Reply to: IR35 and day rate

[jamesbrown]

Well in April 2017 my PS client thought that and all the contractors left leaving them right up the creek.

They weren't happy but had to hike rates by 35%.

OK. Maybe easier with PS money to do this but I'd argue that private companies are going to have no choice either.

Nonsense, because they won’t be competing with another, much larger, sector where more lenient rules apply. The same incentives will apply everywhere, which will be to create more FTCs for BoS roles and for a dramatic cut in rates in those PS roles that saw an uplift. What are you going to threaten? To go permie?

[psychocandy]

Not when they can get offshore resources to come onshore for under current contractor rates now

But you in the public sector will still soon have major competition as the cream from the private sector look to move over and replace to maintain there rates


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Always been the case since Day 1 though for contracting...

[psychocandy]

Was that the message from your line manager in your tenth annual performance review as first tier support monkey?

Yeh right ok mate. Never done 1st line support in my life....

Who am I to spoil your fun? ;-)

[jamesbrown]

What a load of tosh.....

Was that the message from your line manager in your tenth annual performance review as first tier support monkey?

[GhostofTarbera]

IR35 and day rate

Well in April 2017 my PS client thought that and all the contractors left leaving them right up the creek.

They weren't happy but had to hike rates by 35%.

OK. Maybe easier with PS money to do this but I'd argue that private companies are going to have no choice either.

Not when they can get offshore resources to come onshore for under current contractor rates now

But you in the public sector will still soon have major competition as the cream from the private sector look to move over and replace to maintain there rates


Sent from my iPhone using Contractor UK Forum

[psychocandy]

Depends if inside public sector, where its taxpayers money’s and people can get 35% if private sector the answer will be ZERO as client will be able to pick and choose people by the dozen willing to work inside IR35 for same rate, unless you are in that magical 1% that they can’t find the skill for


Sent from my iPhone using Contractor UK Forum

Well in April 2017 my PS client thought that and all the contractors left leaving them right up the creek.

They weren't happy but had to hike rates by 35%.

OK. Maybe easier with PS money to do this but I'd argue that private companies are going to have no choice either.

[psychocandy]

No amount

Wouldn't take one, on principle, because I don't want to deal with the crap that disguised employees deal with (and I also wouldn't take one that was nominally inside but with working practices that contradicted that, again on principle).

But, to answer your question directly, probably 30-35%.

What a load of tosh.....

[psychocandy]

Depends on the location. If I have significant travel expenses that can no longer go through the company, I suspect that the rate increase would need to be 50%+ which means that I wouldn't even waste time looking at the role.

Agreed. Because you can't claim expenses if they are significant it makes more of a difference.

[psychocandy]

Around 25 to 30%

Nah I reckon 35% at least.

[simes]

You can still be outside IR35, the law itself hasn't changed. However you will have to have the balls to challenge your "employer's" decision on your status, probably at an ET where you will be claiming holiday and pension rights á la Susan Winchester or your IR35 status at the commissioners. If enough people start that process the clients will soon look for a better solution.

What we ought to be doing is teaching clients that the 2020 changes do not mean they have to put everyone inside IR35 out of fear of the taxman, but recruit their contractors on a proper B2B basis so there is no place for IR35 to apply. If they do realise that the world will keep on turning.

It's that education that is missing. The agencies are holding seminars left, right and centre - and, naturally enough, selling the wrong answer to protect their own business model.

Oh indeed, I do completely agree with all of the above.

I have tried with my agency ref Private Sector IR35 next year, and there is nothing going on and seemingly no one to speak to about it, much less educate.

Mine is just a supposing of what the reality might, in all likelihood, be.

[GhostofTarbera]

Depends if inside public sector, where its taxpayers money’s and people can get 35% if private sector the answer will be ZERO as client will be able to pick and choose people by the dozen willing to work inside IR35 for same rate, unless you are in that magical 1% that they can’t find the skill for


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[SussexSeagull]

If being in IR35 becomes the new norm in the private sector it will kill contracting being a mobile resource, especially at the lower end of the rate scale.

[malvolio]

At some point after the Private Sector reforms, the market will undoubtedly even out between the current Public and Private sectors and the current aim for Private will thus dissipate.

If then the ability, as yet unknown, for contractors to remain outside IR35 is not strong, I would hazard a guess the day rates will revert to what they are now, and possibly contractors will just have to suck it up.

Reason for saying this is, no matter ones experience as a contractor, there will always be a newer, younger bod willing to take up the mantle.

You can still be outside IR35, the law itself hasn't changed. However you will have to have the balls to challenge your "employer's" decision on your status, probably at an ET where you will be claiming holiday and pension rights á la Susan Winchester or your IR35 status at the commissioners. If enough people start that process the clients will soon look for a better solution.

What we ought to be doing is teaching clients that the 2020 changes do not mean they have to put everyone inside IR35 out of fear of the taxman, but recruit their contractors on a proper B2B basis so there is no place for IR35 to apply. If they do realise that the world will keep on turning.

It's that education that is missing. The agencies are holding seminars left, right and centre - and, naturally enough, selling the wrong answer to protect their own business model.

[simes]

At some point after the Private Sector reforms, the market will undoubtedly even out between the current Public and Private sectors and the current aim for Private will thus dissipate.

If then the ability, as yet unknown, for contractors to remain outside IR35 is not strong, I would hazard a guess the day rates will revert to what they are now, and possibly contractors will just have to suck it up.

Reason for saying this is, no matter ones experience as a contractor, there will always be a newer, younger bod willing to take up the mantle.

[jamesbrown]

Hope you enjoy all that time on the bench after next April.

Bench sounds great