more crackdowns on contractors expected

jonneymendoza · 17 Nov 2015 at 17:22

jimjamuk said:
CAPEX are almost one off costs that are accepted and signed off to get something delivered so you cant just say offer the same role as a permie as that costs is ongoing when a projects finishes and you can imagine the outcry if companies just fired and hired people on a whim

This is exactly what will happen if this goes ahead..

Hades · 17 Nov 2015 at 17:55

jonneymendoza said:
This is exactly what will happen if this goes ahead..

Yup. Hire for a year and then fire before the employee gets any rights.

jonneymendoza · 17 Nov 2015 at 18:06

Hades said:
Yup. Hire for a year and then fire before the employee gets any rights.

yup. affects everyone on a bad way

CapitalOne · 17 Nov 2015 at 18:16

jonneymendoza said:
yea i was about to say this too.

to expect perms to work beyond there working hours is ridiculous and taking the ****.

As a manager you should be more organised with your projects or pay the money for perms to work after hours

I think you missed my reply to this. Everyone in the firm is expected to work the hours it takes to get the job done, myself included. Its not abnormal in my industry at all and opting out of the working time directive is expected. I guess in return we get a discretionary bonus based on our success.

Edit: and if you are suggesting overtime, not a chance!

Personally if it's silly extra days overtime I give informal TOIL, but I dont have to.

On your last point, it's rarely *my* planning that causes these problems, natch.

jonneymendoza · 17 Nov 2015 at 18:18

CapitalOne said:
I think you missed my reply to this. Everyone in the firm is expected to work the hours it takes to get the job done, myself included. Its not abnormal in my industry at all and opting out of the working time directive is expected. I guess in return we get a discretionary bonus based on our success.

Personally if it's silly extra days overtime I give informal TOIL, but I dont have to.

ahh ok i did miss it.

V F · 17 Nov 2015 at 18:28

jonneymendoza said:
This is exactly what will happen if this goes ahead..

One of the audience on Question Time last week mentioned this. Talking about how workers rights will soon be gone.

Bear · 17 Nov 2015 at 18:53

dowie said:
no, if you work for short periods at different places then you can carry on as a contractor

if you're staying at the same place for a prolonged period then you should be an employee

Rubbish. No you shouldn't as there is no reason to make a temporary worker into a permanent member of staff.

As I have said, if the reason is to make the contractor pay more tax then fine make them pay more tax, I have no problem with that but leave me alone, my employment status outside of tax is **** all to do with anyone else.

On top of that, as said, it creates uncertainty to permanent employment where you can hire someone for maternity cover on a permanent contract and then fire them even though there was nothing wrong with their performance. The whole idea is ridiculous.

bloodiedathame · 17 Nov 2015 at 19:00

Bear said:
Rubbish. No you shouldn't as there is no reason to make a temporary worker into a permanent member of staff.

As I have said, if the reason is to make the contractor pay more tax then fine make them pay more tax, I have no problem with that but leave me alone, my employment status outside of tax is **** all to do with anyone else.

On top of that, as said, it creates uncertainty to permanent employment where you can hire someone for maternity cover on a permanent contract and then fire them even though there was nothing wrong with their performance. The whole idea is ridiculous.

Define what you think makes temporary. 2 months? 6 months? 1 year? 2 years?

Jokester · 17 Nov 2015 at 19:01

bloodiedathame said:
Define what you think makes temporary. 2 months? 6 months? 1 year? 2 years?

An end date.

bloodiedathame · 17 Nov 2015 at 19:02

Jokester said:
An end date.

Ok so at the end date, the employer wants to renew the contract. What then?

Jokester · 17 Nov 2015 at 19:03

bloodiedathame said:
Ok so at the end date, the employer wants to renew the contract. What then?

Happy customers are repeat customers.

bloodiedathame · 17 Nov 2015 at 19:07

Now I know why you are "Jokester".

Kemik · 17 Nov 2015 at 19:11

At the minute, contractors are looking forward to:
- Removal of travel and subsistence expenses. Good in my opinion as it will create a level playing field. If you can charge the travel to the client then that should be deductible but that would need to be a clearly identifiable expense via an invoice. This would cover any random flights or expensive travel.

- Forcing companies to bring contractors onto PAYE once they been employed for [x] years. This is a rumour for the Autumn statement. Possible.

- Dividend tax changes. Not a massive impact but does remove some advantage.

Jokester · 17 Nov 2015 at 19:13

bloodiedathame said:
Now I know why you are "Jokester".

Well, big engineering contractors can get repeat contracts from clients that maintain a working relationship spanning decades. There's nothing unusual in that regard so it's no different to a small contractor doing the same thing.

As bear mentions above if the government believes that not enough tax is being paid, change the tax rates. It's that simple.

Anything else is arbitrarily targeting small and big business with additional red tape, costs and removing flexibility in the labour market.

dowie · 17 Nov 2015 at 19:16

Bear said:
Rubbish. No you shouldn't as there is no reason to make a temporary worker into a permanent member of staff.

erm yes there is - the proposed legislation aka the topic of the thread and what I was referring to in that post if you read it in the context of the post it was quoting

bloodiedathame · 17 Nov 2015 at 19:20

I hear you.

I think that as a contractor, big or small, there is inherent risk that balances well with what is possible to claim for and the rate of corporation tax (if you are LTD).

If it were corporation tax that was to be increased, it would be a very unpopular move. Made even worse for the Governments whose 'chums' it would negatively impact. I'd be for corporation tax to be raised across the board.

So chances are it won't be that.

grumpysculler · 17 Nov 2015 at 19:25

We have a fair number of contractors, who work through umbrellas. that's the only way we accept them and it must be one of our agreed umbrellas - many have small ltd companies too.

Some have been here for 3-5 years on renewable contracts that are usually 6 months at a time. The primary reason we use contractors is to keep flexibility in our headcount. That never seems to change much when the tax rules change and I imagine that if they change again then these guys will still contract. A number of them like the flexibility, some do it to avoid moonlighting and IP issues they would have if they were a perm.

I imagine there will be some groans if their tax goes up but it won't change much about our arrangement with them. This setup works for everyone and tax is a bit of a side issue.

If we are forced to take them on as perms, they'll get the boot instead which will effectively reduce our headcount and make life more difficult for the rest of us. To put it in perspective, we are talking ~40 contractors on a site of 2000 people so 2% of the workforce that we can easily cut if work starts to drop. In the past, we have had fewer contractors and had periodic rounds of redundancy.

dowie · 17 Nov 2015 at 19:26

bloodiedathame said:
If it were corporation tax that was to be increased, it would be a very unpopular move. Made even worse for the Governments whose 'chums' it would negatively impact. I'd be for corporation tax to be raised across the board.

well of course they're not going to increase corporation tax - that would hit legitimate companies/entrepreneurs

the target here is people setting up companies to just employ themselves and dodge tax when in reality they're essentially employees - pretty much most banks in the city have people like this, the BBC does too - presenters etc.. being paid through their own personal companies

Bear · 17 Nov 2015 at 19:28

bloodiedathame said:
Define what you think makes temporary. 2 months? 6 months? 1 year? 2 years?

Currently you can claim expenses for two years before its deemed a permanent place of work, so that could be a logical starting point. Even a year would be pretty reasonable as it wouldn't effect people working as maternity cover.

Personally I would be happy with Joksters suggestion. So long as you are contracted to a project that has and end date for your set of deliverables be it a bit part of a project or the whole thing and your employment is to be terminated upon completion that would be temporary.

In the real world I think a year is the best compromise.

bloodiedathame · 17 Nov 2015 at 19:35

dowie said:
well of course they're not going to increase corporation tax - that would hit legitimate companies/entrepreneurs

the target here is people setting up companies to just employ themselves and dodge tax when in reality they're essentially employees - pretty much most banks in the city have people like this, the BBC does too - presenters etc.. being paid through their own personal companies

Individuals set up companies for a variety of reasons. The main one that I've come across is because an employer who wants their services won't take them on if they don't go Ltd or go through a payroll company.

My point being that no everyone sets up a Ltd company just to avoid tax, some people have little/no choice!