HSBC bans its consultancies from supplying limited company contractors

[BrilloPad]

IR35 reform: HSBC bans its consultancies from supplying limited company contractors

These terms seem to explain why one tax adviser yesterday described the ban as “way beyond what is reasonable.”

But another contractor tax expert, James Poyser, went further saying the ban is nothing short of “chilling.”

Really?

HMRC have been seekling revenge for Arctic. Without ALL contractors and representative bodies standing together, HMRC will win. In fact, have already won.

The number of posts of "I am a real contractor, the rest are not" and "I only care now I am affected" should come as no surprise to those who understand contractors.

Anyway, my congratulations to HMRC. Though to be fair, contractors made it easy for you.

[Anubis]

"Now, the fear is that just as HSBC’s own PSC ban was copied by banks, telcos and pharmas, its ban on PSCs from its consultancies, which include Capgemini and Infosys, will be copied too."



Good luck finding all those skilled people who are about to leave. Even their suppliers use independent help from others to get the job done - not everyone will be willing to join a company on much worse pay terms and conditions.

I expect they think they're on to a winner forcing contractors into a corner. In reality anyone good will just leave and they will be left with huge gaps to fill.

[PTP]

Surely that's HSBC showing SDC over their consultancies. And pretty much the equivalent of controlling whether a contractor can use a substitute.

[LetterBox]

"Now, the fear is that just as HSBC’s own PSC ban was copied by banks, telcos and pharmas, its ban on PSCs from its consultancies, which include Capgemini and Infosys, will be copied too."



Good luck finding all those skilled people who are about to leave. Even their suppliers use independent help from others to get the job done - not everyone will be willing to join a company on much worse pay terms and conditions.

I expect they think they're on to a winner forcing contractors into a corner. In reality anyone good will just leave and they will be left with huge gaps to fill.

Good guys leave the suppliers, remaining average joes go perm or umbrella, work is not to standard, supplier ups the rates for umbrella / perm to get better people, costs passed on to HSBC. HSBC suck up the additional costs.

Or am i missing something?

[Anubis]

Remember it's not just IT or office types that are getting shafted.

Construction workers and their industry are also heavily hit

What. a. mess. HMRC.

[Anubis]

Good guys leave the suppliers, remaining average joes go perm or umbrella, work is not to standard, supplier ups the rates for umbrella / perm to get better people, costs passed on to HSBC. HSBC suck up the additional costs.

Or am i missing something?

Yes...the old saying "what goes around comes around".

If people could be paid 20-30% less for the same job and experience then they would be already. The big firms will think they've had their moment but the market will gradually correct itself as people know their worth.

All it takes is the competing company to be willing to pay more for a certain skill set and people forced to go umbrella or perm will think "sod this" and will leave. It's only a matter of time until things start going wrong, stuff doesn't get done, projects get pushed back, etc until a few end clients start increasing rates to attract the people they need to beat the competition.

HSBC move will backfire.

[BrilloPad]

Good luck finding all those skilled people who are about to leave.

It will be easy. Offshoring.

[Anubis]

It will be easy. Offshoring.

"skilled people". Not cheap as chips robots. People who can think for themselves and specialize in something

[LetterBox]

Yes...the old saying "what goes around comes around".

If people could be paid 20-30% less for the same job and experience then they would be already. The big firms will think they've had their moment but the market will gradually correct itself as people know their worth.

All it takes is the competing company to be willing to pay more for a certain skill set and people forced to go umbrella or perm will think "sod this" and will leave. It's only a matter of time until things start going wrong, stuff doesn't get done, projects get pushed back, etc until a few end clients start increasing rates to attract the people they need to beat the competition.

HSBC move will backfire.

No, HSBC will have got an increased known cost instead of taking on an unknown cost risk. Those increased costs may or may not affect the bottom line at HSBC, but the risk is avoided, that's all the bank is concerned with.

[Anubis]

No...bla bla bla.

In your opinion. In my opinion it's going to backfire somewhat. Some will accept and bend over for them; others will walk straight away. Those that bent over will soon be looking elsewhere to go.

Companies are simply a group of people offering a product or service. If a large wedge of talent goes to your competitor then you could say that's not a great business decision - it's short sighted.

People don't like being rewarded 20-30% less for the same effort, experience and skills on offer when nothing has changed. The good people who will be in demand know this and will leave to those happy to pay them for their efforts - it'll take time but it will happen eventually (same thing happened in the public sector).

Risk averse...sure I agree with you