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

[DimPrawn]

That's just it - they are changing the law, or at least that's what a grim interpretation of the proposals believes will happen. So previous case law is irrelevant.

Yep, and it's guilty until your £1000/hr barrister proves otherwise in court.

[SueEllen]

Maybe recruiter model will change to a finders fee. Pretty sure you're not under SDC if the recruiter places you and collects a flat £xxx fee instead of billing etc. via them.

Or even if they simply introduce you and the contractor bills the client and the recruiter bills the client too for some fee.

Basically cut out the recruiter handling timesheets etc.

A couple of agencies do this already. Though one of them mostly has foreign operations which probably explains why they have this model.

[NotAllThere]

If you can earn double a permie's gross as a contractor how can it not still be worth being a contractor even paying tax at a higher rate than a permie on the same salary, whose employer can offset their expenses against taxes.

Fixed that for you.

[DaveB]

If you can earn double a permie's gross as a contractor how can it not still be worth being a contractor even paying the same rate of tax as everyone else?

You're only really getting back 20% of expenses as things stand now, so is having to pay that 20% of a B&B bill really going to "screw the 'stay away' crowd"?

Yes, Because...

If your Ltd reimburses you your T&S costs that will be counted as remuneration and not expenses, so you will then pay tax on that as if it was salary. Your company will not be able to claim tax relief on it. If the company pays T&S on your behalf then it will be regarded as BIK and taxed accordingly, and the company will not get tax relief on it.

We would not just lose the 20% relief, we would end up paying tax on the cost of expenses as well.

[ShandyDrinker]

I wonder what the Pimps would make of this, especially as Reed have just had their appeal refused for £158m in tax on T&S for their temps.

Combine that with contractors making an effort to start going direct and it could well have an effect on their business.

We could start seeing them working on a fixed fee baisis as they do with permie recruits, rather than a %tge of day rate, with the contracts for work being direct between client and contractor.

A very sensible suggestion as a way around the issue. Unfortunately I don't think it's that trivial though. Like them or hate them, recruitment agencies are not only sourcing the roles but providing an important payment smoothing service to the contractor market in that many will allow weekly invoicing by contractors and not get paid for 30,60 or 90 days by the client. As a result think of recruitment agencies as an invoice factoring service too. Having gone direct a few times I know how painful it can be chasing clients for money in addition to doing the actual contract.

Yes, Because...

If your Ltd reimburses you your T&S costs that will be counted as remuneration and not expenses, so you will then pay tax on that as if it was salary. Your company will not be able to claim tax relief on it. If the company pays T&S on your behalf then it will be regarded as BIK and taxed accordingly, and the company will not get tax relief on it.

We would not just lose the 20% relief, we would end up paying tax on the cost of expenses as well.

Spot on. Unfortunately the stay away crowd will be completely shafted if these changes are implemented. As someone who has worked a number of contracts in that way, the only way I would even consider a role entailing travel/accommodation in the future would be if the client pays.

[vwdan]

Yes, Because...

If your Ltd reimburses you your T&S costs that will be counted as remuneration and not expenses, so you will then pay tax on that as if it was salary. Your company will not be able to claim tax relief on it. If the company pays T&S on your behalf then it will be regarded as BIK and taxed accordingly, and the company will not get tax relief on it.

We would not just lose the 20% relief, we would end up paying tax on the cost of expenses as well.

Exactly, and as someone whose work will nearly always involve lots of travel it's an absolute killer.

[SimonMac]

For those who say we just go direct in future, what incentives are their for the client to help up? The main reason they use agencies is to make their life easier in the first place.

[SimonMac]

If I also read this right, its not just expenses we are being hit with, we are going to be automatically deemed within IR35? If this is the case what is the point of running our own LtdCo anymore, the brollys must be happy(ish)

[ginge]

I did go direct, got my first contract via an ex-colleague, but I'm still with an agent as the big corp handles all contractors through the agent.

As has been said already, big corps use agents to handle this because it's easier, and I'd guess they'd have to have a lot of contractors all the time to make it worth their while doing it in-house so we could contract direct...

[SpontaneousOrder]

Not quite into the contractor thing yet

Why would I pay the 'appropriate' taxes on 5 hours of travel per day, and a hotel stay in London when I'm not travelling? When I could just go permie locally instead?