paid workers aren't driving this avoidance; it's being driven by employers that are trying to save employment taxes and avoid regulations. They have the resources to develop ingenious mechanisms to circumvent simple rules and remain within the letter of the law. It's tougher to circumvent the vagaries of SDC. A scalpel is naturally better than a sledgehammer, but there's a reason that this hasn't been possible before; nevertheless, I think it's worthy of consideration and development.

[Platypus]

They also get (quite rightly) to claim 100% of ad hoc travel costs as the permies I work with do, I pay 100+ for an occasional return to London and get 20% tax relief, the permies get 100% of that cost back.

Rubbish! I personally get 100% back from MyCo when I buy a train ticket. MyCo and I are not the same thing, as you very well know.

[SlipTheJab]

Rubbish! I personally get 100% back from MyCo when I buy a train ticket. MyCo and I are not the same thing, as you very well know.

Jeez... you know what I mean...

[MarillionFan]

It may have been said already. I got 10 pages in and didn't see it. But why not negotiate a contract where T&E is part of the contract. That way you push the T&E onto the client. I do this with my contractors now. Any expenses they accrue I pay them back.