Reply to: Reform UK abolishing IR35

[SussexSeagull]

It's a bit more nuanced, but broadly speaking I'm saying that clients, or at least their Human Remains experts (oxymoron alert) are tending to only want to hire people as employees (regardless of vehicle) rather than as short term providers of specific expertise. They've stopped thinking of temporary project delivery teams, and are putting that back to the bigger consultancies - not just the Big4 but also platform specialists. Hence the need for the individual contractor expert has all but faded away. Just nobody has told the recruitment business yet...

Irritating in a big way, since that flexible, comparatively cheap and highly professional resource is exactly what companies need to weather the Starmer/Reeves storm.

But as long as HMT guides the Chancellor's decisions and as long as HMT can't think past the 19th century model of work, it's not going to change.

I think you are right about work going to the big consultancies, although not so much with smaller businesses as they can't always exercise the economy of scale, and that is the main driver of the lack of contract opportunities. The fact that the ones that do still appear are increasingly inside IR35 is very much the fault of the changes to IR35 implementation.

That said some have worked out it is a way of getting round the increase in Employer NI contributions for getting in entry level people.

None of this is new under the current Labour government.

[malvolio]

I do see your point and don't disagree if you're referring to only "taking on contractors as we understand them" which I presume you mean outside IR35. I had presumed that SS was referring to a slump in roles in general across "contractor" types which can circumnavigate the complexity\impact by doing what the banks do, maybe your reference to "agency-style umbrella" refers to that.

It's a bit more nuanced, but broadly speaking I'm saying that clients, or at least their Human Remains experts (oxymoron alert) are tending to only want to hire people as employees (regardless of vehicle) rather than as short term providers of specific expertise. They've stopped thinking of temporary project delivery teams, and are putting that back to the bigger consultancies - not just the Big4 but also platform specialists. Hence the need for the individual contractor expert has all but faded away. Just nobody has told the recruitment business yet...

Irritating in a big way, since that flexible, comparatively cheap and highly professional resource is exactly what companies need to weather the Starmer/Reeves storm.

But as long as HMT guides the Chancellor's decisions and as long as HMT can't think past the 19th century model of work, it's not going to change.

[gables]

Originally posted by SussexSeagull View Post
Massive pain though it is, I am not convinced IR35 reform (small r) has caused the slump in demand as it doesn't seem much better in the permanent sector and similar is happening in the US.

Well I disagree. Companies have been scared by the highly complex rules and potentially expensive impact of getting it wrong, so will only consider recruiting employees of their own or of other, established companies. Nobody is taking on contractors as we understand them in an awful lot of cases. Perm, FTE or agency-style umbrella are the options. What you accept will depend on how much you want employee protections

That said you still see adverts for manpower replacement roles stating Outside IR35...

I do see your point and don't disagree if you're referring to only "taking on contractors as we understand them" which I presume you mean outside IR35. I had presumed that SS was referring to a slump in roles in general across "contractor" types which can circumnavigate the complexity\impact by doing what the banks do, maybe your reference to "agency-style umbrella" refers to that.

[fatJock]

They could be handing out golden pigs for all it matters - there's no chance they'll get in to govern.

[SussexSeagull]

Might be an unpopular opinion in these parts but at the turn of the century contractors paying themselves enough to cover NI contributions and paying the rest in dividends was never sustainable, especially as some of them did it for years on end and didn't have to differentiate themselves from permanent employees.

Which isn't to say it hasn't gone too far now and not being able to claim expenses when inside has killed contractors as a mobile workforce.

[northernladuk]

Therefore the UK needs to do something but the UK is going in the wrong direction on tax policy. IR35 needs a wrecking ball abolition.

Problem is IR35 does actually do something, it's just too wide and has missed the mark for our particular situation. We want to be out of it but the distinction between a buinsess and perm is still needed in some cases so I don't think it will ever be 'abolished', just fixed. Everytime it's 'fixed' it gets worse so I'm not holding out any hope. Hopefully I'll be pleasantly surprised but until then it's head down and keep going.

[NotAllThere]

https://assets.nationbuilder.com/ref...pdf?1696527070

"Abolish the burdensome IR35 rules introduced by the Conservatives in recent years."

"Abolish the burdensome Apprenticeship Levy, which ironically reduced apprentice numbers."

Will this still be there plans when Farage is no longer the glorious leader? Assuming Elon Skum gets his way?

https://www.bbc.com/news/articles/cr4ry5vyk5xo

[Bluenose]

Maybe highly skilled workers are moving to places where they can travel and work in multiple countries.
Alternatively, we can blame "everyone else apart from Reform/Tories/BNP/EDL".

I dont have a view on the politics but the tax rate for locals in portugal and spain exceeds the UK and so they are doing special visas to address that.

Therefore I dont think 'travel into multiple countries' factors too highly at all in where you base youself versus eyebleeding rates of deductions.

Portugals top income tax rate is 48% (thats after social security!) and a far whack of EU/UK/USA IT contractors looking to live in Portugal would fall into that fairly easily if, Portugal had not have taken action on both income tax and SS for IT workers.

Therefore the UK needs to do something but the UK is going in the wrong direction on tax policy. IR35 needs a wrecking ball abolition.

[malvolio]

Yep, I think similar, why would IR35 put companies off using contractors when they can do what the banks do and just not work with PSCs i.e. not even declaring inside or outside if doing SDSs etc is seen as a hassle. It may put off (some) contractors applying for the roles but I reckon there'll be enough supply to fill demand.

Well I disagree. Companies have been scared by the highly complex rules and potentially expensive impact of getting it wrong, so will only consider recruiting employees of their own or of other, established companies. Nobody is taking on contractors as we understand them in an awful lot of cases. Perm, FTE or agency-style umbrella are the options. What you accept will depend on how much you want employee protections

That said you still see adverts for manpower replacement roles stating Outside IR35...

[gables]

Massive pain though it is, I am not convinced IR35 reform (small r) has caused the slump in demand as it doesn't seem much better in the permanent sector and similar is happening in the US.

Yep, I think similar, why would IR35 put companies off using contractors when they can do what the banks do and just not work with PSCs i.e. not even declaring inside or outside if doing SDSs etc is seen as a hassle. It may put off (some) contractors applying for the roles but I reckon there'll be enough supply to fill demand.

[SussexSeagull]

Massive pain though it is, I am not convinced IR35 reform (small r) has caused the slump in demand as it doesn't seem much better in the permanent sector and similar is happening in the US.

[WTFH]

The UK has to do something to compete, Portugal and Spain are too attractive now for highly skilled workers.

Maybe highly skilled workers are moving to places where they can travel and work in multiple countries.
Alternatively, we can blame "everyone else apart from Reform/Tories/BNP/EDL".

[Bluenose]

These ideas are completely insane - it's almost like they don't want any tax revenue so what are they planning to cut.

It depends on perspective.

If you cut tax revenue in the right areas it will encourage consumption and positively effect GDP.

The UK has to do something to compete, Portugal and Spain are too attractive now for highly skilled workers.

It's ironic that whatever the UK government charge you for EErNICs in the IR35 drama you can offset against your Portuguese/Spanish income tax bills.

[SussexSeagull]

Reform’s problem is they are always going to be toxic to a lot of voters and that gives them a ceiling. Plus when an election comes round they are actually going to have to produce policies for the general public to evaluate, not just that the loose coalition of libertarians, nationalists and conspiracy theorists that make up their membership.

Labour discovered under Corbyn that you can’t just take what your membership priorities and expect the wider electorate to play along.

[Paddy]

https://assets.nationbuilder.com/ref...pdf?1696527070

"Abolish the burdensome IR35 rules introduced by the Conservatives in recent years."

"Abolish the burdensome Apprenticeship Levy, which ironically reduced apprentice numbers."

Forum members were cheering on the Tories who promised the same in 2003 if they won the election. Again the deluded twats fall for sound bites.