Will the proposed IR35 changes mean perms moving back to contracts?

T199er

I've been a contractor for 5 months (inside IR35).  The company I am with are trying to get me to go perm and the offer is fairly attractive but I have (had) decided to stick to contracting.

I'm worried that the proposed IR35 changes may entice a lot of people back into contracting, making the competition more fierce and rates to reduce, but from what I have read the only thing that is changing is is the liability shifts back onto the contractor rather than the company.  The role I currently have couldn't be justified as outside IR35 so I'm a bit lost on what the implications really are.   Can any of you help me make more sense of it please?

lisyloo

What changes are you referring to.
IR35 changed in April 2021 I believe.
do you have a link to the changes you are referring to?

Grumpy_chap

lisyloo said:

What changes are you referring to.
IR35 changed in April 2021 I believe.
do you have a link to the changes you are referring to?

IR35 was reverted back in the Chancellor's statement last week.

Lots of contractors no doubt planning to revert to Ltd Co from Umbrella 

unforeseen

The onus on deciding in or out is going back to the contractor but you must be able to convince HMRC

https://www.ir35shield.co.uk/Articles/Article/ir35-changes-again-how-does-it-affect-you?utm_source=ppc&utm_campaign=IR35changes&gclid=Cj0KCQjwyt-ZBhCNARIsAKH1174_0wzZZNWS2aifKryW2FT1BNJYU5mpqlK4ov23YPsx1dVoxs7mcu4aArTQEALw_wcB

lisyloo

Grumpy_chap said:

lisyloo said:

What changes are you referring to.
IR35 changed in April 2021 I believe.
do you have a link to the changes you are referring to?

IR35 was reverted back in the Chancellor's statement last week.

Lots of contractors no doubt planning to revert to Ltd Co from Umbrella 

Thanks I wasn’t aware of this.
if a company has deemed a job to be “inside” then isn’t it a risk for any contractor to deem themselves “outside”.
i would imagine companies have documention for their decisions to present to HMRC.
i am aware that some companies were risk averse but isn’t this a risk for individuals in the same role? And now a bigger risk than before because companies have done a documented process and come to a different conclusion to the contractor.

prowla

IR35 was designed by NuLab to stifle enterprise and favour their big business chums over small independents; it's good to see this reset, though it's not a repeal of the entire thing.

T199er

Does anyone have a view if this is a big enough carrot to drive a lot of perms back into contracting?   The recommendation on contractor websites is not to try and convert existing contracts but look for new ones, addressing the issue highlighted above. 

Grumpy_chap

lisyloo said:

if a company has deemed a job to be “inside” then isn’t it a risk for any contractor to deem themselves “outside”.
i would imagine companies have documention for their decisions to present to HMRC.

Yes and no.  
HMRC always said they would stand by  correct CEST assessment. 
Many end Clients, however, ignored that and simply imposed blanket determinations with no sharing of the reasons with Contractors.  Both actions that the HMRC say should not be the case - no blanket determination and Contractor must be given the option to challenge the basis for the decision.

Some end Clients are already starting to weaken the blanket determinations as they start to realise the additional obligations (costs) they assume by an inside-IR35 determination.

I would very much imagine that, come next April, Contractors will simply say the current contract needs to be determined as outside-IR35 or they'll switch to a contract that is.  In fact, from beginning January, I doubt many Contractors will be agreeable to new contracts or extensions that go beyond March and are not assessed as outside-IR35.  There is a lot of work out there and this will be a Contractors-market.

lisyloo

What a waste of everyone’s time, costs and upheaval to keep changing it like this.

Wyndham

It's often one of those things - as a contractor, if you're any good, the company want to make you perm. I've always resisted, I still get more from contracting.

If you've made the decision to go perm, then I suspect you won't rush back to contracting. So no, I don't see that there will suddenly be a glut in the market.

Though, after saying that, even if there is, if you're sure enough of your skills and abilities, then it really doesn't matter what the rest of the world are doing (or not doing!)

T199er

"Though, after saying that, even if there is, if you're sure enough of your skills and abilities, then it really doesn't matter what the rest of the world are doing (or not doing!)"

Thank you.  This is where my head has landed this morning.  Contracting is a level of risk I'm not yet completely confident or comfortable with but I'm getting there.  I know I have back up options if it doesn't work out how I would like.  My current contract is due to end at the end of the year but I think it will get extended by a couple of months.  I may be looking for a new contract just as there is a lull while the people with more experience at contracting are waiting for the gov changes in April before committing to something new so it might work in my favour in the short term.