Crackdown on personal service companies could raise £400m in tax

[LondonManc]

Couldn't agree more. I am struggling with this very issue on my team at the moment. The rule seems to be 'if I have been a BA for more than 3 years in am a senior BA', it doesn't seem to relate to experience.

I have a mix of perm and contract BAs working for me at all levels and I agree with the broad salary bands. A London based perm 'lead' BA can get £50k, but I have a junior BA in Edinburgh on £23k. By comparison I have just released lead BA contract roles paying up to £440 in London, and an Edinburgh based BA role at £342.

My point being that for BA roles at least, the contract market is always much higher than perm.

On top of that, the contract BA is always expected to be Senior BA calibre. Being a BA for three years doesn't mean they're any good. Just look at local sportsmen who have been playing golf for 20 years and are marginally better that when they first started.

In London, I'd say you should have bands where junior is 250-350, standard is 350-450 and senior is anything upwards depending on skills, experience, niche, etc.

We're all lumped in together - you wouldn't lump all levels of person in together in other lines of business.

[MrO666]

Fair point well made by many.

I have no knowledge of BA roles or representative pay scales for either contract or perm.

I guess what I was trying to originally point out is that if the contract ended up having to shoulder both the employer and employee NIC, along with income tax, then the gap between contract and perm would narrow significantly to what it is today.

Couple that with zero rights (more or less), no holiday or sick entitlement, no training (I know not everywhere offers this anyway) then the drive to continue contractor will diminish as the risk vs return won't be great enough (for many at least).

[MrMarkyMark]

Being a BA for three years doesn't mean they're any good.

So much truth in that statement.

I think they are all engaged at current Client Co, the really carp ones that is

[LondonManc]

Fair point well made by many.

I have no knowledge of BA roles or representative pay scales for either contract or perm.

I guess what I was trying to originally point out is that if the contract ended up having to shoulder both the employer and employee NIC, along with income tax, then the gap between contract and perm would narrow significantly to what it is today.

Couple that with zero rights (more or less), no holiday or sick entitlement, no training (I know not everywhere offers this anyway) then the drive to continue contractor will diminish as the risk vs return won't be great enough (for many at least).

All comes down to what the bottom line is in terms of it being worth contracting versus consultancy benefits for me. I don't see any future of interest for me as a pure perm unless it's a step up the management ladder so, it'd most likely be consulting if the contracting risk/reward model becomes too skewed.

[MarkT]

So much truth in that statement.

I think they are all engaged at current Client Co, the really carp ones that is

Sounds fishy to me...

[MrMarkyMark]

All comes down to what the bottom line is in terms of it being worth contracting versus consultancy benefits for me. I don't see any future of interest for me as a pure perm unless it's a step up the management ladder so, it'd most likely be consulting if the contracting risk/reward model becomes too skewed.

This.
If they rip the a*se out of it, it, simply, won't be worth doing.

However, this could be the push needed to generate a better business model.

I think there will be other opportunities, away from the engagement model, currently in existence, now.
In addition, I don't think the consultancies are in any position to take over.
A lot of them hire contractors in to do the work, they have now, I can't see this changing.

[MrO666]

This.
If they rip the a*se out of it, it, simply, won't be worth doing.

However, this could be the push needed to generate a better business model.

I think there will be other opportunities, away from the engagement model, currently in existence, now.
In addition, I don't think the consultancies are in any position to take over.
A lot of them hire contractors in to do the work, they have now, I can't see this changing.

Agreed, I can't see the consultancies take all those contractors onto staff......that would screw their business model as much as HMRC are trying to screw ours.

[xar18]

Fair point well made by many.

I have no knowledge of BA roles or representative pay scales for either contract or perm.

I guess what I was trying to originally point out is that if the contract ended up having to shoulder both the employer and employee NIC, along with income tax, then the gap between contract and perm would narrow significantly to what it is today.

Couple that with zero rights (more or less), no holiday or sick entitlement, no training (I know not everywhere offers this anyway) then the drive to continue contractor will diminish as the risk vs return won't be great enough (for many at least).

I am inclined to agree somewhat, in that the gap between both may make perm a viable alternative if you can land a decent perm role. I suspect that won't be the case for most BA types though was my observation.

The plus side may be that it does encourage some of the dross to exit the contract market and severely discourage others from joining, which based on the quality of BAs I work with/for me, wouldn't necessarily be a bad thing (he says while desperately looking for a silver lining of some sort)

I do wonder if we start to see 'SDC' and 'non SDC' style contracts starting to appear. Might be that specific roles or grades in clientco's might logically for that model. E.g. Current client has perm and contract BAs in the 'practice pool' all of which would be 'SDC' as standard, whereas my role as a business architect is more specialised and could be 'non SDC'. Might be that the client makes the decision at their end based in the level of specialism and with input from the agencies.

No idea though, just thinking out loud about how this could land.

[MrMarkyMark]

I do wonder if we start to see 'SDC' and 'non SDC' style contracts starting to appear. Might be that specific roles or grades in clientco's might logically for that model. E.g. Current client has perm and contract BAs in the 'practice pool' all of which would be 'SDC' as standard, whereas my role as a business architect is more specialised and could be 'non SDC'. Might be that the client makes the decision at their end based in the level of specialism and with input from the agencies.

No idea though, just thinking out loud about how this could land.

If they did do this I would be quite happy.
Clients usually get me in to advise on a specialist area, rather than be a BOS.

As far as D&C, currently goes for me, I last spoke to my line manager around 2 months ago. I send her a weekly report, that's it.

[scottjus82]

Consultants

Hey guys,

I have been reading into the proposed plans a lot and have read a lot of differing opinions on who will be shafted by these proposals. I know no one will know for sure until Wednesday and perhaps longer as we wait for agency's, accountants and legals experts to digest the changes and find the loop holes but would I be right in thinking that this is aimed more at service desk analysts, desktop analysts etc as in a BAU function that should be filled by a PAYE employee? I am a software consultant who works only on software roll-out projects and in the last 18 months I have worked for 5 different clients, is there more of a chance that the work i do will be seen as genuine consultancy or should I "prepare the lube" like everyone else?

Thanks