Reply to: State of the Market

[hungry_hog]

If anyone here is in FS, Citi is hiring extensively. I get about 2 emails a week from agents for them. Even when it's not mentioned you can tell from the terminology who it is.

They are always hiring, make of that what you will

[willendure]

This is why it always makes me laugh when people here say that the gov needs to fix this or that for us to make more money / get jobs etc. As if we are the priority

Exactly - as a contractor I never complain because I know I had a good deal. I remember once working for a government department, and they screwed up their budget, so at xmas time they told all the contractors unexpectedly to take a full 3 weeks off. This happened on the day before we were winding up for xmas, no notice or anything. And they all whined about it apart from me. I was thinking, great 3 weeks off for me to do all the tulip I need to do, and I've got a job to come back to in January, so bonus!

What I wanted to say is, there is a problem in the UK and it extends to most western countries. That is that the boomers are retiring, shrinking the productivity of the economy, and going from high earners to tight fisted pensioners overnight; that significantly changes how they view their capital. You can see how this played out in Japan already and from that derive a picture of how this will be and is affecting the UK. In many ways it didn't really matter which party we elected at the last election because they all face this issue. Since demographics is "baked in" and cannot be changed, there are no easy solutions. A major difference with Japan is that they don't have immigration like we do. Hence they have found remaining politically unified easier as a population with a more singular ethnicity. The difficulty the UK has is that immigration is a possible solution to demographics through filling in desirable age ranges by recruiting from abroad, but that also increases political division.

So tough choices indeed, and contractors are not a priority. But also we've been hit in the past by tax changes, how much is left to squeeze out of us, or are their more ambitious targets that mean we get overlooked?

Rumours of 45% on all dividends sound a little paranoid.

[SussexSeagull]

This is why it always makes me laugh when people here say that the gov needs to fix this or that for us to make more money / get jobs etc. As if we are the priority

I think contractors current challenges are only a symptom of a wider problem. I know it is unscientific but looking on LinkedIn I am not sure the permanent market is much better and IT recruitment is a blood bath at the moment.

[dsc]

[...]but high-earning contractors will be squarely caught up in it and, honestly, it will be very hard, perhaps impossible, for them to not screw it up.

This is why it always makes me laugh when people here say that the gov needs to fix this or that for us to make more money / get jobs etc. As if we are the priority

[SussexSeagull]

Was talking to my friend, a small business owner. He was saying that prior to COVID he struggled to find staff but now he has people literally knocking on his door asking for work.

Also told me that the freshies have to also pay some sort of 10-year-visa-plan, which is around £2k per year.

No wonder the govmt love immigration. It literally is cash cow for not offering much more than what is here. Supported by the current infrastructure.

Not so good when you have to start paying people benefits because they can't find work.

[Bluenose]

Currently sat on my roof terrace in Southern Spain, contemplating whether i could move here full time. Any tax rise on dividends, no matter how significant, would probably tip the balance. Digital Nomad Visa for me and my US client. 24% flat rate tax. Bye bye broken Britain.

It's actually lower than 24% as you can offset the UK NICs as a cost, it can go as low as 12%.

[SchumiStars]

Was talking to my friend, a small business owner. He was saying that prior to COVID he struggled to find staff but now he has people literally knocking on his door asking for work.

Also told me that the freshies have to also pay some sort of 10-year-visa-plan, which is around £2k per year.

No wonder the govmt love immigration. It literally is cash cow for not offering much more than what is here. Supported by the current infrastructure.

[jamesbrown]

The further problem is contractors aren't really the intended target for employment status reform so will be low down the list of people who consideration will be given to.

Absolutely, it's the low-skilled/low-earning workers that should really be unionised employees who are the target of these reforms - platform workers, for example - but high-earning contractors will be squarely caught up in it and, honestly, it will be very hard, perhaps impossible, for them to not screw it up.

[SussexSeagull]

Sure, it mitigates, but HMRC won't be happy until there is parity or worse, in their view and, since the benefits of "flexibility" afforded by contractors to the wider economy are hard to quantify (but, no doubt, real), ministers - particularly Labour ministers - will tend to listen to HMRC w/r to the "tax gap" and focus on that.

Sorting out employment status is very, very hard - which is why it hasn't been done - and there will most likely be some severe downstream consequences. For example, if they go with strict deeming criteria, like other jurisdictions, you will get most of the downsides w/r to loss of flexibility, while the expected extra tax may be lower than expected if it becomes easier to game the criteria. One of the problems with employment status is that you cannot really address it independently of tax, but they are nevertheless distinct bodies of legislation, presently.

The further problem is contractors aren't really the intended target for employment status reform so will be low down the list of people who consideration will be given to.

[escapeUK]

It's not the growth that concerns me, it's the levels of taxation, immigration, criminality, lack of opportunity, social destruction, oh and dividend tax! It's everything really. Not the country I grew up in. This century has proved to be a disaster!

I have anything from now until maybe 25 years left on this planet before I end up in it. What I don't have time for is another decade plus of austerity to 'fix the NHS' (and the rest).

Truer words were never spoken. From first world to third world since just 2000.

[oliverson]

take that other whiner eUK with you, please? - i doubt you'll be missed.

No problem. Enjoy paying your taxes!

[sadkingbilly]

Currently sat on my roof terrace in Southern Spain, contemplating whether i could move here full time. Any tax rise on dividends, no matter how significant, would probably tip the balance. Digital Nomad Visa for me and my US client. 24% flat rate tax. Bye bye broken Britain.

take that other whiner eUK with you, please? - i doubt you'll be missed.

[jamesbrown]

I said it reduces the upside of being outside of IR35, not eliminate it entirely. For one thing expenses would still very much remain an advantage of being outside.

I am sympathetic to any attempt to sort out worker status as frankly it is a dog's dinner at the moment. Back in the day we were essentially paid more money to buy us out of things like paid holidays and sick pay (although decent sick pay seems to be disappearing in permanent employment as well) but since Inside IR35 came into vogue in more and more places we don't get any upside for a decreasing financial premium.

More broadly the cost of Social Care for an ageing population has been ignored for about 30 years, with the exception of Theresa May and it cost her a majority, so I really don't see an alternative to higher tax take over the upcoming years.

Sure, it mitigates, but HMRC won't be happy until there is parity or worse, in their view and, since the benefits of "flexibility" afforded by contractors to the wider economy are hard to quantify (but, no doubt, real), ministers - particularly Labour ministers - will tend to listen to HMRC w/r to the "tax gap" and focus on that.

Sorting out employment status is very, very hard - which is why it hasn't been done - and there will most likely be some severe downstream consequences. For example, if they go with strict deeming criteria, like other jurisdictions, you will get most of the downsides w/r to loss of flexibility, while the expected extra tax may be lower than expected if it becomes easier to game the criteria. One of the problems with employment status is that you cannot really address it independently of tax, but they are nevertheless distinct bodies of legislation, presently.

[oliverson]

Since 2010 the UK economy has grown more than Germany, France, Italy and Japan but less than the US and Canada. Do what is right for you but the west does have long term problems with the likes of China and India wanting more and more of the pie.

It's not the growth that concerns me, it's the levels of taxation, immigration, criminality, lack of opportunity, social destruction, oh and dividend tax! It's everything really. Not the country I grew up in. This century has proved to be a disaster!

I have anything from now until maybe 25 years left on this planet before I end up in it. What I don't have time for is another decade plus of austerity to 'fix the NHS' (and the rest).

[SussexSeagull]

Currently sat on my roof terrace in Southern Spain, contemplating whether i could move here full time. Any tax rise on dividends, no matter how significant, would probably tip the balance. Digital Nomad Visa for me and my US client. 24% flat rate tax. Bye bye broken Britain.

Since 2010 the UK economy has grown more than Germany, France, Italy and Japan but less than the US and Canada. Do what is right for you but the west does have long term problems with the likes of China and India wanting more and more of the pie.