Contractors: IR35 & general discussion

[Blown2CV]

Countdown said:

blueg33 said:

Gazzab said:

p1stonhead said:

This sounds very much not a contractor and would get caught by IR35?

I’m no expert though. But I thought managerial roles were a lot more tricky to claim as a contractor?

Depends.
Is the worker responsible for any of these duties for the end client? - Hiring workers
- Dismissing workers
- Delivering appraisals
- Deciding how much to pay someone
If not then it shouldn’t be an issue managing people (tasks).

I don’t do these things. I advise the board and manage a factory but the things on that list are not in my remit.

My NED work in another organisation is PAYE.

Edited by blueg33 on Saturday 29th June 15:59

Tbh I don't think you need to worry. the onus is on the Client to ensure the assessment is correct. They're the ones liable for the fines and underpaid tax. (assuming they don't come under the small company exemption)

how does it work when there is a clause in the contract such that the client can pass on certain costs as they see fit... i feel sure they would not be adhering to HMRC rules to pass on cost of these fines and underpaid tax, but could they swing it somehow?

[Countdown]

Blown2CV said:

how does it work when there is a clause in the contract such that the client can pass on certain costs as they see fit... i feel sure they would not be adhering to HMRC rules to pass on cost of these fines and underpaid tax, but could they swing it somehow?

That would be a contractual issue between the Client and the Contractor. AIUI HMRC go after the Client. I suppose the Client can try to go after the Contractor to recover their losses but I can't see why the Contractor wouldn't say "Tough luck! You should have done your own due diligence".

ETA My guess is that's why some end-clients have been overly cautious when doing IR35 assessments.

[Deep Thought]

Blown2CV said:

Deep Thought said:

Ynox said:

Debating jumping on from my current (permie) gig.

Got a fair few quid in the bank and nearly 20 years experience slinging software. Always been a permie. Thought maybe it's time to go contract (finally fed up of corporate crap) and that maybe the market had improved a bit - last few pages has convinced me otherwise (although my current permie co is still doing outside IR35 and good rates so there are some places out there).

Good luck all.

If you're waiting for the "right" time to go contracting, you'll never go contracting.

Do your own research RE: roles and availability. There can be ebb and flow within the market across different skill sets.

You may well be able to jump from your perm role straight in to a contract role with a small amount of luck.

A work colleague of mine has been a permie for several years. He was enticed back in to perm work with promises of career progression and promotion, none of which materialised. He handed in his notice two weeks ago and starts his contract role in two weeks time (at £1500 a day).

what sort of role is he doing?

From memory - and i must put him over it - hes heading up the client / user acceptance team for a global system being built for some global corporation. I want to say a pharma company but i cant be sure.

The rate was negotiated at that rate as they want him on site three days a week which requires a train journey commute and stay overs. For whatever reason they wanted it put in to his rate rather than expensible.

I think hes proposed putting a big amount in to his pension monthly (and back dating that?).

[eps]

Pit Pony said:

Deep Thought said:

Ynox said:

Debating jumping on from my current (permie) gig.

Got a fair few quid in the bank and nearly 20 years experience slinging software. Always been a permie. Thought maybe it's time to go contract (finally fed up of corporate crap) and that maybe the market had improved a bit - last few pages has convinced me otherwise (although my current permie co is still doing outside IR35 and good rates so there are some places out there).

Good luck all.

If you're waiting for the "right" time to go contracting, you'll never go contracting.

Do your own research RE: roles and availability. There can be ebb and flow within the market across different skill sets.

You may well be able to jump from your perm role straight in to a contract role with a small amount of luck.

A work colleague of mine has been a permie for several years. He was enticed back in to perm work with promises of career progression and promotion, none of which materialised. He handed in his notice two weeks ago and starts his contract role in two weeks time (at £1500 a day).

All the contractors I've met started doing it after something pushed them out of a permie job including

Redundancy (most of them)
Being asked to leave because he'd been having an affair with a junior member of his team and she was making allegations to HR, when he tried to end it.
Throwing dummy out of pram when someone senior demanded something unethical (although not illegal) was done by him.
Being the victim of workplace bullying, and finding HR closed rank.
After a change of senior management. Technically redundancy, but more targeted with a big payoff.
After leaving the armed forces after 30 years and finding retirement wasn't all that challenging.
After retiring, and being re-engage as a consultant (big IR35 flag that one)
One group, that I despised. Those that were contracting outside IR35 via an umbrellor, on a temp to perm basis. That particular company recruited people desperate for a full time job on an agency footing, for 6 to 12 months whilst they sorted out head office approval for the headcount increase. The hiring manager asked me weekly if I'd take a permie role. Er no.

I've probably met 60 other contractors and other than that last group, none have resigned from a job to go contracting.

True, although since contracting for a long time I've met a lot of permies who talked about going contracting but never did.

The role I'm moving into is after contracting there for a few months and I'll be retiring reporting to the MD who is looking to step back from things. Plus the company is becoming employee owned and some potential bonuses which could be quite lucrative. All down to me though, plus those who report into me. Will see... Could always go back to contracting if it doesn't work out. It feels like a decent opportunity with lots to offer. Time will tell

[Blown2CV]

a lot of permies moan about contractors being so well paid but then wouldn't actually do it themselves because they aren't willing to accept the volatile nature of temporary employment. I don't respect that position. If you won't do it then don't complain that someone else will.

[Blown2CV]

Deep Thought said:

Blown2CV said:

Deep Thought said:

Ynox said:

Debating jumping on from my current (permie) gig.

Got a fair few quid in the bank and nearly 20 years experience slinging software. Always been a permie. Thought maybe it's time to go contract (finally fed up of corporate crap) and that maybe the market had improved a bit - last few pages has convinced me otherwise (although my current permie co is still doing outside IR35 and good rates so there are some places out there).

Good luck all.

If you're waiting for the "right" time to go contracting, you'll never go contracting.

Do your own research RE: roles and availability. There can be ebb and flow within the market across different skill sets.

You may well be able to jump from your perm role straight in to a contract role with a small amount of luck.

A work colleague of mine has been a permie for several years. He was enticed back in to perm work with promises of career progression and promotion, none of which materialised. He handed in his notice two weeks ago and starts his contract role in two weeks time (at £1500 a day).

what sort of role is he doing?

From memory - and i must put him over it - hes heading up the client / user acceptance team for a global system being built for some global corporation. I want to say a pharma company but i cant be sure.

The rate was negotiated at that rate as they want him on site three days a week which requires a train journey commute and stay overs. For whatever reason they wanted it put in to his rate rather than expensible.

I think hes proposed putting a big amount in to his pension monthly (and back dating that?).

only reason i ask is that contractor roles and rates seem to be in a complete slump in some sectors/role families.

[Deep Thought]

Blown2CV said:

only reason i ask is that contractor roles and rates seem to be in a complete slump in some sectors/role families.

Yes it seems a eyebrow raisingly high rate compared to current market trends.

[p1stonhead]

Blown2CV said:

a lot of permies moan about contractors being so well paid but then wouldn't actually do it themselves because they aren't willing to accept the volatile nature of temporary employment. I don't respect that position. If you won't do it then don't complain that someone else will.

This.

Some of my usual clients cancelled £80k of work on me in the coming year. Had mentally banked it but it’s just not happening now.

Onwards and upwards.

[Gazzab]

Blown2CV said:

a lot of permies moan about contractors being so well paid but then wouldn't actually do it themselves because they aren't willing to accept the volatile nature of temporary employment. I don't respect that position. If you won't do it then don't complain that someone else will.

I see less of that these days. The delta is smaller than it was. In the early days it was 3 x a perm salary I guess. Then it was twice. Now it could be more or it could be less depending on rate, availability of work, inside v outside etc it’s pretty marginal and perms are less likely to jump into the unknown. Of course this is based on my experience in FS and so isn’t representative of other peoples perspective.
There are still those workers whether perm or contract who will take a negative view on anything, anyone etc.

[Gad-Westy]

I'm one of those (possibly rare) types who quit a permanent role to go contracting. In fact I quit with no contract lined up. Seems cavalier in many ways but one of the toughest things about that transition is the now typical 3 month+ notice period that so many employees are signed up to. I'm still yet to come across a contract opportunity that is prepared to wait that long. I guess it could happen if you were exactly the right person for a longer term project but seems to me that would be rare.

I left permanent work for all the same reasons that would have me massively resisting going back. Involvement in day to day matters that I have no interest in. KPI's, reviews, stagnant working practices etc. I'm an engineer and the only thing I've ever been interested in is engineering. But naturally career progression can have you drifting further and further into management, politics, team development etc until one day you realise you've completely lost sight of why you chose your career in the first place.

Naturally I'd rather be paid more to contract, particular given the heightened risk of doing so but I think in reality I'd still be a contractor if I earned less than a permanent salary. It's all about the focussed engineering objectives for me and being able to tune out (nearly) all of the noise that normally surrounds that kind of role.

I work closely with many permanent engineers and they all remind me of why I moved away from that in the first place. Many do talk about moving into contracting but actually I can't think of anyone that has. It's not an easy move to make unless you have a little financial security (not that common within mechanical design) or you're prepared to take a bit of a risk.

[Deep Thought]

Gazzab said:

Blown2CV said:

a lot of permies moan about contractors being so well paid but then wouldn't actually do it themselves because they aren't willing to accept the volatile nature of temporary employment. I don't respect that position. If you won't do it then don't complain that someone else will.

I see less of that these days. The delta is smaller than it was. In the early days it was 3 x a perm salary I guess. Then it was twice. Now it could be more or it could be less depending on rate, availability of work, inside v outside etc it’s pretty marginal and perms are less likely to jump into the unknown. Of course this is based on my experience in FS and so isn’t representative of other peoples perspective.
There are still those workers whether perm or contract who will take a negative view on anything, anyone etc.

It definitely has changed - and varies across roles too.

In my field its definitely still easily x2 or maybe x2.5 for contracting versus perm. In fact that would be based on getting a fully remote role in the south of england.

If i was looking for a role here in NI, it would easily be a x3 of a difference compared to what i'm doing now which is contracting in to a company on the mainland.

Theres clearly still a notable financial delta for most if not all contractors (on a role like for like basis) - otherwise why take the risk?

Edited by Deep Thought on Monday 1st July 09:49

[blueg33]

Deep Thought said:

Gazzab said:

Blown2CV said:

a lot of permies moan about contractors being so well paid but then wouldn't actually do it themselves because they aren't willing to accept the volatile nature of temporary employment. I don't respect that position. If you won't do it then don't complain that someone else will.

I see less of that these days. The delta is smaller than it was. In the early days it was 3 x a perm salary I guess. Then it was twice. Now it could be more or it could be less depending on rate, availability of work, inside v outside etc it’s pretty marginal and perms are less likely to jump into the unknown. Of course this is based on my experience in FS and so isn’t representative of other peoples perspective.
There are still those workers whether perm or contract who will take a negative view on anything, anyone etc.

It definitely has changed - and varies across roles too.

In my field its definitely still easily x2 or maybe x2.5 for contracting versus perm. In fact that would be based on getting a fully remote role in the south of england.

If i was looking for a role here in NI, it would easily be a x3 of a difference compared to what i'm doing now which is contracting in to a company on the mainland.

Theres clearly still a notable financial delta for most if not all contractors (on a role like for like basis) - otherwise why take the risk?

Edited by Deep Thought on Monday 1st July 09:49

In my sector (housebuilding and social housing) I can just about get away with matching my permanent salary and benefits (excluding bonus) broken down pro rata by day. But many clients wont pay that much, and multiples of permanent salary are highly unlikely, although I did see one at £1800 per day 5 days a week for 12 months, I got down to the last 2 but was beaten by someone who lived more locally

[Blown2CV]

Gad-Westy said:

I'm one of those (possibly rare) types who quit a permanent role to go contracting. In fact I quit with no contract lined up. Seems cavalier in many ways but one of the toughest things about that transition is the now typical 3 month+ notice period that so many employees are signed up to. I'm still yet to come across a contract opportunity that is prepared to wait that long. I guess it could happen if you were exactly the right person for a longer term project but seems to me that would be rare.

I left permanent work for all the same reasons that would have me massively resisting going back. Involvement in day to day matters that I have no interest in. KPI's, reviews, stagnant working practices etc. I'm an engineer and the only thing I've ever been interested in is engineering. But naturally career progression can have you drifting further and further into management, politics, team development etc until one day you realise you've completely lost sight of why you chose your career in the first place.

Naturally I'd rather be paid more to contract, particular given the heightened risk of doing so but I think in reality I'd still be a contractor if I earned less than a permanent salary. It's all about the focussed engineering objectives for me and being able to tune out (nearly) all of the noise that normally surrounds that kind of role.

I work closely with many permanent engineers and they all remind me of why I moved away from that in the first place. Many do talk about moving into contracting but actually I can't think of anyone that has. It's not an easy move to make unless you have a little financial security (not that common within mechanical design) or you're prepared to take a bit of a risk.

you have to wait until you are no longer employed before you even bother looking. You will be disregarded if you apply for contract roles but aren't immediately available. Certainly for the moment anyway.

[Gazzab]

Deep Thought said:

Gazzab said:

Blown2CV said:

a lot of permies moan about contractors being so well paid but then wouldn't actually do it themselves because they aren't willing to accept the volatile nature of temporary employment. I don't respect that position. If you won't do it then don't complain that someone else will.

I see less of that these days. The delta is smaller than it was. In the early days it was 3 x a perm salary I guess. Then it was twice. Now it could be more or it could be less depending on rate, availability of work, inside v outside etc it’s pretty marginal and perms are less likely to jump into the unknown. Of course this is based on my experience in FS and so isn’t representative of other peoples perspective.
There are still those workers whether perm or contract who will take a negative view on anything, anyone etc.

It definitely has changed - and varies across roles too.

In my field its definitely still easily x2 or maybe x2.5 for contracting versus perm. In fact that would be based on getting a fully remote role in the south of england.

If i was looking for a role here in NI, it would easily be a x3 of a difference compared to what i'm doing now which is contracting in to a company on the mainland.

Theres clearly still a notable financial delta for most if not all contractors (on a role like for like basis) - otherwise why take the risk?

Edited by Deep Thought on Monday 1st July 09:49

Interesting. I’m in FS. I guess a decent PM can get over £100k plus 25% bonus plus pension, holidays and sick leave etc. So that’s knocking on what about £150k?. A day rate I guess varies between £500 and £800 a day and mostly inside ir35. So you need to be at the top end of that on an inside deal to match the perm package.

[Blown2CV]

the higher the rate the fewer number of billable days in an average year I'd say too. More likely to get given notice, harder to find a new gig at that sort of rate, etc.

[Deep Thought]

Gazzab said:

Deep Thought said:

Gazzab said:

Blown2CV said:

a lot of permies moan about contractors being so well paid but then wouldn't actually do it themselves because they aren't willing to accept the volatile nature of temporary employment. I don't respect that position. If you won't do it then don't complain that someone else will.

I see less of that these days. The delta is smaller than it was. In the early days it was 3 x a perm salary I guess. Then it was twice. Now it could be more or it could be less depending on rate, availability of work, inside v outside etc it’s pretty marginal and perms are less likely to jump into the unknown. Of course this is based on my experience in FS and so isn’t representative of other peoples perspective.
There are still those workers whether perm or contract who will take a negative view on anything, anyone etc.

It definitely has changed - and varies across roles too.

In my field its definitely still easily x2 or maybe x2.5 for contracting versus perm. In fact that would be based on getting a fully remote role in the south of england.

If i was looking for a role here in NI, it would easily be a x3 of a difference compared to what i'm doing now which is contracting in to a company on the mainland.

Theres clearly still a notable financial delta for most if not all contractors (on a role like for like basis) - otherwise why take the risk?

Edited by Deep Thought on Monday 1st July 09:49

Interesting. I’m in FS. I guess a decent PM can get over £100k plus 25% bonus plus pension, holidays and sick leave etc. So that’s knocking on what about £150k?. A day rate I guess varies between £500 and £800 a day and mostly inside ir35. So you need to be at the top end of that on an inside deal to match the perm package.

Yes i can see how that wouldnt work so well if someone can get that in perm work.

I'm not a PM - i'm in the Service Management side of managing large ITSM systems.

Pays v well in contracting, not brilliantly for perm.

I tend to be among the first to start on a project, but last to be offboarded. Last project there was me and the PM then it rose to about 20 of us. This time i was among the first 7 started, ramped to about 50, back now to about 20. I'll likely be in the last 5 to be offboarded. I'm here to the end of the year, having been here since Nov 22.

[Deep Thought]

Blown2CV said:

the higher the rate the fewer number of billable days in an average year I'd say too. More likely to get given notice, harder to find a new gig at that sort of rate, etc.

Agreed.

That £1500 a day contract i quoted - definitely an exception IME. He wont get that again and he knows it. He's planning on pumping as much as he can into his pension - make hay while the sun shines and all that.

Our previous Systems Architect for this project would like to think hes up there on that sort of day rate - but i know hes been on the bench for quite a while now (many months) whilst he awaits a company who are willing to pay that.

[Blown2CV]

he's going to be waiting a long time in this market, and maybe ever. Unless he's very specialist in a high paying domain, he'd be looking at interim global architecture director or something for that kind of rate.

[Deep Thought]

Blown2CV said:

he's going to be waiting a long time in this market, and maybe ever. Unless he's very specialist in a high paying domain, he'd be looking at interim global architecture director or something for that kind of rate.

Yes, thats the level he would be at. Global systems architect. He would aim for big green field projects for global companies. Big background in finance, media etc.

Hes exceptional but companies taking on people at that day rate are rare.

[98elise]

Blown2CV said:

a lot of permies moan about contractors being so well paid but then wouldn't actually do it themselves because they aren't willing to accept the volatile nature of temporary employment. I don't respect that position. If you won't do it then don't complain that someone else will.

Agreed. On every contract multiple people have commented about the rates. My response is to tell them to go for it. I used to have an email template to send with the steps to contracting and links (where to job search, accounting, incorporating, registration etc).

Most would immediately give excuses as to why they couldn't do it. Occasionally one would make the move though.