End of IT contracting this June?

[TheFaQQer]

I posted this in another thread but thought it's worth starting a new discussion. Times reported on May planning to end IT contracting in the form we know it. There still will be, but most likely all will be inside IR35.

The Times did no such thing. I suggest that you read what they actually wrote, based on what May had said, rather that Gerry McGlaughlin's "interesting" interpretation of what she said.

The Times article can be found here.

[LondonManc]

The Times did no such thing. I suggest that you read what they actually wrote, based on what May had said, rather that Gerry McGlaughlin's "interesting" interpretation of what she said.

The Times article can be found here.

A couple of interesting things from that.

The problem is particularly acute in the delivery and technology service sectors, but ministers fear that the practice is spreading to more conventional parts of the economy.

I don't see it as an acute problem as described in technology; it's more the state of play.

However, the article then goes on to talking about control of workers. This for me should lead to a set of two contracts arriving based heavily on control, if that's the key theme. Contingent workers - freelance, gig economy, etc. should be served either a worker contract or a supplier contract, whereby the worker contract is Inside IR35 and you get the associated rights or a Supplier contract because you've got a limited company and its associated risks and costs.

[MarkT]

I think that the public sector stuff is a red herring, no matter what happens, it'll be transferred across.

It goes well? - Great! They got Capita et al to staff the void with body shops of FTC types and all is grand.
Roll it out to the private sector

It doesn't go well? - Huge void created with people walking to the private sector? That's because it's not a level playing field.
Roll it out to the private sector

Wyrd bið ful aræd

[DotasScandal]

That's because it's not a level playing field.
Roll it out to the private sector

Exactly.
And don't forget the obligatory press release stressing how yet another "unfairness" has been fixed by the great moral crusaders at at HMRC.
Create problem - Provide solution - Profit!
Old as the hills.

[Craic]

Will the roll this out in hte private sector too?

Yes but is the article correct in what it says. If it is then not only public sector contractors are scuppered but private sector contractors will be too.

"The report is going to recommend much stricter rules governing what is self-employment."

"Perhaps they will allow contractors to continue contracting but through umbrella companies rather than PSCs."

This is what is happening in the publci sector now. Why wouldn't it happen in 12 months in the private sector too?

After all if the Government believe that a contractor earning £100,000 should pay the same tax and NI as a permie earning £100,000, why would they think this is fair that they pay the same tax in the public sector and not the private sector?

[cojak]

Yes but is the article correct in what it says. If it is then not only public sector contractors are scuppered but private sector contractors will be too.

"The report is going to recommend much stricter rules governing what is self-employment."

"Perhaps they will allow contractors to continue contracting but through umbrella companies rather than PSCs."

This is what is happening in the publci sector now. Why wouldn't it happen in 12 months in the private sector too?

After all if the Government believe that a contractor earning £100,000 should pay the same tax and NI as a permie earning £100,000, why would they think this is fair that they pay the same tax in the public sector and not the private sector?

Because the private sector is far more savvy, aggressive and has deeper pockets to challenge than the Public Sector?

[Fred Bloggs]

Because the private sector is far more savvy, aggressive and has deeper pockets to challenge than the Public Sector?

I wouldn't bank on that in every case in the private sector by any means. There is a significant and increasing trend for companies in the UK to win work and apart from project managing it in the UK, actually off shoring all the actual work. I am talking about oil and gas sector but it applies to a wide range of industries. In addition to that, another emerging trend that is sure to grow is that project hire roles are made on FTC rather than Ltd Co contractor basis. In my own office, right here there are four long term contracting guys engaged on FTC terms. They need to feed their families at the end of the day, you take what is going. In another office on the same project, there are considerably more too. I'm not saying the world as we know it will be changed overnight, but the direction of travel is clear I'm afraid.

[SueEllen]

Because the private sector is far more savvy, aggressive and has deeper pockets to challenge than the Public Sector?

^^^This

You forget the private sector isn't ruled by people who are afraid they won't get their promotion if they don't comply.

[adubya]

After all if the Government believe that a contractor earning £100,000 should pay the same tax and NI as a permie earning £100,000, why would they think this is fair that they pay the same tax in the public sector and not the private sector?

I guess "they" don't understand that a company would hire a contractor for an engagement and accept the £100,000 cost but wouldn't hire someone and pay them the same rate, it would be significantly lower to cover all the guff that goes with employing a permie.

[jamesbrown]

^^^This

You forget the private sector isn't ruled by people who are afraid they won't get their promotion if they don't comply.

It really depends how they proceed post Taylor. If the PS rules are extended to the private sector, I tend to agree (although there will still be a large number of companies whose approach to risk/compliance will dictate caution). If they opt for a statutory definition of self employment (which I support, in principle, and see as increasingly likely in practice), there won't be nearly the same scope for fudging/subjectivity.