Reply to: "20% of UK businesses would rather axe their contractors than deal with IR35"

[Lance]

There are. And once one or two big players in a given sector make this jump, the rest will have to follow or accept they're not going to get any of the first (or even second) rate contractors out there.

I don't mean to downplay the problems right now, which are real enough. But in some sectors at least I fully expect we will transition to a "new normal" over the next couple of years, with clients seeking to ensure that, at least for skillsets that are genuinely hard to come by, contract terms and working conditions will clearly place people outside IR35. The first few to do so will get a huge competitive advantage, and then everyone else will have to follow.

Unfortunately, people with fairly generic skillsets may well get left behind. If the commercial imperatives aren't there, things are less likely to change.

these are the bum on seat contractors that large companies have in large numbers.
I think you're right. It will settle into a 'new normal'. Just need a decent warchest to cover till then (or have contracts that are going to stay outside).

[Amanensia]

You'd think / hope that there would be businesses out there taking a practical and pragmatic view.

There are. And once one or two big players in a given sector make this jump, the rest will have to follow or accept they're not going to get any of the first (or even second) rate contractors out there.

I don't mean to downplay the problems right now, which are real enough. But in some sectors at least I fully expect we will transition to a "new normal" over the next couple of years, with clients seeking to ensure that, at least for skillsets that are genuinely hard to come by, contract terms and working conditions will clearly place people outside IR35. The first few to do so will get a huge competitive advantage, and then everyone else will have to follow.

Unfortunately, people with fairly generic skillsets may well get left behind. If the commercial imperatives aren't there, things are less likely to change.

[Paralytic]

If I ran a large private sector company I would see this as great news, if all my competitors are unable or unwilling to make use of a contractors I would make sure I had the contracts and conditions setup so I could use them outside IR35. Contractors tend to be an order of magnitude more productive than permies for just a slightly higher short term cost.

People who run large private sector companies don't worry about such details - this is taken care of by people much further down the corporate food chain, people who follow the crowd, people who don't want to be the one that risks their job in doing something different that results in potential HMRC tax demands a year or so down the line. People who live in the real world.

[ladymuck]

If I ran a large private sector company I would see this as great news, if all my competitors are unable or unwilling to make use of a contractors I would make sure I had the contracts and conditions setup so I could use them outside IR35. Contractors tend to be an order of magnitude more productive than permies for just a slightly higher short term cost.

You'd think / hope that there would be businesses out there taking a practical and pragmatic view.

It's been discussed to death but it's really not difficult to identify the type of resource you need and then engage properly. It's just a bit more time consuming and requires attention to detail. Sadly those are the two things many businesses seem unable or unwilling to invest.

[Unix]

I think HMRC would make it their priority to then take you out of business.

What's their record in court again

[TwoWolves]

If I ran a large private sector company I would see this as great news, if all my competitors are unable or unwilling to make use of a contractors I would make sure I had the contracts and conditions setup so I could use them outside IR35. Contractors tend to be an order of magnitude more productive than permies for just a slightly higher short term cost.

I think HMRC would make it their priority to then take you out of business.

[Unix]

If I ran a large private sector company I would see this as great news, if all my competitors are unable or unwilling to make use of a contractors I would make sure I had the contracts and conditions setup so I could use them outside IR35. Contractors tend to be an order of magnitude more productive than permies for just a slightly higher short term cost.

[simes]

More guesswork then?????

You need payment milestones linked to work packages. You need a contract change procedure and a formal way of issuing delay notices.
You’ll also need to be direct as an agency isn’t going to touch it with a barge pole.

It’s interesting that you say ‘suppliers and clients have the same’. The implication there is that you know you’re not a supplier just another bum on a seat.

Deary me, you really are all over me right now aren't you. Havin' fun?

I think it is fair to say that until clients are newly educated in manners that are Not just reliant on the HMRC 'flood' of information, much less their track record of court case wins (sarcasm/joke), much of what happens from 2020, and the discussing of such in late 2019, will be guesswork. I am just positing, not foreseeing.

I know what one needs in such a SoW contract. But the use of such a contract is dependent on clients even allowing there to Be such a thing. And with waves of clients saying they will cease using contractors, discussing the merits of a SoW contract right now seems a bit redundant. But, please continue, if only to continue FTFEveryone.

As to the last sentence, I was not referring to me. I was actually referring to sitting in on meetings between Nortel and C&W back in early 2001 and listening to how Nortel convinced C&W of their right to payment even though SDH rings had not yet been fully delivered.

Anyway, keep popping up for more. Am happy to dance.

[SussexSeagull]

Not sure this is anything new as a lot of companies don't like taking on contractors. Then they go and do it anyway.

[TwoWolves]

Our rates would have to lift x3 to fit all that nonsense.

That's why systems houses charge out gradies at £800 /day, which is why comps preferred contractors. Now it's back to the bad old days. Reload those '80s.

[Lance]

The problem is that the 'suppliers' you're talking about tend to be, Oracle, IBM, CGI etc who have armies of legal, BA, accountants who can apply pressure, contractual terms. It's almost impossible for a one man band.

FTFY

It can be done, but in general the people who can do the actual work are as commercially savvy as a 15-year old Corbynista.
3/4 people is the minimum really to get a spread of skills so the client can be managed effectively.

[b0redom]

The problem is that the 'suppliers' you're talking about tend to be, Oracle, IBM, CGI etc who have armies of legal, BA, accountants who can apply pressure, contractual terms. It's much harder for a one man band.

[Lance]

I have actually asked the self same question, and in the process got myself called a 'non-proper contractor' or some such.

https://www.contractoruk.com/forums/...hmrc-ir35.html

[B]I think [\B]then you will have to have clauses in the SoW that clearly delineate whose fault is the cause of the delay, and if accepted by the client, one can move on.

Suppliers and Clients have the same things in place when it comes to stage payments. Supplier has done their bit, the solution is not delivered due to Client, Supplier still gets paid.

But, it won't be the contractor stipulating even the use of one, much less the content of one...

More guesswork then?????

You need payment milestones linked to work packages. You need a contract change procedure and a formal way of issuing delay notices.
You’ll also need to be direct as an agency isn’t going to touch it with a barge pole.

It’s interesting that you say ‘suppliers and clients have the same’. The implication there is that you know you’re not a supplier just another bum on a seat.

[simes]

Genuine question. If we're engaged on a SoW basis rather than T+M, and the end client buggers around so the job takes a lot longer than projected, what happens? Let's say I an contracted to spin up a few environments in the cloud using Terraform and ansible. I'm all ready to go, but the client wants to connect via their private corporate connection rather than the Internet, and their internal networks team hold it up for 2-4 weeks.

Presumably I don't get extra, even if the cause of the delay is with the client?

I have actually asked the self same question, and in the process got myself called a 'non-proper contractor' or some such.

https://www.contractoruk.com/forums/...hmrc-ir35.html

I think then you will have to have clauses in the SoW that clearly delineate whose fault is the cause of the delay, and if accepted by the client, one can move on.

Suppliers and Clients have the same things in place when it comes to stage payments. Supplier has done their bit, the solution is not delivered due to Client, Supplier still gets paid.

But, it won't be the contractor stipulating even the use of one, much less the content of one...

[Paralytic]

Genuine question. If we're engaged on a SoW basis rather than T+M, and the end client buggers around so the job takes a lot longer than projected, what happens? Let's say I an contracted to spin up a few environments in the cloud using Terraform and ansible. I'm all ready to go, but the client wants to connect via their private corporate connection rather than the Internet, and their internal networks team hold it up for 2-4 weeks.

Presumably I don't get extra, even if the cause of the delay is with the client?

If you want to protect yourself, this is the kind of scenarios you'd need to make sure your contract covered. This is very difficult to do thoroughly.

And even if the contract covers it (eg, you write in a clause that states that delays due to the client cause a penalty clause equal to the time-cost of the delay), invoking that clause (and proving it) can be very difficult and can cause strain in the client relationship. That's if you can get a client to sign up to it in the first place, as the people you're contracting with will often, themselves, be dependent on others parts of the same organisation.

Which is why people like T&C contracts.