RBS, contractors and IR35

[jamesbrown]

mmm, not sure about that. Some, like me, could be in a very strong position to expose the issues that the April 2020 roll out will create. But yes, there is the stress factor to be considered. It will take time for the issues to settle, but I guess I'll not be around to discuss the implications.

There may or may not be some meaningful read across from tax law to employment law in future. I personally doubt it, even though there's a clear read across the other way around in terms of employment case law. Employment and tax statutes are in completely different places. I think I'm more in agreement with webberg on that. Either way, the average person really doesn't want that type of fight.

[northernladuk]

Some, like me, could be in a very strong position to expose the issues that the April 2020 roll out will create..

How so?

[TheInvoicer]

Anyone that stays with the same client and accepts a change in status post rollout is absolutely nuts, even with a watertight change in WP (just not worth the stress).

I think staying with the same client post rollout no matter the status change or not is nuts. Everyone should be leaving their client in March. The risk and stress is not worth it.



Sent from my iPhone using Tapatalk

[BR14]

How so?

by boring them sh1tless? perhaps?

[SussexSeagull]

Right. However, one important difference with the PS rollout is that there won’t be anywhere else for BoS contractors to go, so I doubt there will be the same upward pressure on compensation. What can those contractors do? I come back to them not being in a position of power. It will change the balance towards permiedom for some though. If only those crappy ex-contractors opt for FTCs, then market forces will change the balance again, perhaps, but there will still be a large net loss of contracts, I think.

I suspect some will calculate that there is no, or very little financial advantage, to continuing being a contractor inside IR35 and seek a permanent job but I can't imagine anyone doing a FTC unless they absolutely have to as it is more or less the worse of both worlds (unless they are seriously well paid).

Market forces work both ways and kaleidoscope could very well be about to be shaken where the talent pool available for highly skilled resource they can bring in and get rid of may very well get smaller.

[JohntheBike]

by boring them sh1tless? perhaps?

perhaps so!

[JohntheBike]

How so?

At the moment, there are too many personal variables, e.g. my age and how long does the client want me for, for me to determine a cohesive approach. But it is my nature that if someone pokes me so to speak, I will retaliate. I'm contracted to my client through an offshore software house and have already had to advise that software house of the requirements of UK law and they were forced to back down over one issue, granted with pressure from the end client. The first thing to consider is that I've been contracted to my current client for almost 15 years and that should give you a clue of a possible scenario.

We have debated here many issues surrounding what may happen after April 2020, and every opinion could be valid. Clients could just dismiss all their contractors, which seems to be the approach taken by the banks, others could require contractors to work through an umbrella, which is the way I believe Susan Winchester was required to work, even more will blanket assess all their contractors as inside, and risk employment benefit claims, others will be conscientious and make a true assessment of the status of their contractors and assess them as outside, with the risk of a challenge from HMRC. Others might offer permie status or a fixed term contract, so there is a multitude of options for clients. The risk as I see it, is with those clients who are ill informed and do little or nothing until April 2020 and then have a knee jerk reaction.

There is an outside chance that the changes will be postponed again, which would mean that I wouldn't be affected and all this debate will be irrelevant to me as I'll be retired. So, there's no point in saying "what if" at the moment.

[webberg]

There is very much a personal component to all of this and there will no "one size fits all" suit that everybody can wear.

There are also a number of common elements that can be found in many situations and these will be pointers as to what risk each person may be looking at historically and moving into the new regime.

For example, I am today speaking with a client who is being asked to shift a contract to a "new venture" of his existing and long term end client, which he is assured is not "connected" for the purposes of measuring company size for corporate law purposes and is "small" and which therefore will allow him to determine his own IR35 status post April next year.

My first point to him will be "who takes the risk that the new venture is actually "small" and will not be seen as and extension of a large business"?

Think I can guess the answer there.

[WordIsBond]

My first point to him will be "who takes the risk that the new venture is actually "small" and will not be seen as and extension of a large business"?

Think I can guess the answer there.

It will be the engager. They may try to foist it off on him in the contract but ultimately, HMRC won't care. They'll be going to the engager and saying you should have made the determination.

There's risk for him, if they put in the contract that he has to indemnify them. And there's obviously historical risk if it's a long term client that HMRC won't just stop with one year. He could mitigate the historical risk by closing his company and opening a new one, though that would be painful if he's got significant reserves, because he obviously couldn't use ER in that case.

[webberg]

It will be the engager. They may try to foist it off on him in the contract but ultimately, HMRC won't care. They'll be going to the engager and saying you should have made the determination.

There's risk for him, if they put in the contract that he has to indemnify them. And there's obviously historical risk if it's a long term client that HMRC won't just stop with one year. He could mitigate the historical risk by closing his company and opening a new one, though that would be painful if he's got significant reserves, because he obviously couldn't use ER in that case.

I'm sure that the above structures and many more are possible but the point of the post was more to demonstrate that end clients (we really need to have a lexicon of terms and names because I think this is what you refer to as "engager") who are perhaps at the margins of thresholds, are already preparing to frustrate the purpose of the law.

My concern for the client is that he is desperate to keep the job and has a good relationship with the end client and is indicating that he his willing to absorb some risk in return. He perhaps does not appreciate the level of that risk (until our call later).

I also have a concern that the new project will have perhaps 4 or 5 contractors, supported by the same number of "clerical" staff who are presently full time employees of the end client. If the end client really has spun off a unit that is independent for whatever threshold they think is right, then the risk multiplies because of the numbers.

It again comes down to that crucial relationship between contractor and end client and how that is leveraged.