From 1 January 20202
Barclays are clearly planning ahead.
UK bank Barclays is to call time on all off-payroll working and shift its entire contractor base to the Pay As You Earn (PAYE) system to swerve potential financial implications of private-sector IR35 legislation. Currently, the British tax collector requires freelancers that work like other full-time employees to self-assess …
That's what I've been saying to every IR35-complainer for years.
If it hurts you, up your prices. The companies aren't going to take your costs on for you if the tax office says they got it wrong, so it's all the same to them.
But if you're under IR35, that should only apply when you're working for a single employer much like a full-time employee would anyway. So... that's *exactly* what the tax office want, and what IR35 is basically designed to do: stop you being employed while pretending to be self-employed.
You are either an outside contractor there to do a contract only, working on contracts for other places, and sorting our your own taxes, or you're an employee. Pick one. That's all IR35 is.
If you pick the first and it means you have to raise prices - do so. Because *so does everyone else*. If you pick the second, problem solved anyway and you could have done that years ago.
What salary (is it a salary if you're a contractor?) you negotiate is up to you.
And, if you price yourself out of the market such that it's cheaper for Barclays to hire someone like you on a PAYE basis... guess what?
As they view all income as taxable, this has the unfortunate impact that the costs of running the business will be double taxed - once to get the money into the company and one again to pay for all the other mandatory costs - such as the accountant fees, insurances, training, holiday cover etc.
So, to make this work, the effective cost is going to sky rocket for the company who engages the contractor. Then the permies will still argue that contractors are being paid more.
What a nice outcome for those who generally work more flexibly to support customers.
I'm wondering what will happen if people get forced to permanent roles and the companies still continue to use their normal HR processes, who will be those first out the door when the performance reviews are done in the current manner ???
It will be interesting to see how this all pans out as so many things are not thought through and there will be lots of unintended consequences for everyone.
@AC. You completely missed my point
If people are deemed as inside IR35, then they are taxed as if they were an employee - i.e. at the same rate as an employee, even though they have the overheads relating to the company as I explained previously. I am not describing when someone is directly employed.
The resulting cost to the customer will be most of the reason that some companies have said lowest cost is to have them as employees.
Personally, I don't expect many genuine contractors to go perm, there will just be a skills shortage.and actually leave the potential customer with a higher cost trying to deliver projects without the appropriately skilled people to help them.
Its such a short sighted view and a reaction to a policy that doesn't reflect how companies want to obtain and use skilled resources for specific tasks when they don't have those skills (or enough of those skills) internally.
I wonder if anyone has done the maths on what it will cost the business for all those extra reviews, the HR cost of having to lay people off when no longer needed, etc. The more you think about it, the more you realise how broken it is.
The company will not enter into it whatever its overheads. Under PAYE it is the individual who is employed. The fact they also own a company who provide services is irrelevant. There is no contract with the company if the individual is on PAYE. The pay that person receives does not enter the account of their company unless the person decides to invest that money in their company. An individual and the company they own are separate entities. This is the whole fucking reason IR35 exists, because contractors seem incapable of understanding this simple point.
You're both arguing two different circumstances.
AC is arguing from Barclay's position, where they have made all IR35 type jobs PAYE jobs.
Dwarf is arguing from the position of a contractor who's client deems them to be outside of IR35 but HMRC does not.
You're both right, but you're talking about two different things.
If you read the statement from Barclays, they are clear that they will not engage with intermediaries (i.e. agencies), personal service companies (i.e. your Ltd), or any other method *other than* the individual themselves. That means that your Limited will not be the one paid. It will be *you*. Your PAYE will have been dealt with by Barclays. You will have the same bennies as the other permies. They're making contractors who work (almost?) exclusively for Barclays a non-event.
The only way you get around that is if you do *not* work for Barclays full-time/exclusively, and from what I understand, those kinds of contractors are *very* far and inbetween for the bank.
It just another job you have that have nothing to do with Barclays. Any income you derive from that job you will have to deal with yourself. Barclays won't be paying that company or have any interaction with that company. They will soley be dealing with you directly as a individual.
So, when I send my cleaners to clean their offices, are they no longer my employees when they clean? And as I send different cleaners depending on the week, does Barclays need to hire and fire accordingly? And do those employees have to 'invest' in my company some of their earnings to keep my business running?
You see, what people seem to forget is... its not just one-man-bands using service companies.
If your contract gives you the right to send whoever you want, then you aren't IR35.
There is an exception if one of your cleaners is considered to be a leading expert in the field of cleaning; then Barclays are allowed to ask specifically for them. Not really relevant for office cleaning, but if it was a museum, art gallery, or something like that, then it would be.
I will do everything in my power to avoid going permanent. I'm simply not interested.
I'm a techie for fuck sake. My DNA and mental wiring is completely at odds with being a permanent worker.
I like the permie vs contractor comparison to the free range hen vs caged hen comparison.
Techies are best when they're left to roam and do what techies do. They're fucking garbage when they've been subjected to environments that aren't natural.
A free range techie actively seeks out problems to solve and performs preventative maintenance because he wants an easy life and as little overhead as possible. A caged techie checks his ticket list and maintenance check sheet on a schedule to ensure his KPIs are on the level.
One of the above is what you want in your business, the other is a dancing monkey.
Cue incoming downvotes and permie rants in 3..2..1...
The only difference? Erm, what about paid holiday? Oh yeah - contractors don't get that. Sick pay? Yeah, contractors don't get that either. Company pension? Guess what - contractors don't get that either.
I know people think contractors pay a lot less tax than permanent staff, but that's not the case. Less, yes, but it's the price paid for having someone as a temporary measure. Remember, a contractor is literally here today gone tomorrow - no employment rights, either. Unfair dismissal? Doesn't exist.
So, yes, contractors pay less tax. Although contractors pay VAT, corporation tax and tax on dividends, as well as income tax and national insurance. Meaning we also need an accountant. And if you're as clueless about paperwork as I am, you're always panicking about your tax returns and payments, and whether it's right and you're up to date and whether you're going to be taken to court for being 5p out on your VAT return or whatever, meaning you hire an expensive accountant to do all that for you.
In the end, there's a lot more more risk being a contractor than an employee - much the same as being an Uber driver is riskier than being a regular taxi driver, I suppose...
"I know people think contractors pay a lot less tax than permanent staff, but that's not the case"
Not the contractors I know: they pay very little tax. They take a small salary from their company, employ their wife who is the second "director" to do nothing and pay her a salary too and both take low tax rate dividends. The total tax paid by the pair of them is a fraction of what the contractors would pay if they declared their contracting earnings as income.
@Persona - don't get sucked into the soundbite BS from the taxman. The bit you're missing is that contractors pay *different* taxes. VAT at 16 or 20% of revenue. Corporation tax at 20% of profit. These are paid out of the ltd company. You need to leave some in the company for insurance, accountant, training, kit, sickness/absence/no work etc. Then of the money that you take out and pay yourself (and optionally, your spouse), there is a nominal amount of income tax and NI, plus tax on dividends. As an example, a contractor on £600 per day will probably pay in the region of £50k in taxes for the year. (circa £21k in VAT, £23k in corp, maybe £6k in personal taxes). PAYE raises that to £62k deductions.
If they go permie on £75k, the taxman gets £22k per year in total deductions.
It's not the same environment at all. Contractors don't worry about retaining their job, permies do.
A contractor that is unhappy, goes somewhere else to work. A permie that is unhappy goes to the pub with other permies to moan about their bosses.
Contractors are business people, permies are just workers.
Companies treat permies differently because they know permies are constantly in fear of losing their job.
There's massive stigma in being made redundant, being fired or quitting a permanent role.
There's no stigma in a contract not being renewed. It's par for the course.
As for desirability in the job market.
A person that has spent 10 years sharpening their knowledge across dozens of clients is a lot more appealing to a business than a permie that has spent 10 years dulling their skills at the same place.
Unless they're hiring for an undesirable or boring role...e.g. software testing, desktop support, data entry etc..
Sweetie, you would not believe how "software testing" has changed in the last 30 years. Some of us also, you know, code a bit.
Plus, testing is fun. We break it, you fix it. We are like toddlers at nursery. So you're code is A1 squeaky clean? Nah, here, broke it, now go fix it - and come back with biscuits, chocolate ones.
I have to disagree.
I pay the same tax as any permanent employee on all of my income each year through the tax system, the only real saving these days (and it has been like this for a few years) is that national insurance isn't payable on dividends. Employee NI is capped anyway but employer NI is about 10% with no cap - that's the only difference between me as a contractor and me as an employee. 10% of whatever my end of year dividend is.
However... this is why I contract: I can take as much holiday as I like. I don't work extra hours beyond 9-5 Monday to Friday except on very rare occasions. I don't have to deal with the politics. If something changes and I don't want to work there any more - I just don't renew and find something else. I show up, I do my job, I go home and I have a life.
I could earn more as a permanent employee but I choose not to - because work life balance and wanting not to feel like a rodent on a treadmill.
A bit less tax. A bit less income. A lot happier thank you. YMMV.
"even though they have the overheads relating to the company as I explained previously"
And as everyone else has been trying to explain to you, they won't have those overheads, because they'll be paid for by the employer.
For example, as a PAYE employee, you don't need to pay an accountant to make sure you're paying the correct taxes, because your employer's accounts department will have already done that and paid the tax before your pay cheque hits your bank account.
If people are on-payroll with Barclays or an agency (and there's no involvement of their own limited company) that's a whole new legal minefield. Not least being entitled to a permanent contract after two years continuous employment.
I suspect what's going to happen in practice is that Barclays decide everyone is inside IR35 and you'd carry on using your limited company as usual. That's not clear from the Barclays letter or the El Reg article.
I would imagine ex IR35 contractors will be employed by Barclays Bank Contracting - an arm’s length ‘owned’ company - on a different contract to permits. In this case you can curtail normal T & C’s Permies have.
Similar to the shenanigans at councils to do with assorted contracts in the wake of various pay scandals.
You don't need to use a separate company to offer different benefits to different groups of employees. You just need to make it clear who is in which group, and what benefits each group is entitled to. E.g. company cars. Either you're in the group of job roles that comes with a car, or you aren't.
If Barclays are genuinely going to directly employ additional staff on a 'temporary' basis they'll need a fixed term contract and after two years continuous contracts will be legally permanent employees...
>You don't need to use a separate company to offer different benefits to different groups of employees. You just need to make it clear who is in which group
And the easiest way to do that is to have a separate 'contract services' operation, agree this doesn't actually need to be a separate Ltd, but given what the IT industry did in the 90's it makes sense for it to be a different Ltd. then the 'contractors' are effectively employees of Barclays own agency/services group, who can be sold into Barclays customers...
Barclays aren’t trying to save money. They are attempting to minimise cost increase. They know costs are going up because of this Government initiative, by putting disguised employees through PAYE they put the bulk of the liability at the employee, not corporate.
My previous employer fired its staff interpreters to replace us with 1099 workers contracted through an agency. As employees we could be shuffled to cover in-house needs as they arose during our shifts and 1099 workers covered holes we could not. The 1099 workers cost 66% more per hour and have a two hour minimum even if they come in to cover a 20 minute staff meeting. Just yesterday I ran into a former coworker who informed me that monthly interpretation/translation costs have more than doubled since this change was made. Yet the director who made this decision still insists the department is saving money despite it being self-evidently not the case. Yes, there is an outside funding stream for 1099 workers but it is static and did NOT increase as a result of the decision to use only 1099 workers.
As stated previously, nobody does the maths.
I returned to contracting after am 8 year absence and was billing in at 20% less than when I left. After a couple of longish (1 year and 2 years I'm a Project Manager) assignments I'm nearly back to where I was 10 years ago.
I'm not seeing many technical contractors experiencing huge fee increases either. Some are on the same rate as me as a PM but I'm working with niche specialists who command a premium. Anyone thinking they can get a 35% increase in rates is dreaming. Finance was the highest paying sector by far jump ship to another finance company outside IR35 but if you move into central or local government / heath etc. you'll probably see see a fee drop and be inside IR35.
Some of us have now moved to Public sector work with outside IR35 contracts. These are at higher rates than before April 2017 because people are worried about IR35 and are therefore avoiding .Gov work.
IR35 is a bump in the road, but for us "lifers" it is just another hurdle to be cleared. Contracting isn't going away even if the opportunities do decrease overall, the fact remains that without talented resource lots of British, European and American IT projects don't get done.
Apparently yes. This was the case for someone I know who was employed on a set of 1-year contracts, who then pointed out that he was effectively a permanent member of staff, which the legal eagles (after consulting external legal eagles) conceded, and then changed his contract for that.
Cue lots of ex-contractors who are now PAYE being "let go" after they get close to being eligible for longer-term employee protections.
Note to self: must complete move away from banking with Barclays. Business account is already with Starling, which is like a breath of fresh air :)
If a contract continues with substantially the same wording as before, albeit on a 'PAYE Basis', then HMRC would have an arguable case that if the post-April contract has been admitted as being inside IR35 then the previous contract would necessarily also be inside IR35.
The consequence of accepting such a contract at Barclays is that it opens up the risk of being assessed for IR35 on any and all previous contract time there.
The HMRC have graciously stated that "they will not pursue previous contracts at the same location".
But then given the HMRC's previous record, one would no more be inclined to trust them and take them at their word than one would trust and take that of Boris Johnson.
"The government just shoot themselves in the foot.
They should just adjust the tax rate to make the non NI contributions fairer, (a once a year tax calculation)"
I've always said that there should just be income tax. No NI, no CGT, no inheritance tax. No difference between earned and unearned income. All income from that tax year is taxed the same way (with graduations, as now of course), including inheritance. (For inheritance, I favour a 'lifetime allowance' for gifts that you get tax-free, and above that you pay a decent wodge of tax. Because the recipient pays it rather than the estate, and gifts (of above, say, £1000 per person per year) are also in this, all shenanigans are off.
Then personal services companies are largely pointless, since all income is taxed the same way, whether routed through a company or not.
A company confers limited liability, so that the roof over my head is not at risk via the failure of my means of earning a living. I sell my own software, for very little money, I'm sure I could generate more profit from a paper round( do they still exist?)
I started a s/w company as a lazy sod, who had a grand dream of sleeping until noon, and writing code on the beach. Reality and family intruded, and now I work about half the year generating s/w research, and a few months a year contracting. Most of the research goes into open source, or ends up being used to provide some advantage in servicing my contracting clients, keeping the wolf from the door.
In my brief flirtation with indentured servitude, I can earn more money, than as an employee of my firm. If money is what you want, be a permie. Sadly, I don't have the money, shiny, gene. I've tried working for someone else. More cash, less everything else.
I still sell some S/W, tbf I think it's just customers trolling me now.
A company confers limited liability, so that the roof over my head is not at risk via the failure of my means of earning a living.
Sure. The suggestion which was made is: every pound you take from your company in dividends should be taxed as income, no differently to an employee (and income tax / NI should be merged for this purpose).
To make this work, two things have to happen:
1. Corporation tax has to be abolished. Money is taxed only when it's withdrawn from the company.
2. Equalisation of rules for allowable expenses. E.g. currently employees cannot deduct travel-to-work costs, but contractors can (subject to limits on the length of the contract and/or the proportion of work days travelling to the same site)
I love how everyone fell into the trap. It’s now a contractors vs permies war, which is what the Government wanted. It keeps people distracted and stops them asking “why not just change the tax rate on dividends?”.
Anyway... Tax is used to incentivise and disincentivise certain behaviour. Think Council tax on empty property. It can increase to 200% because empty property is to be avoided.
If you remove corporation tax you incentivise hoarding. That means less cash in circulation, which holds back growth. That is bad for pretty much everyone except the guys holding a shit ton of cash.
Your idea also raises various questions such as “what does withdrawn from the company mean?”. They pay tax when they pay my salary? When they buy parts? When they service debt? When they invest in something?
If not, do you think there might be some loopholes there? It looks like your idea is focused on personal service companies, but it would also apply to Tesco, JLR, BT etc. It’s not simple to make tax simple whilst still being reasonably effective.
"Anyway... Tax is used to incentivise and disincentivise certain behaviour. Think Council tax on empty property. It can increase to 200% because empty property is to be avoided."
And HMRC wishes to disincentivise small entities because they take more effort to manage than large companies that do all of HMRC's compliance work at their own cost.
Companies under £500k/yearr tend to create a lot of work ( for HMRC and HMRC would like them to just go away if possible (ref: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752467/181018_CT_stats_2018_-_11.1A_footnote_amendment.pdf)
HMRC also wish to stop employers pushing NI contributions onto lower paid staff by forcing them to become independent contractors (think logistics workers where large companies offload warehouses to third parties and move employees to contractor status).
That covers some of HMRC's motivations for the change, but doesn't tackle the historical reasons behind single person limited liability companies or appear to address any economic impact of these changes.
Dividends are taxed, I don't know what the rate is, but they are taxed.
1) Corporation Tax is fine, but it's set too low, and should be raised back to the 30% level.
2) Removing expenditure from business is just silly.
As a permie, travelling to work is not an expense, which is incurred as part of earning the money.
It's a cost related to your living situation, and, therefore not an expense, your company can reclaim.
When an employer sends a permie to another country, they pay for your travel and your hotel, that is reclaimable.
Partly why it seems unfair is that in your example, your subject moves from being the worker, to the employer.
As the employer, the business can reclaim exactly as your employer can.
As the worker, I don't get to claim the bus to work, exactly as your permie can't.
That the same person can wear both hats, doesn't change the point, expenses incurred to generate sales are legit.
Expenses incurred because one is a spendthrift are not allowable.
A better example is the computing equipment, which I provide, and your employer provides for you.
Which is why the cost of my equipment is an allowable expense.
I would encourage you to give it a try, if you're convinced it's all trebles at the bar. I expect you to undergo a Damascene conversion.
1. is not completely necessary - you could simply allow corporation tax paid as a credit against the income tax payable. This is what is done in Australia and New Zealand ( they call it imputation tax credits). Doing it that way prevents tax optimisation by means of withholding the dividend- the Corp tax is still paid and only the step up to income tax rates is held back until the dividend is released.
Not sure what you mean here.
Assuming you mean raising corp tax levels?
Corp tax is too low, it makes no difference to me as it comes out of the end, and doesn't affect price to end customer.
It's a fairly simple tax, and I'd be happy to pay a higher rate of corporation tax.
VAT on the other hand means, that to the end customer, a VAT registered trader is 20% more expensive.
So there is direct impact on small business dealing with the public, e.g. sparks, gas.
Corp tax increase will be largely absorbed, it's paid on profits, so falls on the broadest shoulders. Oh and did I mention it's set too low.
BTW guess which tax the majority of the people on the fiddle cannot avoid and so complete for a lowest rate..
> Not sure what you mean here.
> Assuming you mean raising corp tax levels?
I wasn’t suggesting anything about the level - it’s a few years since I lived there and I don’t know what the current UK rate is!
However I understand that UK dividends are taxed at a low rate separately from the Corp tax paid on the profit, and the poster I was replying to was suggesting fixing that by eliminating Corp tax.
The system in NZ taxes the dividends as Income at the same rate as any other Income you may have. The Corp tax that has been paid is offset against that tax amount owing when the dividend is paid (the process is called imputation) and any additional Income tax still owing is deducted as the dividend is paid.
There are a few corner cases that are dealt with in the tax return and there’s no equivalent to National Insurance in NZ - so that would add complexity, but as a system it’s much fairer, more consistent and harder to exploit than the UK one.
Why is a contractor automatically assumed to not be paying NI?
Yes, NI is voluntary...but I am a contractor and I pay it...I have a family and the benefits of paying NI are worth it....e.g. child care vouchers and so on (even though access to them is limited...because self employed).
It's not really in anyones interest to swerve NI...maybe if you're younger and don't have a family yet and you aren't able to charge higher rates yet...but otherwise, it doesn't make sense.
Whole that idiocy will vanish or disrupt whole sectors of the market.
Less commuting by contracts, less buying stuff or services like accounting services. Headhunting agencies will be hurt as well.
Much more UK (IT) contractors will start applying for contracts outside UK.
Using IR35 on public market caused only increase daily rates or looking for other ways to hire contractors outside IR35.
Parliament and HMRC are thinking that if they will crush in they hands all contractors to squeeze more money that as outcome will be produced diamonds. However even kid playing in sandpit knows that if someone will try to take to the hand something which is warm and soft and crush it all will leak between fingers.
No one is even trying to encircle financial Gov problems and/or negotiate other ways.
"Much more UK (IT) contractors will start applying for contracts outside UK."
Almost all won't. Most Brits cannot speak another language, so Anglophone countries only, more or less. And for many people, uprooting your whole family because you have to pay tax is not going to fly as an idea.
Switzerland is ace.
And post brexit reciprocal right to work/live already sorted.
You'll probably end up contracting as an employee of the agency (watch out for how they quote gross rates - from which they take 20% employer deductions before passing you your 'gross')
You should end up keeping about 75% of your gross income, so limited incentive to invest 20k and pay 4k costs to set up a Swiss ltd co. Also plenty of English language jobs.
Yep, the one where the only thing that has been agreed is nothing is agreed until everything is agreed. Which is why it design so they can roll over all existing laws for eternity because that how long they know negotiations will take. Well at least ten years, which is a eternity in politics.
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More FUD BS from remoaners
I work for a company in an EU country, we have 26 nationalities, precisely 6 of those are EU nations. So, no, the UK being a 3rd country will have no effect whatsoever on Brits working in IT within the EU.
We have Indians, Turks, Azerbaijanis, Colombians, Argentinians, Americans, etc. etc., etc., it takes our HR people about 2 weeks to organise a visa from nearly anywhere in the world
>So, no, the UK being a 3rd country will have no effect whatsoever on Brits working in IT within the EU.
Your example, whilst of an EU nation, isn't really about the EU. Those 20 non-EU nationalities have simply passed the immigration requirements of whichever member country the company is based in, they haven't got EU "roaming rights" just rights to work in a single specific country.
So in some ways, specifically for permanent jobs, wholly based within a specific country what you say is correct. However, from the perspective of short-term contracting or maintaining a team based out of the UK where individuals will be roaming around the EU27, things are a little different and the UK being in or out does have an effect. Unfortunately HM Government is unable to tell me just what the situation will be because it is wholly dependent upon what deal (if any) the UK agrees with the EU...
Having done a stint in Germany I really enjoyed it what, I didn't enjoy was checking into the airport at 5:50 in the morning ans not landing until 21:00 on a Friday night. I was only a 30 minute drive from the airport in the UK but a 2 hour drive at the German end,. On that contract the £450 per week flights, hire car and accommodation was paid for by my client, as the role was officially based in the UK, think about what rate you'd need to achieve to cover those costs. Then wonder if there are locals with the same experience and knowledge who have the same skills who can bill in 50% cheaper. I was worth the money as the clients head office was in the UK and it was an English speaking organisation my ability to work with our UK suppliers and technology partners made them willing to pay the bills. This was a short term engagement which rolled on for a year in 6 week increments, so there was no option to bring the wife and kids over nor to rent a house so it was Hotels all the way.
> Almost all won't. Most Brits cannot speak another language, so Anglophone countries only, more or less. And for many people, uprooting your whole family because you have to pay tax is not going to fly as an idea.
Today English is king of "lingua latina" of the IT.
Last year I've been working for Infosys/Proximus in Brussels and year before for Huwai/KPN in Hague. Literally ZERO communication problems
Working outsize UK not knowing local language is not a problem (at all).
Biggest problems are local regulations about contractors.
Not too hard for many contract positions. They will just rewrite the job spec to fit the candidate they want a work permit for.
Let's not forget that English is the international language of business, navigation and diplomacy. Brits don't need to bother learning another language.
"Today English is king of "lingua latina" of the IT."
Yes, but you have to actually live in the country as well. For somewhere like Berlin you can get away with only knowing English for most things, unless of course you ever need to interact with the German tax authorities. But that is a lot less likely in Essen.
"Yes, but you have to actually live in the country as well. For somewhere like Berlin you can get away with only knowing English for most things, unless of course you ever need to interact with the German tax authorities. But that is a lot less likely in Essen."
Not nearly as much of a problem as people in the UK believe, if the actual company you are working for has an English speaking office (and many UK and US companies do), you have 2 issues left which is the authorities and accommodation.
As far as tax and permits go most companies can help you with that, or just taking a fluent workmate along is fine, the average letting agency will have an English speaker in my experience, in the case of the Dutch they have expat centers with English speaking staff who will arrange everything required legally for you in one visit. (this is leaving aside the fact something like 92% of Dutch citizens speak English as a second language anyway, I believe they have the highest rate of English fluency in Europe)
It's not 1910 anymore, people move around widely and particularly in large cities there will be plenty of English speakers, in many countries outside Europe many people only know English in addition to their native language and many people in Europe working with the public encounter English speaking tourists who are not English, also add the fact at least for Germany many now learn English at school, if someone is under 30 there's a good chance they will understand you, typically if you ask someone if they speak English they will reply "a bit" , and you will then find yourself conversing for the next half hour on quite involved subjects!
After that comes food, learning local names for food is first, Google Translate or a good language dictionary will help you with that, in any supermarket there will be only 2-3 questions you need to know the responses to, in Germany it's usually "have you got a loyalty card?" and "kassenbon" which means receipt (as in "do you want it?").
Ideally and as a courtesy you should learn the local language and it does make things easier and smoother but it's not the huge barrier people in the UK imagine to working in another country, I've been out of the UK for ten years now and the above is my experience.
Overall in Northern Europe I find the the standard of living is better, and it's definitely cheaper to live in Germany and the Netherlands than the UK in my experience.
Also to add quite a lot of TV shows are American and British, and depending on the country these are often just subtitled (Germany does dub a lot more stuff as the audience is larger and makes this worthwhile) therefore you can buy a tv package and be able to understand a lot of the content.
"lingua latina" - Is that some software product that enables speakers of different languages to communicate, a bit like like a babel fish ? You might mean "lingua franca", which English certainly is both globally and specificlly in IT.
An excellent example of miscommunications between speakers of different native languages, even using a "lingua franca" like English.
Why would anybody downvote this when its the truth. All larger multinationals across the continent use English as their business language. Sure, they break into the local lingo when they need to but otherwise British working in a professional capacity across Europe is not a rare thing.
"Not in the EU if we Brexit they won't. US won't let them in either."
Much as I despise Brexit, even a No Deal won't mean you can't work in Europe, there will just be a lot more paperwork, most European countries companies employ staff from all over the World, we will just be in the same position as most non Europeans (Americans, Indians, etc.), so visa's, work permit's etc.
Most European countries just look on this as the UK Government going barmy, they are not going to prevent their companies employing a suitable British employee just because of that, there will just be a few more forms to fill in, most European countries are practical about this, there's not the Daily Mail inspired xenophobia which seems to have infected our Government.
Er, plus the need to demonstrate the role could not have gone to an EU citizen first. Which is a hell of a bar.
"So, Mr. Employer. Can you show that no one from the other 26 countries in the EU could fulfil this vacnacy ?"
That's before you factor in the subtle politics which are going to make British people slightly unpopular anyway.
It's just upsetting that the morons ripping our EU citizenship away from us are probably those that used it least.
"It's just upsetting that the morons ripping our EU citizenship away from us are probably those that used it least."
That is so true. I so wish "the morons" could understand that, just becuase they have failed to take advantage of opportunites that have become available in the past 40 years, is no reason to deny those opoortunities to everyone else in the future, including those who are not yet born.
"Er, plus the need to demonstrate the role could not have gone to an EU citizen first. Which is a hell of a bar.
"So, Mr. Employer. Can you show that no one from the other 26 countries in the EU could fulfil this vacnacy ?"
That's before you factor in the subtle politics which are going to make British people slightly unpopular anyway."
Er no it's not, this may surprise you but there isn't a glut of IT skill in any country, plus the locals still have lots of "traditional" jobs to go for, not every country threw away it's manufacturing and engineering jobs to move to a service economy.
Having worked in Europe I have worked with people from the US, India, China, South America, you name it, this is just an excuse trotted out by people too timid to try, if you apply for a job you will be considered like any other candidate, consider companies based abroad often have UK clients, is being a UK native such a handicap in those cases?.
British people unpopular in Europe?, maybe stop reading the Daily Mail or the Express, it may shock you but Brexit rarely rates a mention in the foreign press, they might think our politicians are mad but British people themselves don't cause much anger, over and above any other nationality.
This is what an older family member blithely said, when the disruption of Brexit was bought up recently. But because they aren't a politician and couldn't get away with spouting shite, my wife reminded them that since they had never actually worked abroad, they hadn't the faintest clue what they were talking about, and there won't just be a "return to how it used to be before we joined" since the entire EU had moved on since we joined and the rules were markedly different.
so things are changed and there are more hurdles to over come?
I work with a large number of talented engineers who's country of origin is way outside of the EU but they haven't had much issue working here or throughout the EU. How is it they can do that in large numbers while there is such project fear about UK nationals being able to work in the EU post Brexit. It won't be UK rules and regulations stopping that, it'll be EU rules and regulations providing barriers to UK nationals, the same EU that permits these talented engineers from outside the EU from working in the EU, i don't see why the EU will intentionally block UK nationals from doing the same with no good reason. Or are you suggesting the EU will deliberately block UK nationals?
"This is what an older family member blithely said, when the disruption of Brexit was bought up recently. But because they aren't a politician and couldn't get away with spouting shite, my wife reminded them that since they had never actually worked abroad, they hadn't the faintest clue what they were talking about, and there won't just be a "return to how it used to be before we joined" since the entire EU had moved on since we joined and the rules were markedly different"
Well I do work abroad and have done for some time, and in this case I do know what I'm talking about because the Immigration Police in my host country have supplied detailed information on what will be required (In English), for each possible scenario for Brexit, and they did this a full year ago in stark contrast to the UK government who have sent me, a UK citizen working abroad, precisely nothing.
> in stark contrast to the UK government who have sent me, a UK citizen working abroad, precisely nothing.
Today I received my first text message from HMPassport:
Passport validity rules will change after Brexit, you may need to renew earlier than planned. Visit www.gov.uk/brexitcheckpassportsms
The fact that they can't give information that is actually helpful, beyond telling you whether for an specific country your passport may or may not valid or whether you will need to complete additional forms if your visit is for work, gives an indication of the minefield we are entering...
"Most Brits cannot speak another language, so Anglophone countries only, more or less. And for many people, uprooting your whole family because you have to pay tax is not going to fly as an idea."
For a spell I did a weekly commute to N Ireland. Dublin would be just as commutable.
>For a spell I did a weekly commute to N Ireland.
Well given Dublin is only around the hour from many UK airports, it is eminently commutable on a weekly basis. Something I did it for a couple of years, along with many others on the monday red-eye's out of East Midlands.
It's not the language barrier. No matter how hard you try, practise the accent. They wait politely and then reply in flawless English.
It's Brexit, and my insurance not being valid in EU, the rules on providing services to EU clients.
There is a shedload of work for English speaking techies.
But it increasing comes with this caveat, from this mornings batch.
"You must speak good English and be eligible to be a freelancer in Germany (e.g. be a EU citizen, or be a permanent resident of Germany, or hold a German freelance visa)"
IR35 is less on an issue, get insurance, keep good records, and be a legit business. If HMRC comes knocking, QDOS will send them packing if you are a "straight goer". IF you are dodgy, well fair enough, I hope HMRC win.
"You must speak good English and be eligible to be a freelancer in Germany (e.g. be a EU citizen, or be a permanent resident of Germany, or hold a German freelance visa)"
When you look at a contract in the UK you research it first and see if it's viable right?, same case with Germany, for starters we are still members of the EU till 31st October assuming the can isn't kicked down the road even further which is possible.
If there's a deal there will likely be some agreement over free movement, at least for employed people.
If it's No Deal you approach it like someone from the US or elsewhere outside the EU and look at the costs, for the Freelance Visa it's €60, hardly earth shatteringly expensive, for health and other insurance shop for quotes but I'm willing to bet it's not devastatingly expensive either, depends how much you are likely to earn, and the cover you want.
The Germans have a number of tax deductible expenses too, you need to see if some of these costs can be claimed.
There are lots of British people working fine in Europe, and they will continue to work even if we Brexit, if you want to do something you will do it, simple as.
My current client is in the EU, and I work remotely from the UK, so it's less relevant about the local regulations, for me, and more about rules on VAT and sale of services.
However, I simply point out that this is a recent and unwelcome development, which didn't apply to the extant engagement.
The result of this is likely that I will stop working for that client for a while as VAT is complicated, and the advice below is not reassuring.
The rules around ‘place of supply’ will continue to apply in broadly the same way that they do now, areas of potential change are flagged below.https://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal/vat-for-businesses-if-theres-no-brexit-deal
>for health and other insurance shop for quotes but I'm willing to bet it's not devastatingly expensive either, depends how much you are likely to earn, and the cover you want.
From experience the cost of these insurances is trip duration. If you are commuting on a monthly/bi-monthly basis then a policy that covers you for trips of up to 60 days will cover you.
Each time I've worked abroad, I've used it as an excuse to go exploring.
Try to learn a little of the local lingo, enjoy some of the culture.
In Brussels, little boards of beer, and by the time you've finished, no choice but another round.
I'm sure that the insurers will sort something out, but for now they are a bit vague, as too what changes to my existing coverage are required if any.
In tri-lingual countries like Belgium and Switzerland its common for large projects to be conducted in English. Making everyone work in a single foreign language is easier than arguing which local language should prevail, or, worse the pain of translating each and every document into two other languages.
Given the number of number of IT contractors in the country, it's highly unlikely that all of them can quit and look for other jobs either in this country or abroad. There simply aren't enough jobs available. It's the same for demanding higher rates. Some people will be successful and others will just have to accept what they are being offered.
Only the best contractors will be able to pick and choose their jobs and rates. It may come as a surprise to some people, but not all contractors are high performing experts that we expect. There is a mix of good and bad, just as in any industry. I have worked with some truly amazing contractors, but also contractors that I am amazed managed to get past the interview.
If headhunting will suffer,then why is it Resource Solutions that are mastering this approach at Barclays, Lloyds and Prudential? (contractors contract with Resource Solutions who then have an Master Servcies Agreement with the client)
Surely they are hurting their own business? or perhaps they earn more for employee recruitment overall?
Something I genuinely don't know.
Is there a number of hours/week below which IR35 would not apply? e.g. if a contractor only did 2 days a week at employer A and 3 days a week at employer B?
Is there a duration of employment below which IR35 doesn't apply? e.g. if a contractor went in 'full time' for a couple of weeks would that still fall under IR35?
"Is there a number of hours/week below which IR35 would not apply? e.g. if a contractor only did 2 days a week at employer A and 3 days a week at employer B?"
IANAL, but if you have two distinct employers, and it isn't disguised (like working for Santander two days and Sabadell the other three) then you should always fall outside of IR35. But I quite possibly misunderstand the legislation.
You're not supposed to work it out. You're supposed to give in, go with the flow and roll over because anything else is too much trouble.
The government doesn't care about whether industry is competitive, consumers are happy etc. They just listen to short-sighted accountants who see a tiny fraction of their income escaping and are prepared to go to any expense to avoid it.
Compare with cost/benefit of chasing benefit claimants : there isn't any, but it makes the Daily Wail happy to spend more than they recover in clawback. So they do it anyway.
@DavCrav - my understanding is that you're right - having more than one client at a time almost certainly puts you outside IR35, but if you asked 5 people in HMRC you'd get at least 6 different answers.
What Barclays is doing is just making sure that they don't end up in and difficulties wrt IR35 and, given some friends' recent experience with HMRC and their understanding (or not) of the rules, I honestly don't blame them. This makes it easy (from a legal PoV) for Barclays, but we shall have to wait and see if it impacts their ability to get the expertise they need.
> IANAL, but if you have two distinct employers, and it isn't disguised (like working for Santander two days and Sabadell the other three) then you should always fall outside of IR35. But I quite possibly misunderstand the legislation.
I'm inclined to agree. Plenty of people (outside of IT) have two part-time jobs to make the equivalent of full-time employment. Each employer treats them as a part-time employee and pays PAYE and NI contributions for them based on their wage as a part-timer. IR35 doesn't affect these people now so I don't see why it would affect former contractors in the future if they worked for two firms 'doing a Barclays'.
No, according to HMRC guidelines the number of clients makes little difference, it is the working conditions at each client that determine the status.
If you are named, if they tell you what to do, when, and where, then you are inside IR35. You could have 10 clients doing this and they would all be classed by HMRC as inside. It is slightly more nuanced than this, some of the criteria are woolly, or difficult to prove, hence the confusion.
Sucks, I agree, but unfortunately I don’t have influence on HMRC..
"No, according to HMRC guidelines the number of clients makes little difference, it is the working conditions at each client that determine the status."
Yes, I thought about it later and remembered that having more than one contract looks good, but things like being able to substitute yourself for someone of equal skill, etc., are much more important.
I wondered whether that condition is satisfied when companies sponsor athletes.
Whenever these doom and gloom stories about staff fleeing in their thousands pop up, I never notice much shift in uptake of staff from elsewhere.
Generally "skills shortages" is an employer weasel phrase for "we can't find skilled people who we can pay peanuts too ...."
This goes to the crux of the issue - the "personal service company". Some clever person decided that if the directors also deliver the company's service to clients it's a different kind of company from that where the directors sit on a board and employ others to deliver the service. Capita et al fall into the latter category. We individual contractors fall into the former. There's no rational or logical reason for the distinction, nor is it (as far as I know) grounded in company law, but the makers of regulations have never been concerned about that kind of thing. However I wouldn't be very surprised if someone found out that the big consulting firms had a strong influence on the decision. All is fair in love, war and capitalism.
Obviously they are targeting single person companies, but what if it is a company of two, or eight, or 500? When they are paying a company for the services of a contractor, that company can be of any size. Obviously they are still going to engage contractors from big companies, so there must be a line somewhere.
The IRS did similar crackdowns years ago, and to protect themselves big companies will no longer deal with single person companies. They do this by refusing to deal with companies below a certain size, or these days mostly have a small list of approved vendors. So if you want to contract for them, your single person company has to go through a middleman who takes a cut (when you arrange things yourself, the cut should never be more than $10/hour)
So put it in your wife's name :)
A friend of mine actually did that for his consulting business, because she was in the national guard and went to Iraq in the first Gulf War so it was owned by a veteran and a woman, which gave him a leg up in government contracts...
Not sure if that's the case if you file separately (which is an option in the US)
But probably. In which case you need to find someone you really trust in the same situation and swap ownership with them. You'd have to make allowances if you both can't take out the same amount of dividends (i.e. the one who makes more would have to take more in pay to equalize the dividends)
Presumably as the term ‘contractor’ also covers painters, plumbers, electricians, mechanics, cooks... they’ll also be adding a couple of new departments to cover these roles? Oh.. no? Only certain ‘contractors’ are being impacted? Seems fair.
In principle, the same rules apply. If you paid the same person to do painting, 40 hours a week, all year round, they would probably count as an employee for the purposes of IR35. But if you paid a company to send *a painter* (and each week it might be a different painter) then it would be less likely to be counted as employment.
Another issue is around control. If you directly instruct the painter *how* to do the painting, that's employment. If you tell the company what needs to be painted, and they decide themselves what method to use and when to do it, that's less like employment.
Risk is another aspect. If you negotiate a fixed price job, and there is some risk to the contractor that it may overrun or there is reworking which needs to be fixed at their own expense, then again it's less like a case of employment.
IT seems to be singled out because in practice, few companies engage a freelance painter (or plumber/cook etc) on a long-term, full-time basis.
Engineering companies do the same.
A certain automotive manufacturer based in Cheshire does this, some of their contractors have been working there for years. You're treated like an employee, being told what to do and stuff, without the benefits of holiday pay or company bonus. You can only become a permie if a position opens up and you pass the interview.
Ministers and people who work in HMRC and make policy are familiar with the idea of getting a painter or a plumber in to do work on their house. They have no difficulty in recognising that they aren't employing such trades. They don't usually have computing contractors in to work on their houses so those are "different".
The difference is plumbers and electricians are employed for small periods of time to carry out a job, often in a specified period of time, most of the time there isn't even a contract involve especially if they are working for the general public.
Many IT contractors are essentially employees who have spend years at a company. The company keep as a contractor to save money. That why people in the IT industry are scared and why electricians and plumbers aren't.
For A IT contractor that works like a electrician or plumber does, they should have no issue at all, they go into a job, do the job and the leave and the contract is terminated. These are relatively rare because most IT people need time acclimatise to the set up at a company before they become useful. An even simply projects can have long gestation period, much longer than your average plumbing or electrician job.
I'm an employee but of a different company.
It's like I'm a Father, but the boy is not my son.
The clients want some statement of work built at a price agreed between us.
If I do it on my premises, my kit, on my time, to my design and I negotiate the rate.
I'm in business on my own account, just like my clients.
Try to understand, it's not about the scale. It's simply are you really in business or not.
1. [Y/N] Do you read your contracts?
2. [Y/N] Can you, and do you, regularly amend terms to suit your preferred working arrangements?
3. [Y/N] Can you pick up the phone to someone to cover your work if you fancy sacking it off for the day?
(3) is right of substitution.
(1) and (2) are subject to control.
Most of the time, painters and electricians they come in do the job and go and are never seen again. This is targeted at people who spend years at a company as a contractor working under a contract that state for example that person as to be in at 9am an depart 5pm and 1hr break.
Please, please don't leave us. We need your skills to support the legacy system. What do you mean, when you say that on top of wages, we have to pay extra for National Insurance, private medical, training, liability insurance, accountant fees, asset depreciation, VAT, and you want 5 weeks paid holiday, sick pay and overtime pay if working over the contracted 35 hours/week? Sorry, yes we did forget car allowance, business class travel/hotels and on-call allowance.
I'm afraid we can't do that... hey where are you going.... don't you want your free coffee?
If BoJo crashes out in defiance of the Benn Act there'll be a good case for arguing that we never left so the whole mess could be unwound fairly quickly. Once a few factory closures have been announced and it dawns that the increased price of foreign holidays isn't entirely down to the demise of Thomas Cook getting back in will be a political imperative After all it'll be almost impossible to find anybody claiming to have voted Leave.
They already do. As I understand it there are various ways to lower the tax burden, but I understand the biggest dodge - paying yourself minimum wage and collecting the rest as dividends - has already been dealt with by slashing the amount of tax free dividends and raising the tax rate on the rest. Mostly contractors pay a very similar tax rate on their income as anyone else - albeit on (usually) a higher income for their skillset to compensate for the additional flexibility on hiring and firing them.
IR35 means that these people will now be treated as employees for tax and NI purposes, but as independent contractors for benefits purposes (holiday and sick pay, pension, training etc). The net result is that these people will have to pay tax and NI on all the costs they incur as a business, not just on their take home pay (salary+dividends).
As a permanent employee none of this applies to me, but I still think it seems rather unfair. As a thought exercise, imagine how you'd feel if HMRC said it was scrapping your tax relief on pension contributions, levying charges on all holiday and sick pay you receive, and would in future be treating all workplace training as a benefit in kind and charging you additional income tax on that as well. I'd imagine you'd be a little upset, yes? That's what IR35 is to contractors, if anything more so due to other costs of running their businesses that don't apply to permanent employees.
Please sod off back to the Daily Mail forums, they'll lap up your "fairness" and "British national interest" bullshit without a second thought.
"imagine how you'd feel if HMRC said it was scrapping your tax relief on pension contributions, levying charges on all holiday and sick pay you receive, and would in future be treating all workplace training as a benefit in kind"
How many readers here (in the UK) have come across the corporate concept called "salary sacrifice"?
It's not just contractors that are dodging taxes, it's employers too.
But best not mention that over at the Daily Mail.
This the main point. Im a well paid contractor. Every two weeks I travel to the other end of the country to meet the company's client (at considerable, tax deductable expense). I also pay 30% of the company's income into a pension because I happen to want to retire on something above poverty.
This new policy will make it impossible unless the client is prepared to pay whatever I tell them into my pension and pay my expenses as they would an employee. More admin for them and no benefit.
None of this is a tax dodge. But companies are incapable of managing it for employees properly, let alone contractors.
"As a thought exercise"
If this establishes two classes of employees, one receiving untaxed benefits and one not, how long do you think it would take for HMRC to realise they've left money on the table? The only thing protecting permies would be that HMRC employees wouldn't want to give up the benefits. However, in the gig economy the political pressure could start to build.
"I for one am very happy about the prospect of contractors paying taxes like everyone else. Because well, hospitals etc. I'm a believer in fairness and the British national interest. Controversial, I know."
I hope you're not making any pension contributions through salary sacrifice... and you best not have an ISA you tax dodger.
You’ve got to remember this is HMRC brining it’s agenda to the incumbent government.
And HMRC takes its guidance from the big consultancy companies it engaged to make recommendations. The big consultancy companies who will pick up the project work when them pesky independent contractors are out the way.
Calm down and stop panicking, the market will very quickly balance itself out.
Some will go “permanent” (no such thing these days, redundancies abound), some will go umbrella/PAYE, some will hold out.
The more that hold out, the better. And being brutally honest, if you are a contractor bleating about it being unfair because you “take the risk”, well here is your risk - if your Consultancy can’t afford to bench you for a few months, you were probably a disguised employee and not a real contractor. “But margins...” - yes, margins are tight, but if you haven’t made provisions for a downturn in the market (or market rate), then you’re not a very good business person, are you? (And for the record, I am a contractor likely to be offered perm or PAYE. I have some training planned instead)
Its a killer. Right now unless you are etonian you are about to be messed up bad. If you hadn't been already. Permie have the instability and jon security that was never restored since 2008 compounded with stabbing the country in the eye brexit style . Landlords are being made cashflow negative, no chance to sell since brexit has the throat of the housing market. Equity? You wish. Unless you are etonian with 15 or so properties and dont have to pay that tax (look it up).
Contractors, sure, its about fairness. It is also about if they succumbed to lifestyle creep (and many did) instead of investing every penny over their original PAYE income back when they were permie(could be a decade or more), and now find that they will have to find a way to a cheaper lifestyle. Which means they may have to sell a home. Good luck with that, there are fewer people in the country (one reason people voted brexit). See also landlords being crushed.
Oh, so it's to pay for gps? Get real , austerity closed those down for political reasons, making it easier to make Jonny foreigner the scapegoat for health shortages. More schools? Or make them academies and independents so your kid has little chance of going to a non rubbish school. More jobs? Hah, fat chance.
Unless you live on about 40k and banked the rest, be prepared for a rough ride. You will all have gone to Eton, or you will all be reminded that we are serfs to them.
Think it's better elsewhere? Nope. Wish you hadn't worked your socks off, invested money, and prepared to get a great future, now knowing it was a pipe dream? Join the club. Bleak times and the 2020's will be worse. Never thought I'd have nostalgia for the 90s.
Perhaps those people getting wasted in front of the telly were on to something...
Lots of posters here are delusional if they think non-public companies are going to cough up extra, just because (ex) contractors now have to pay their fair share of taxation. This is the Gig Economy going up market. We all watched it happen as we binged on Uber, Deliveroo (literally) et al., never expecting it to encroach upon the elevated world of "professional" jobs like IT.
Well, here it is, and unless the neoliberal revolution comes abruptly to an end (which it may still do with another 2008 style disaster), then this is our future. The share of the pie going to workers ( or "associates" in neolib speak) will decrease, and the share going to capital ("owners' rent") will increase - an inexorable trend since the late 1970's, of which this is yet another example.
Now they are trying to screw it up some more.
It's interesting how a company is an entity in it's own right like a person but IR35 is to undermine this.
A company is able to offer it's resources to the client such as computers and software it owns as well as perhaps more than one person able to work on the project.
The problem is the client really just wants a talented person to come and be an employee for a while.
Are IPSE and the other organisations that promote freelance and contract work going to take these businesses to court?
HSBC and Barclays have announced a restriction on contract workers, I know RBS and Lloyds are about to do the same, and other financial organisations are likely to follow suit. You can guarantee they've been talking to each other about how to approach this change in responsibility by HMRC, and If by all agreeing that the contractors should be inside IR35 are they not
a) admitting they were inside IR35 all along (and I know HMRC have said they won't pursue previous contracts, but that doesn't change the status); and
b) by working in concert to manipulate the contract market have they not formed a cartel?
Barclays have not said the contractors are inside IR35. They have simply avoided the time and expense of putting in a process to make the assessments and the risk of getting it wrong. Being such a large organisation would make them an obvious target for the taxman to check their processes and assessments. Getting it wrong would not be a good look! By ceasing to engage with PSC contractors, IR35 is no longer an issue for them. Provided they can still secure the resources they need in the future without using PSC contractors, they will have avoided the unnecessary effort and risk. Only time will tell if this pays off or if we see a monumental u-turn post April 2020. Also, they are not restricting contractors - they are welcoming them provided they are PAYE.
Have taken the PAYE perm opportunity and dropping out of contracting... this combined with hiring freezes, no chance at all of a 25% rate uplift to compensate, December furlough and Brexit investment apathy makes me feel like I have dodged a bullet for a while at least.
Hello paid holiday and cheap train tickets.
Goodbye VAT returns, visits to expensive shops and business lunches, and the 4 figure donations to charities and local schools from my business. In fact probably quite a few goodbyes to those shops and restaurants entirely as this money will rapidly empty out of the City and CW.
Second hand Mont Blanc anyone?
As a Barclays customer (yeah, I know, I know), I can soon expect a further worsening of service, then. Jeezo, this incarnation of IR35 is not really that different from the first. Once the anti-contractor bunch find they're losing all their contractors to clients that work with the rules in a more imaginative way, shall we say, then they'll all do it. There's many reasons for the contractor community and IR35 doesn't make them go away. #gladimretired
Maybe do some research into who is skimping on paying their taxes... its actually the company who does the hiring, they don't pay a employers NI. When you look at the combination of taxes paid by a contractor (both in the company and personally) it is very similar to that of a perm employee. It is the 13% employers NI that the government don't get.
Only a small minority of the contractors I've known have done the loan thing, and they are rapidly being obliterated by HMRC weilding the hammer of retrospective legislation. At least one of my friends will likely lose his house. So it goes, I suppose.
The rest, including my good self back in the day, simply preferred to take on more personal risk in exchange for a higher rate. All tax was paid. So there's no need to get nasty.
.. on their sharply elevating risk levels, thanks to this approach?
The capable will go elsewhere because they like being paid their worth which has pretty direct implications for the security of their operations.
Now, the fun question is, of course, if HMRC will suffer any negative consequences because of this, and my guess is no. After all, Barclays just caved, so many more will follow - until they realise they can't get capable people to solve problems.
That said, it is likely that some people will just group and set up their own agency. We've done this in another country as it allowed us to get MUCH better rates on professional insurance than compared to what we were bled as individuals.
The big question is have the Board of Directors shared their increased risk with the Regulators. Do the FCA and PRA have an opinion on any increased risk to Financial Services industry?
March and April are going to be interesting months for Bank service outages hitting the headlines, and who or what is to blame....
Why is a supposed Tory party still pursuing Labour's spiteful IR35 tax? This will destroy what's left of the indigenous IT market - in 97 this was the second largest IT sector in the world. Labour destroyed it by allowing companies to rubber-stamp their own cheap imported Labour which also encouraged outsourcing. now the so-called Tories are pursuing this awful policy. People working through a service company may pay less personal tax - but they pay more tax overall (corporation + VAT + personal tax + economic activity linked to running a company), the company hiring them have lower overheads and the government's overall tax take is increased compared to a permanent employee doing the same job - everyone wins - why are they pursuing this madness?
Large companies will do exactly what Barclays have just announced (which I predicted months ago) the result will end up with more outsourcing and fewer UK jobs - and it's only a matter of time before cheap outsourced labour with no legacy knowledge brings a blue-chip company to its knees. Thicko boards still don't realise that IT IS your business - not a cost to be chopped away at relentlessly.
Yes, it is just tax, hence why it should be absorbed into one straightforward income tax set of rates applied across all income.
"fund the appalling waste that is the NHS"
While the NHS may have its inefficiencies, I'd much rather have the coverage we do than to need to have insurance for everything. Nearly 5 million Americans filed for Bankruptcy between 2011 and 2017 due to medical bills. In the UK, Japan, Norway, France and Taiwan ZERO filed for bankruptcy over medical bills over the same period.
Guys as someone said everyone knows why people take contracts with risks, you get paid more via rates and less taxes, the govt ignored this for years knowing fully well how PSC's coould manage paying less taxes through intellectual accountants, but now it is time govt needs that extra 1.3 billions and hence the stick! go with it and adjust yourselves, just be happy that you all have enjoyed years of low taxes..just time to pay!!!!
No one in their right mind would take up a PAYE position at the same client even on a higher rate, unless it was for a completely different role and terms. They'd effectively be admitting their prior work at that client was inside IR35 and opening the door to an HMRC investigation for that period of time and clawback of taxes.
It happened in the Pubic sector to many a contractor, it'll happen here. The only real option for Barclays contractors is to walk.
I'm in the US and have a Barclays credit card. I missed one payment and got hit with an interest charge. (That's fair, it was my fault.) Being a geek, I calculated the interest myself... and got a different number. I carefully followed the instructions on the statement, and got the same number (different from theirs). Talked to their customer service several times - they couldn't explain it, nor did they bother checking my calculations or showing how they got their numbers. Got the CFPB involved - same result, they couldn't explain the discrepancy and didn't bother running the calculations by hand. Got their local regulator involved - same result. I eventually gave up, and only keep the card around as an emergency backup.
Copied directly from the statement:
"To calculate interest, we first calculate a daily balance for each Balance Subject to Interest Rate. We start with the balance, for that Balance Subject to Interest Rate, as of the end of the previous day. We add any interest calculated on the previous day’s balance. (This means interest is compounded daily)." (Emphasis added)
What they claim (over the phone, if you ask) is the calculation: calculate the average daily balance (without explaining how), then multiply by [APR]/365*[days in month]. In other words, monthly compounding.
The REAL calculation: never figured it out; the difference is somewhere in how they vs. I calculate the average daily balance. Still monthly compounding.
If you check the contracts and rates recently, many contracts have now gone to PAYE, and many have also dropped the rates by up 40%. Some I have seen have even dopped a £500/day rate to £240/day AND put it inside IR35 with none of the benefits of being perm'. I'm currently looking for my next contract and am a bit shell-shocked at how bad the market has gone in the past few months. I might just retire to go and work in a charity instead if this keeps up!
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