IR35 and overseas workers development

[pacontracting]

My client, like many others, has decided to stop using PSC contractors and therefore doesn't need to make a determination as to whether workers are inside or outside IR35. This may sound short sighted (and it is) however, their plan to get around this is to replace all the PSC contractors with Indian resources, bringing them over to the UK for specific periods at a time, on a work VISA.

These workers are employed in India by the usual big outsourcing companies, however, because of the IR35 rules, they've been pushing to get addiitonal resources in to 'plug the gap' and mitigate the risk to the UK company.

Does the government know that this is an unintended consequence of IR35? Essentially, they have off-payroll contingent workers, resident in the UK, without having to worry about IR35.

[jamesbrown]

Unintended?



They aren’t “off payroll” though. That’s the whole point. They are on payroll and full PAYE.

[ShandyDrinker]

Shocked... Shocked I tell you!

Seriously though I'm hardly surprised. Yes, taking back control is working out well.

[pacontracting]

Unintended?



They aren’t “off payroll” though. That’s the whole point. They are on payroll and full PAYE.

The Indian workers are not on the client company payroll and so are not an operating cost on the books. The client pays the Indian outsourcer a day rate for the workers and essentially treats them like employees. The workers are paid in rupees into an Indian bank account by their 'employer' - the large outsourcing company.

That used to be fine as the workers would be based in India / Romania etc - but now these workers are being shipped over to this country. Not sure how they are getting visa's to be honest.

[Anubis]

That used to be fine as the workers would be based in India / Romania etc - but now these workers are being shipped over to this country. Not sure how they are getting visa's to be honest.

Also seeing the same thing where I am. I can see with my own eyes that if the bean counters are believing they are getting a like-for-like replacement then they're in for a HUGE shock. As with anything in life, you get what you pay for...

Edit. I'm also hearing these large Indian firms are also negotiating staffing such as "oh, sure you can have Mr X to fill that role but in order to get Mr X you must also hire Mr Y and Mrs Z as well to do the other tasks you have advertised". So all this IR35 change is doing is starting to replace UK short-mid term contractors for imported cheap labor, which will no doubt also drastically lower rates.

Like I say, they're in for a shock if they believe they're getting a skilled workforce to complete projects on time. You can't magically conjure up 15, 20, 25 years experience from nowhere.

[pacontracting]

Also seeing the same thing where I am. I can see with my own eyes that if the bean counters are believing they are getting a like-for-like replacement then they're in for a HUGE shock. As with anything in life, you get what you pay for...

Edit. I'm also hearing these large Indian firms are also negotiating staffing such as "oh, sure you can have Mr X to fill that role but in order to get Mr X you must also hire Mr Y and Mrs Z as well to do the other tasks you have advertised". So all this IR35 change is doing is starting to replace UK short-mid term contractors for importing cheap labor, which will no doubt be an attempt to also drastically lower rates.

Like I say, they're in for a shock if they believe they're getting a skilled workforce to complete projects on time.

The irony is that the day rate the client is paying for these workers is slightly higher than that of a UK contractor, but the client likes it because it provides certainy from the costs involved in a HMRC investigation and a potential bill at the end of it for reasons the client can't control.

[Anubis]

The irony is that the day rate the client is paying for these workers is slightly higher than that of a UK contractor, but the client likes it because it provides certainy from the costs involved in a HMRC investigation and a potential bill at the end of it for reasons the client can't control.

If you started digging and ask the right people you'll realize like I have that they can do deals with large clients you or I cannot typically do.

Getting a particular individual with a certain skill set in from India often comes with strings attached. This is done on purpose so the client thinks twice trying to remove them knowing their new imported workforce now runs the show. When the client says "sorry, but these individuals are no good. 5 of them are so they can stay but the rest we want replacing..." it becomes yet more negotiating power for the Indian firm.

[SussexSeagull]

Here we go round the Mulberry Bush again. Companies tried this and generally speaking it didn't work out.

As for getting Visas, the current Conservative government are more pro-nationalism than pro-business. Long term they aren't the certainty they once were.

[JamesBrown11]

Can we fight offshoring somehow? Seeing how Indians are stealing our clients, ruining our livelihood whilst laughing at us among themselves makes my blood boil.

[eek]

Can we fight offshoring somehow? Seeing how Indians are stealing our clients, ruining our livelihood whilst laughing at us among themselves makes my blood boil.

No, because they will just fully offshore the work instead.