End of IT contracting this June?

[AtW]

No. Cutting CT is a bid to bring more business into the UK and so push up overall tax revenues. Our rates are not really part of that equation.

Yes, they want to bring in more business, however the cuts in CT are projected to "cost" a lot of revenue - increasing sharply over next few years, so to offset that the Govt is adding all sort of new costs: say take "Apprentice Levy" which is just 0.5% , imagine how much more they can claw back by making companies pay Employer NICs on all self-employed engagements? Plus they get a chunk extra from new employees with IR35

[b r]

No. Cutting CT is a bid to bring more business into the UK and so push up overall tax revenues.

Don't confuse paid rates with advertised rates.

[malvolio]

Don't confuse paid rates with advertised rates.

I haven't for the last 20 years or so, but thanks for the advice. Still not sure how it's relevant though...

[Craic]

IPSE are demanding that the Government, via the Matthew Taylor report’s definition of self employment should be based around the following:-

Having autonomy in their work. For freelancers this means the ability to send substitutes and for there to be no requirement to do work outside what is agreed
Having control over working arrangements. Self-employed people are able to decide how to complete their tasks and the hours and location they choose to work in
Taking on business risk. Self-employed take responsibility for their finance and tax responsibilities and can be paid on a per task basis
Level of independence from clients. This would include things such as having to wear a uniform or using your own tools and equipment to complete your work.

[Craic]

Surely what IPSE are demanding would make most IT Contractors who work on IT projects as developers etc. squarely caught by IR35. This would include many of their members who are currently using personal service companies.

[TheFaQQer]

Surely what IPSE are demanding would make most IT Contractors who work on IT projects as developers etc. squarely caught by IR35. This would include many of their members who are currently using personal service companies.

How so?

Do you have freedom over the work that you do (ie are you subject to supervision, direction and control)? Do you have a right of substitution that allows you to provide a suitable replacement without the client being able to reject without a valid reason? Are you independent from your client, or are you part and parcel of their organisation?

If you fail the three pillars of employment then you fail the IR35 tests and are inside; if you do not fail all three pillars then you cannot be an employee so are outside IR35.

I have no idea how many contractors are inside IR35, outside IR35 or inside IR35 pretending to be outside and hoping not to get investigated. The government is looking to close the gap between self employed and employed and left to their own devices will come up with a definition that suits Treasury as much as possible. If nobody is out there saying "this is what you should consider when determining whether someone is self employed or not" then sure as eggs is eggs we'll end up with a definition which doesn't suit the majority of people who work like us.

There are people who are clearly self employed, and there are people who are clearly employees. And there is a grey area in between the two extremes of black and white. Government would like to define as many people as possible as being in the black (for taxation purposes) whereas the genuine self employed want to see as many people that work like "me" (a genuinely self employed freelance contractor) in the white as possible. Those who are forced into being self employed so that their employer can avoid paying tax and national insurance would fail the test of self employment (giving the individual and the government a win that they want) whilst those of us who freelance out of choice can argue "I am a contractor" clearly, articulately and persuasively whilst still allowing government to claim a win because they are increasing revenues from those who are disguised employees and employers who use their workforce this way.

[SueEllen]

I thought I would post this here as this thread mentions them.

Apparently Deliveroo has created terminology to prove their workers aren't self-employed linky

In a six-page document seen by the Guardian, Deliveroo says its couriers, who deliver takeaways, should always be referred to as “independent suppliers” – self-employed workers with few employment rights – rather than as employees, workers, staff or team members.

[Fred Bloggs]

Mercilessly edited by FB to say -

I have no idea how many contractors are inside IR35, outside IR35 or inside IR35 pretending to be outside and hoping not to get investigated.

IIRC, HMRC and HMG reckon it is close to 90% who should be IR35 caught. I have worked mainly on major engineering projects for most of my contracting career and I reckon they are not far wrong to be frank. With the vast majority pretending to be "real businesses". I know a very small minority of contractors who for sure are operating businesses as the man in the street would recognise it, but most are just a convenient sham.

[SueEllen]

IIRC, HMRC and HMG reckon it is close to 90% who should be IR35 caught. I have worked mainly on major engineering projects for most of my contracting career and I reckon they are not far wrong to be frank. With the vast majority pretending to be "real businesses". I know a very small minority of contractors who for sure are operating businesses as the man in the street would recognise it, but most are just a convenient sham.

Every contractor works alongside a small subsection of other contractors amongst the total number of a contractors there are, regardless of how many clients they work with.

That means some contractors end working alongside 90% of other contractors who should be caught while others work where far less people should be caught.

As HMRC doesn't know what happens in other government departments let alone in private enterprises, I would take their estimates with a massive pinch of salt.

What I do know is that in the public sector contracts I worked on, if you wanted D&C then you would be removed very quickly.

[Fred Bloggs]

Every contractor works alongside a small subsection of other contractors amongst the total number of a contractors there are, regardless of how many clients they work with.

That means some contractors end working alongside 90% of other contractors who should be caught while others work where far less people should be caught.

As HMRC doesn't know what happens in other government departments let alone in private enterprises, I would take their estimates with a massive pinch of salt.

What I do know is that in the public sector contracts I worked on, if you wanted D&C then you would be removed very quickly.

And........ our mileages will vary as appropriate. Being extremely fortunate in having a skill set that is now almost impossible to acquire (took me 40 years) yet is still in demand (the demand pool has shrunk far less than the experience pool) I just get left alone. I'm engaged as a subject matter expert and that's all there is to it. I'm not saying I'm any different in all other respects to every other guy who spends between 6 months and 2 to 3 years on a project before moving on (all private sector, all blue chip clients). Yet, just like you say from your experience about D&C, I can say quite categorically that on big engineering projects if you aren't part and parcel of the team and behave in exactly that way, you are out through the door. Most large projects are manned almost entirely by contractors from project director down to clerks. Sometimes, a non team member type will be sacked at a couple of hours notice, sometimes at a weeks notice depending on the available replacements. On more than one occasion, I have been that replacement. My solution to being a SME but looking like an integral part of the team? Make sure everything is done well and before 99.9% of the time anyone even realises anything is to be done. That way, I am part of the team but never given any instruction on what to do or how to do it. Does that make sense?