Gerry M on VAT & IR35

[Amanensia]

It is true that financial institutions don't charge VAT to their customers and so any VAT charged to them is a cost that they won't have to bear if they cease to engage contingent workers through intermediaries.

Why not? The intermediary will charge VAT.

[malvolio]

Never heard of him. Seems like that's just as well.

Been around for years. Has never posted anything of value, but is very good at generating clickbait. All my opinion, of course, others may disagree.

[mudskipper]

Why not? The intermediary will charge VAT.

Patrick did say "if not engaged through intermediaries"

But the chances of banks putting contractors on their own payroll is very small - they will still come via umbrellas and/or agencies, who will charge VAT.

In short, the article appears to be the usual quality reporting we expect from that particular outlet.

[Amanensia]

Patrick did say "if not engaged through intermediaries"

Ah yes, missed that, apologies Patrick.

[Lance]

The article also fails on the major point that if the banks behaviour is driven by VAT then they would have ditched PSCs years ago. So it clearly isn't just about VAT.


My twopennorth.......
Contract resources are a commodity item in market that is almost perfect (perfect market is an ecomony phrase). In that market nobody pays more than they need to.
The incoming legislation may well (probably) have an impact on the supply side of that market, and it's reasonable to assume that the demand side is unchanged.

The result is a price drop, as piss-taking permietractors all become staff. But that price drop is likely only for the permitractor roles. The highly skilled and rare talent supply side of the market is likely to be unchanged (as long as they refuse to be 'permied').

After 6/12 months market forces will fix the pricing imbalance. I speculate that it will increase the rates of the permi-tractors, and subsequently the rare skilled rates will also increase. This could well be a win-win, as long as you can ride the storm.

CAVEAT: my crystal ball has failed before....

[eek]

Patrick did say "if not engaged through intermediaries"

But the chances of banks putting contractors on their own payroll is very small - they will still come via umbrellas and/or agencies, who will charge VAT.

In short, the article appears to be the usual quality reporting we expect from that particular outlet.

Yes Banks are far more concerned with potential pay claims under equal opportunity legislation than they will be over the cost of VAT to agencies.

[Patrick@Intouch]

Ah yes, missed that, apologies Patrick.

Haha, no worries

[swamp]

The article makes no sense. Banks will still pay (unrecoverable) VAT to the umbrella company.

[LondonManc]

The biggest thing that I think will happen under the new IR35 shake up is that companies will no longer hold on to a contractor past two years. If you're inside IR35, it would be much more likely that you can then behave like a permie and also claim redundancy, etc. after being at the client for over two years - the retrospective tax grab for an outside IR35 contractor makes the whole two-year thing irrelevant (the two year thing being permie rights rules here, rather than anything to do with accounting expenses or IR35). It's quite a sinister side-effect of this tbh.

[DaveB]

The article also fails on the major point that if the banks behaviour is driven by VAT then they would have ditched PSCs years ago. So it clearly isn't just about VAT.


My twopennorth.......
Contract resources are a commodity item in market that is almost perfect (perfect market is an ecomony phrase). In that market nobody pays more than they need to.
The incoming legislation may well (probably) have an impact on the supply side of that market, and it's reasonable to assume that the demand side is unchanged.

The result is a price drop, as piss-taking permietractors all become staff. But that price drop is likely only for the permitractor roles. The highly skilled and rare talent supply side of the market is likely to be unchanged (as long as they refuse to be 'permied').

After 6/12 months market forces will fix the pricing imbalance. I speculate that it will increase the rates of the permi-tractors, and subsequently the rare skilled rates will also increase. This could well be a win-win, as long as you can ride the storm.

CAVEAT: my crystal ball has failed before....

This has already happened in the Public Sector. Rates are going up or roles are being declared outside. Gigs that would have paid £400-500 a day 2 years ago are now being listed at £600-700+ for inside and IR35 status is being explicitly stated in the job specs listed under the Digital Outcomes and Specialists framework.