What do you think will happen to agencies next April?

[LondonManc]

nluk, what is it like to be the best, of the best, of the best?

with honours!!!!

[eek]

There are many people like that, a guy here use a IoM scheme that returns him about 92%, the things is a majority of people will get away with it, so the rest will try

Can you be security cleared when bankrupt....

[SimonMac]

Can you be security cleared when bankrupt....

Yes you can

[eek]

Yes you can

Least he'll keep working then...

[SimonMac]

Least he'll keep working then...

He will need to to pay his tax bill

[SueEllen]

Just a small point, but contractors can and do work outside of IT.

It's not a small point but most people on this board are IT contractors.

I do know and have met contractors in other industries plus there are a few on this board.

Unfortunately if these people don't answer the consultation and indicate like IT and engineering bods that there is a skills shortage in their industry, than HMRC aren't going to listen.

[Andy Hallett]

This is my view own view and does not necessarily reflect the views of SThree

The HMRC have been on a march over the last few years to increase their tax take on the flexible labour market. There has been frustration from the revenue that contractors, effectively doing permie type roles, have had the advantage of paying lower percentages of tax through exotic schemes, T&S and dividend strategies.

If you look at what they have done, it resembles a plan!

Offshore Intermediaries > Onshore Intermediaries > Data Collection > Level T&S > Level Divs > Enforce IR35 > Possibly next step is to introduce direct deductions from clients agencies / introduce chain law

I am not sure that the intended target are the sort of folk who frequent this board if I am honest. The rump of their take will be in the truly 'disguised employee' type folk who are Limited Company teachers, order packers and postman - we will all just get caught up in the crossfire. I think whatever form these changes take it will see a fragmentation of the flexible labour market with the lower paid contractors moving in to Temporary or Fixed Term PAYE structures.

So where does that leave the traditional contractors? I think you will be ok but everyone will have to adapt. In a lot of senses contractors haven't helped themselves in recent years, claiming to be outside of IR35 and then seeking protection under the Employment Agency Regulations looks like a paradox too far in terms of demonstrating independence, and whilst currently all legally correct, has served to stir the beast. Going forward I think that we will move to a much more project based world (think back to when IR35 first came in) and less time and materials security.

Definitions are incredibly important as well, fundamentally what is the difference between a large recruitment company providing sub-contract services or a large consultancy. I suspect we have a bigger number in this category than the majority, yet they will be exempted from the plans.

In my role as Commercial Director for the group I see lots of different models across the globe, and in all countries there is a vehicle for legitimate freelancers to work and receive a premium for their enhanced skills and flexibility. In answer to the original question agencies (and contractors) will all have to adapt, but that's evolution...

[LisaContractorUmbrella]

This is my view own view and does not necessarily reflect the views of SThree

The HMRC have been on a march over the last few years to increase their tax take on the flexible labour market. There has been frustration from the revenue that contractors, effectively doing permie type roles, have had the advantage of paying lower percentages of tax through exotic schemes, T&S and dividend strategies.

If you look at what they have done, it resembles a plan!

Offshore Intermediaries > Onshore Intermediaries > Data Collection > Level T&S > Level Divs > Enforce IR35 > Possibly next step is to introduce direct deductions from clients agencies / introduce chain law

I am not sure that the intended target are the sort of folk who frequent this board if I am honest. The rump of their take will be in the truly 'disguised employee' type folk who are Limited Company teachers, order packers and postman - we will all just get caught up in the crossfire. I think whatever form these changes take it will see a fragmentation of the flexible labour market with the lower paid contractors moving in to Temporary or Fixed Term PAYE structures.

So where does that leave the traditional contractors? I think you will be ok but everyone will have to adapt. In a lot of senses contractors haven't helped themselves in recent years, claiming to be outside of IR35 and then seeking protection under the Employment Agency Regulations looks like a paradox too far in terms of demonstrating independence, and whilst currently all legally correct, has served to stir the beast. Going forward I think that we will move to a much more project based world (think back to when IR35 first came in) and less time and materials security.

Definitions are incredibly important as well, fundamentally what is the difference between a large recruitment company providing sub-contract services or a large consultancy. I suspect we have a bigger number in this category than the majority, yet they will be exempted from the plans.

In my role as Commercial Director for the group I see lots of different models across the globe, and in all countries there is a vehicle for legitimate freelancers to work and receive a premium for their enhanced skills and flexibility. In answer to the original question agencies (and contractors) will all have to adapt, but that's evolution...

Because a recruitment company's business, however large they may be, is 'substantially in the supply of Labour' - that's the qualifier that HMRC are using in the consultation document.

So, Andy, do you think that your clients will be happy to provide a written statement that a contractor in a particular role will, at no point during the duration of that role, be subject to the right of supervision or direction or control and that they relinquish the right to exercise any one of the three? Be interested to get an agency (albeit not endorsed by SThree) opinion

[Andy Hallett]

Because a recruitment company's business, however large they may be, is 'substantially in the supply of Labour' - that's the qualifier that HMRC are using in the consultation document.

You are assuming that the agency model will stay under that definition.

So, Andy, do you think that your clients will be happy to provide a written statement that a contractor in a particular role will, at no point during the duration of that role, be subject to the right of supervision or direction or control and that they relinquish the right to exercise any one of the three? Be interested to get an agency (albeit not endorsed by SThree) opinion

If you assume you first point then clients will have a choice, adapt or pay more. In my experience they will adapt. It is a symbiotic relationship between Client, Agency and Contractor.

[psychocandy]

1. Competition will decrease (that's pretty sure as less contractors will be willing to travel / some will go permie instead of taking tax hit)
2. rates may increase due to above, and general shortage of skilled IT
3. Agencies wont change ..

Either way , good times coming

Disagree.

What I think will happen will be:-

1) Rates will not change. Clients already think its expensive so won't care about the reasons for paying more.

2) There will be less candidates for contractors in remote areas because it won't be worth it to stay over for a lot of people. Those of us in these remote areas will be happy.

2) Clients will then whinge that they can't get anyone. Nothing will change.

3) Agents will carry on regardless - possibly having to work a bit harder to find local candidates.

In a way, won't affect me as much as others. I never take gigs that I can't commute to daily. So, even though there's some affect its not as bad as others who stay over.