Indian Visa Scheme and IR35

[DoctorStrangelove]

WTF is 'PE'???

AKA "The Kiss of Death".

[Bluenose]

no I mean specifically in regard to the NI liability. I agree that other aspects are bad. We can't claim that they get a NI advantage over us if in fact they have to pay their own NI (in India).

factually correct there is a 'but' which is that if the salary paid is 20-30k lower (as an average) as the salary is an Indian one then it is an income tax and NI cut.

The cut is transfer of a loss from HMRC to a profit for Indian corp shareholders and shareholders of any corporation that swaps out a higher earning British worker for one on a 3 year rotation on a much lower salary.

End of the day, the big Indian outsourcers rent shared houses and coach load their workers around the country from low cost locations within the UK. They pay for flights only once per quarter and will write off all the costs against corp tax.

I would do the same, I am not angry at the Indian outsourcers doing this but the law is wrong and it's been going on for 20 years now with ups and downs.

[rootsnall]

factually correct there is a 'but' which is that if the salary paid is 20-30k lower (as an average) as the salary is an Indian one then it is an income tax and NI cut.

The cut is transfer of a loss from HMRC to a profit for Indian corp shareholders and shareholders of any corporation that swaps out a higher earning British worker for one on a 3 year rotation on a much lower salary.

End of the day, the big Indian outsourcers rent shared houses and coach load their workers around the country from low cost locations within the UK. They pay for flights only once per quarter and will write off all the costs against corp tax.

I would do the same, I am not angry at the Indian outsourcers doing this but the law is wrong and it's been going on for 20 years now with ups and downs.

I think you've written a pretty good summary of the situation there. I'm naively about to pen a letter to my MP having a moan about it and the NI changes. I wrote one many moons ago when Computer Weekly did a story about possibly opening up immigration for IT workers. I got a lengthy and detailed reply from Margaret Hodge ( the Minister in charge at the time ) saying it wouldn't happen and it restored my faith in democracy :-) . Roll on not that many years later and the flood gates had been opened. The result is exactly as I predicted in my original letter. Our beloved governments of all persuasions have actually created a skills shortage by removing any incentive for British companies to train it's own workers. I did a follow up letter a number of years later quoting the original and got a very short fob off reply. Rant over :-)

[Ketto]

Will be interesting to see what happens. I’m yet to be involved in a project with one of the big outsourcing companies which hasn’t been a total tulipshow.

[dsc]

[...]They are not particularly keen these days on completely hiving off projects to say Accenture/HP/Anyone else, preferring to recruit a PM and contractors but they will NOT pay big rates at all for anything. They are pressuring the rates down. Expect any contract to be well inside IR35 especially on SDC. Micromanagement is the word.[...]

If they have the power to push down wages / rates across the board (and I have a feeling they have, similar to IR35 changes and forcing inside contracts by the big players), then it might be a game over for anyone thinking of making good money in IT. If this carries on for long enough, people will just cave in and start doing the work for way less money cause those mortgages will not pay for themselves.

[courtg9000]

If they have the power to push down wages / rates across the board (and I have a feeling they have, similar to IR35 changes and forcing inside contracts by the big players), then it might be a game over for anyone thinking of making good money in IT. If this carries on for long enough, people will just cave in and start doing the work for way less money cause those mortgages will not pay for themselves.

Yes, I hate to say it and I will hate it when it actually happens, but in IT contracting I think we could see a race to the bottom. You know good guys say on £500+/day inside having to cut their rate by 1/3 or even 1/2 or more in order to work.

PE has power and its financed by debt and lots of it. These guys are very cost averse and profit centric. Look at who owns who! If I look at my previous IT contracting client list and the private companies 8 are now in the hands of private equity outfits. Some already were when I was there. Private equity is only really answerable to the banks involved in the deal financing and even then only really if they break covenant.

[DNMurphy]

Ah well, it's on with the needful doings, plenty quickness and much crapness, Bob's yer job.

And it'll all help a certain politico's mrs get richer, no doubt about it.

Colour me cynical. .

I presume you refer to Mrs Sunak? You do know Rishi is no longer PM? He had no part in this deal and his government resisted it for about three years because of the visa demands from India.

Its starmer who has surrendered to pretend he is a success, the success being bought at the cost of British jobs.

[DNMurphy]

I think you've written a pretty good summary of the situation there. I'm naively about to pen a letter to my MP having a moan about it and the NI changes. I wrote one many moons ago when Computer Weekly did a story about possibly opening up immigration for IT workers. I got a lengthy and detailed reply from Margaret Hodge ( the Minister in charge at the time ) saying it wouldn't happen and it restored my faith in democracy :-) . Roll on not that many years later and the flood gates had been opened. The result is exactly as I predicted in my original letter. Our beloved governments of all persuasions have actually created a skills shortage by removing any incentive for British companies to train it's own workers. I did a follow up letter a number of years later quoting the original and got a very short fob off reply. Rant over :-)

At least you tried. We have been shafted by all our gvernments.

[rootsnall]

At least you tried. We have been shafted by all our gvernments.

I think we have all in all. In the right skillset we were on bonkers money in the 90s and I'm sure that is why they opened the floodgates. But I think without doing that companies would have been forced to train their own staff, especially with some targeted support from the government ( eg. a scheme with no NI for 3 years dare I say it). I'm retired but have a vested interest in a kid studying Computer Science and I'm wondering if I have misguided them.

[Zigenare]

Go for roles that require some form of clearance "SC", "DV" etc, this prevents (at the moment) the Indian Body Shops from flooding the defence arena...