Reply to: Nobody wants to make that first move

[boxingbantz]

But you found my advice useful when you were struggling with notice periods. Me being the only one that posted an answer and all that?
https://www.contractoruk.com/forums/...-contract.html

Correct - so it shows that there is more to you than telling people to read stickies and/or do a google search. You're better than that.

[northernladuk]

I bet you have you tedious bore.

But you found my advice useful when you were struggling with notice periods. Me being the only one that posted an answer and all that?
https://www.contractoruk.com/forums/...-contract.html

[boxingbantz]

We'll know when it happens because there will be a deluge of 'what do I do now' posts on here.

Got my 'Read the sticky' saved to clipboard ready.

I bet you have you tedious bore.

[EvilGazebo]

That indemnity isn't worth the paper it's written on. The Agency has a legal liability and if they set up properly a legal responsibility to assess. HMRC will recover from them. They can then try to recover this loss from the contractor, there are a number of hurdles. The loss would have to be caused in some way by the contractor and not by the Agency. As the Agency is responsible for assessment and has presumably gotten this wrong it would be a stretch. Add to the mix the likelihood of the contractor still existing and having assets to enable payment plus the general inconvenience of legal action and any Agency relying on that is building their house on sand in my view.

100% agree. I did an "outside" public sector gig under the new rules where the agency included such a clause and wouldn't take it out. The general view (including the contract reviewer I used) was that it was completely unenforceable. Needs a test case but I was happy the risk was negligible.

Given that my LinkedIn is full of agencies starting to push these online status tools backed by insurance, I think they understand that trying to offload the responsibility downstream is a non-starter (because lawyers have told them so).

[ComplianceLady]

I suspect what the agencies will try to do is set up a subsidiary as a "consultancy", create contracts with their current end-clients as service contracts (so the agency/consultancy will claim they can make the IR35 determinations) and then indemnify themselves via their contract with contractors who will take the risk if HMRC does come calling in future.

That indemnity isn't worth the paper it's written on. The Agency has a legal liability and if they set up properly a legal responsibility to assess. HMRC will recover from them. They can then try to recover this loss from the contractor, there are a number of hurdles. The loss would have to be caused in some way by the contractor and not by the Agency. As the Agency is responsible for assessment and has presumably gotten this wrong it would be a stretch. Add to the mix the likelihood of the contractor still existing and having assets to enable payment plus the general inconvenience of legal action and any Agency relying on that is building their house on sand in my view.

[JohntheBike]

This guy imo is one of the, if not the most informed and intelligent posters here. 100% agree.

You only need 1 contract at a time. Either back your ability to get contracts or don’t for the next couple of years.

This guy imo is one of the, if not the most informed and intelligent posters here

you will always find someone who would not agree.

[BABABlackSheep]

I suspect that writing the obituary to contracting is premature.

Yes, some larger hirers will cease taking on contractors for a period. How long? I think a couple of years.

In that time the balance between getting people in to do the urgent, then the important, then the routine tasks will become known and they will see that the IR35 cases are going in a certain direction and/or they will change their working practices to suit a SOW approach.

In the meantime, contractors will either go to smaller outfits and/or umbrella and/or permie at least whilst the dust settles.

In a couple of years (from April 20), confidence will return and we will see a pick up in contracting numbers as both sides of the equation start to see benefits.

Agencies may try to convert to consultancies. Beware. That is a lot harder than changing a letterhead and I suspect HMRC is already lining them up.

We will see new ways to reduce the tax "burden". This is more difficult as often the lure of an additional few percent is such that you give in to temptation. Don't.

In 2 years we will see numbers pick up, but we will never be where we are now.

This guy imo is one of the, if not the most informed and intelligent posters here. 100% agree.

You only need 1 contract at a time. Either back your ability to get contracts or don’t for the next couple of years.

[Paralytic]

Before my contracting days, I worked for one of the largest consultancies in the UK and also a small niche one. Selling high value consulting work is tough and starting a consulting firm is even harder. What the recruitment agencies might offer isn't going to be able to compete with a proper consultancy operation.

I suspect what the agencies will try to do is set up a subsidiary as a "consultancy", create contracts with their current end-clients as service contracts (so the agency/consultancy will claim they can make the IR35 determinations) and then indemnify themselves via their contract with contractors who will take the risk if HMRC does come calling in future.

[edison]

I suspect that writing the obituary to contracting is premature.

Yes, some larger hirers will cease taking on contractors for a period. How long? I think a couple of years.

In that time the balance between getting people in to do the urgent, then the important, then the routine tasks will become known and they will see that the IR35 cases are going in a certain direction and/or they will change their working practices to suit a SOW approach.

In the meantime, contractors will either go to smaller outfits and/or umbrella and/or permie at least whilst the dust settles.

In a couple of years (from April 20), confidence will return and we will see a pick up in contracting numbers as both sides of the equation start to see benefits.

Agencies may try to convert to consultancies. Beware. That is a lot harder than changing a letterhead and I suspect HMRC is already lining them up.

We will see new ways to reduce the tax "burden". This is more difficult as often the lure of an additional few percent is such that you give in to temptation. Don't.

In 2 years we will see numbers pick up, but we will never be where we are now.

Agreed, I really can't see agencies being able to convert to true consultancies in any meaningful way. Managing a recruitment company and a consultancy are completely different service propositions.

Before my contracting days, I worked for one of the largest consultancies in the UK and also a small niche one. Selling high value consulting work is tough and starting a consulting firm is even harder. What the recruitment agencies might offer isn't going to be able to compete with a proper consultancy operation.

[Paralytic]

I'm not saying that we are indispensable but this will be a bonfire of budget cash just as the business-cycle moves into recession.

I really don't think it will be. I believe clients will simply focus on regulatory/must have projects with a reduced set of resources until the market sorts itself out.

[TwoWolves]

We all like to believe we are indispensable to companies, that things will fall apart without us there, but that rarely happens. Yes, things might take longer to deliver, it might cost clients more £££s as they make contingency plans, but I've seen many occasions where companies have contractor-culls or hiring freezes at critical moments in projects, and the world goes on.

There is often the hope for Schadenfreude at play.

I'm not saying that we are indispensable but this will be a bonfire of budget cash just as the business-cycle moves into recession.

[Paralytic]

I spoke to an IT Director I know yesterday who told me that he's aware of quite a number of large organisations that simply can't survive for very long without contractors as they've become so heavily reliant on them.

I could almost guarantee that every IT Director will tell you this, that others will have this problem, but never them. The guy across the road that they're pointing the finger at is pointing a finger their way.

Life will go on. I agree that it'll be bumpy for a year or two and then things will settle down. It will be a different market at that time though.

[edison]

I suspect that writing the obituary to contracting is premature.

Yes, some larger hirers will cease taking on contractors for a period. How long? I think a couple of years.

In that time the balance between getting people in to do the urgent, then the important, then the routine tasks will become known and they will see that the IR35 cases are going in a certain direction and/or they will change their working practices to suit a SOW approach.

In the meantime, contractors will either go to smaller outfits and/or umbrella and/or permie at least whilst the dust settles.

In a couple of years (from April 20), confidence will return and we will see a pick up in contracting numbers as both sides of the equation start to see benefits.

Agencies may try to convert to consultancies. Beware. That is a lot harder than changing a letterhead and I suspect HMRC is already lining them up.

We will see new ways to reduce the tax "burden". This is more difficult as often the lure of an additional few percent is such that you give in to temptation. Don't.

In 2 years we will see numbers pick up, but we will never be where we are now.

That's a good point you make about work that is urgent/important. Organisations will still need to find a way to do a lot of that in the short term. There's stuff to do for regulatory reasons, keeping the lights on etc which in many places is the bulk of IT work.

I spoke to an IT Director I know yesterday who told me that he's aware of quite a number of large organisations that simply can't survive for very long without contractors as they've become so heavily reliant on them.

I agree with you in a couple of years the dust will have settled but things will never be the same.

[webberg]

I suspect that writing the obituary to contracting is premature.

Yes, some larger hirers will cease taking on contractors for a period. How long? I think a couple of years.

In that time the balance between getting people in to do the urgent, then the important, then the routine tasks will become known and they will see that the IR35 cases are going in a certain direction and/or they will change their working practices to suit a SOW approach.

In the meantime, contractors will either go to smaller outfits and/or umbrella and/or permie at least whilst the dust settles.

In a couple of years (from April 20), confidence will return and we will see a pick up in contracting numbers as both sides of the equation start to see benefits.

Agencies may try to convert to consultancies. Beware. That is a lot harder than changing a letterhead and I suspect HMRC is already lining them up.

We will see new ways to reduce the tax "burden". This is more difficult as often the lure of an additional few percent is such that you give in to temptation. Don't.

In 2 years we will see numbers pick up, but we will never be where we are now.

[simes]

We all like to believe we are indispensable to companies, that things will fall apart without us there, but that rarely happens. Yes, things might take longer to deliver, it might cost clients more £££s as they make contingency plans, but I've seen many occasions where companies have contractor-culls or hiring freezes at critical moments in projects, and the world goes on.

There is often the hope for Schadenfreude at play.

Agreed.

And, if contracting really does totally die (worst case scenario), then so too do our worlds continue and, with our lives to pay for, we will have to go permie.

The market will inform us what we do next, not the other way around.