MPs vote down bid to delay IR35 reforms, press ahead with new tax rules

[elsergiovolador]

Which means selling software directly and consultancy on a packaged product basis.

As things are going with HMRC, the taxman may still say that this is an elaborate scheme to avoid tax.

[unixman]

Extremely disappointed with yesterday's vote, but with strong gov majority the result was to be expected.

Future looks increasingly grim. 90% of roles will be inside IR35 eventually, with no rate increase to offset new tax. Few remaining outside gigs will be getting 10x as many applications, making them impossible to get. Also the rates for those outside gigs will go down (by a lot) due to significantly increased supply. Everyone will be wanting them.

With remote work being new normal, we have also lost one of our key advantages, mobility. Now we have to compete with people from all over the world. Near- and off-shoring is now even more attractive to clients. Why would they pick an expensive UK contractor who works remotely over someone from East Europe or Asia (India) who also works remotely, but quotes 3-5x less? This will also increase supply significantly and drive rates way down.

I was watching yesterday's vote with 5 of my contractor colleagues. One already decided to leave UK permanently in 2021. Two of them will start consultancies in cheap countries like India and try to steal UK gigs by low-balling. Other two guys think of getting ER, closing shop and going PAYE in 2021. No one really believes that rates will increase, if anything, as I said above, rates will go down, way down.

Personally, despite all this, I will keep pushing through. Contracting is a lifestyle and I just can't see myself doing perm 9-5 job with some psychopathic micromanager breathing down my neck, with maybe £200 worth of benefits a year, limited time off and office politics BS. I have already reduced living costs to an absolute minimum in preparation for things to come. I'm also actively looking into moving PSC to another country. Really short-sighted decision by UK gov but it is what it is.

What are your plans for 2021?

Much too pessimistic. A free market continues to operate, and it will find a way to give people what they want. Clients want freelancers, badly. Contractors want to provide the service. HMRC wants tax. A balance point will be found to satisfy all three.

Regarding WFH, I was benched in March. After lockdown was announced I started applying UK wide, and got a well paid contract. Lockdown actually helped me find work. WFH means a company can hire the best contractor for the job, not the one willing to travel and have no life. Your skills become more important and your travelling ability less.

And you aren't competing wordwide, through offshoring remains a threat as it always has been.

[LondonManc]

Why would they open themselves to liability for incorrect status determination? If you read HMRC guidance almost every role one way or another qualifies inside IR35. I think there will be a boom for advisers ensuring the contracts are inside IR35 and cannot be disputed.

You cannot provide a substitute and your hours of work are 9 - 5. If you don't want it, someone else will.

Dispute over.

[elsergiovolador]

You cannot provide a substitute and your hours of work are 9 - 5. If you don't want it, someone else will.

Dispute over.

And if nobody wants it, then they will moan to Chancellor that there is shortage of IT skills and kindly ask him to have a word with his father in law...

[Invisiblehand]

MPs vote down bid to delay IR35 reforms, press ahead with new tax rules

So much for Dave Chaplin “knocking it out of the ballpark.”

Still I imagine he made a few quid out of it.

[ShandyDrinker]

So much for Dave Chaplin “knocking it out of the ballpark.”

Still I imagine he made a few quid out of it.

Credit should go to Dave Chaplin for being one of the few to be vocally championing the contracting sector. The IPSE approach over recent years of going from the more shouty PCG to the schmoozing IPSE also showed that the softly softly approach didn't work either.

Ultimately the failure of his campaign was all about numbers. 4000 noisy constituents/supporters was never going to carry sufficient weight. You need Extinction Rebellion or BLM size demonstrations and lobbying to have an impact.

I think credit should be given where it is due to both Chaplin and IPSE for trying, even if the misguided "knocking it our of the ballpark" never happened.

As for Chaplin making a few quid, check out the company accounts on Companies House and judge for yourself. Fair play to him though as he's a grafter and I won't begrudge whatever he's made.

[elsergiovolador]

Credit should go to Dave Chaplin for being one of the few to be vocally championing the contracting sector. The IPSE approach over recent years of going from the more shouty PCG to the schmoozing IPSE also showed that the softly softly approach didn't work either.

Ultimately the failure of his campaign was all about numbers. 4000 noisy constituents/supporters was never going to carry sufficient weight. You need Extinction Rebellion or BLM size demonstrations and lobbying to have an impact.

I think credit should be given where it is due to both Chaplin and IPSE for trying, even if the misguided "knocking it our of the ballpark" never happened.

As for Chaplin making a few quid, check out the company accounts on Companies House and judge for yourself. Fair play to him though as he's a grafter and I won't begrudge whatever he's made.

Many contractors I know are happy with the reform, because in their opinion it will clear the market out of permietractors and it will not affect truly self employed. They are in for a surprise...

Government has created an atmosphere of hatred towards contractors, painting them as the baddies engaged in tax avoidance who don't pay their "fair share". Given that, not many would like to be exposed to any threats that could come from the public or risk their image or reputation in any way.

In the eye of average worker contractors are scroungers and they got what they deserved. I must say that propaganda created around the issue by the government and methodical misleading information from the Treasury was top notch.

I heard even an MP said that contractors pay 7.5% of tax and that is not right. We will now be paying over 50%...

I've seen an outrage on Twitter about such statement, however nobody has lodged a complaint in HoC...

[eek]

Credit should go to Dave Chaplin for being one of the few to be vocally championing the contracting sector. The IPSE approach over recent years of going from the more shouty PCG to the schmoozing IPSE also showed that the softly softly approach didn't work either.

Ultimately the failure of his campaign was all about numbers. 4000 noisy constituents/supporters was never going to carry sufficient weight. You need Extinction Rebellion or BLM size demonstrations and lobbying to have an impact.

I think credit should be given where it is due to both Chaplin and IPSE for trying, even if the misguided "knocking it our of the ballpark" never happened.

As for Chaplin making a few quid, check out the company accounts on Companies House and judge for yourself. Fair play to him though as he's a grafter and I won't begrudge whatever he's made.

IPSE did sod all - I don't see any of their former supporters celebrating the work they did "fighting" these changes - in fact it's the exact opposite.

[malvolio]

IPSE did sod all - I don't see any of their former supporters celebrating the work they did "fighting" these changes - in fact it's the exact opposite.

Diffidult to fight when the other side is simply ignoring not only your arguments but also all the evidence from all directions...

Rather than pointless bitching about who lost what, the next step is to focus on persuading the clients that outside IR35 is still a good option for them. The market will eventually resolve that issue, just like it has already done for the public sector. Meanwhile, hard times beckon: finding any work seems to be the real problem right now, rather than how much you earn from it. And with all the redundancies that are starting to happen, hiring contractors faces yet another serious barrier: if you've made someone redundant, that role no longer exists.

[eek]

Diffidult to fight when the other side is simply ignoring not only your arguments but also all the evidence from all directions...

Rather than pointless bitching about who lost what, the next step is to focus on persuading the clients that outside IR35 is still a good option for them. The market will eventually resolve that issue, just like it has already done for the public sector. Meanwhile, hard times beckon: finding any work seems to be the real problem right now, rather than how much you earn from it. And with all the redundancies that are starting to happen, hiring contractors faces yet another serious barrier: if you've made someone redundant, that role no longer exists.

Well I don't think I'm bitching over who lost what, the war was lost before the first IR35 battle was fought - it was obvious by the end result in the expenses battle.

And as you would discover if you looked closely (schools are a great example) - you can easily get round any redundancy restrictions, you just give the job a different title, slightly change the job specification (but not the job itself) and the deputy head job that paid £50k is now an assistant head job paying £42-45k