HSBC bans its consultancies from supplying limited company contractors

[ladymuck]

How does it work in say solicitors partnerships where they buy in to a certain value and share out the profits while having to retain a certain percentage? I think that's how it works, from my watching of suits! (That literally is my level of knowledge on the topic)

[jamesbrown]

So I bring in £75,000 and you bring in £100,000 how does that work out - and how does the company handle the following year when I bring in £125,000 and you earn £25,000.

It doesn’t really work unless you are looking at EIB or growth share type schemes and they really don’t work in this type of scenario.

In year one, it sounds like you get 20k dividends and 55k salary and he gets 20k dividends and 80k salary then, in year two, you get 20k dividends and 105k salary and he gets 20k dividends and 5k salary. In other words, the differences are accommodated in salary and/or bonus through PAYE.

IMHO, it's all a load of nonsense though. Anyone who tries something along these lines needs their heads examined, even if it's theoretically possible.

[WordIsBond]

FWIW, client sounded out some of their contractors and had few takers so that idea is dead. Unlike JB, I'd have been willing to do it, they'd have made it worth my while.

They're in a bind. They don't want the risk of declaring everyone outside but their project is going to die. They are trying to find ways to mitigate the hit to contractors, they say they are prepared to accept the cost of ERNI, but they'd have to uplift by 30% and even then, some of their guys are going to leave because of the risk on the historical contracts.

[simes]

How does it work in say solicitors partnerships where they buy in to a certain value and share out the profits while having to retain a certain percentage? I think that's how it works, from my watching of suits! (That literally is my level of knowledge on the topic)

I cannot answer the question but securing all of My legal knowledge from this very same program, I could only wonder how Donna, a legal PA, could yank out of her purse a cheque for $1,000,000 to buy her way in when this was on the cards.

[LondonManc]

FWIW, client sounded out some of their contractors and had few takers so that idea is dead. Unlike JB, I'd have been willing to do it, they'd have made it worth my while.

They're in a bind. They don't want the risk of declaring everyone outside but their project is going to die. They are trying to find ways to mitigate the hit to contractors, they say they are prepared to accept the cost of ERNI, but they'd have to uplift by 30% and even then, some of their guys are going to leave because of the risk on the historical contracts.

How about everyone inside but all contractors get a £100/day expenses allowance to cover each day on site? The consultancy will still be making a decent margin on you (or up their rates to HSBC because they've made good contractors harder to find).

[WordIsBond]

How about everyone inside but all contractors get a £100/day expenses allowance to cover each day on site? The consultancy will still be making a decent margin on you (or up their rates to HSBC because they've made good contractors harder to find).

I'm not involved in the project, actually. The client approached me because they know I've already got several people working for me and have done projects before them, so they could use me as a consultancy for this purpose.

The project has run for 20 months so far. Most of the contractors have said under no circumstances will they stay without an outside determination because of the historical risk. By April, they're risking 22 months of outside work being dragged inside just because of the client's risk aversion.

If you thought you were at risk of IR35 taxes for 22 months, would you take a 6-9 month uplift of £100 / day as compensating you for that? I wouldn't.

[ladymuck]

DB are giving those that go onto PAYE (not umbrella, it seems) 45 week contracts

If you don't like that offer, the door is the other option.

[BR14]

and this has what connection to HSBC?

[ladymuck]

and this has what connection to HSBC?

Absolutely none. Was too lazy to start a new thread

[NeedTheSunshine]

Absolutely none. Was too lazy to start a new thread

They are also offering proper perm positions to some (DB).