May the farce be with you
The farce is strong in this one, on this special May 4th day.
So desperate is the UK government to attract IT contractors in the wake of controversial changes to IR35 legislation, it is advertising roles as explicitly outside the tweaks. In capital letters. One job ad for a software licence wrangler at the Ministry of Justice for £600 per day is a case in point. Haybrook IT Resourcing …
When they roll this out to the private sector next year, and unless the private sector can replicate this feat of guaranteeing a contract being outside ir35, then this could actually reverse the trend of people steering clear and actually heading *towards* the public sector.
*shudders*
Its fairly straightforward to put a contract outside of IR35. There just needs to be a clear clause that allows 'substitution'. My current contract is pretty well worded in that regard. Nowhere does it name the individual who will be supplied to fulfill the contract and just talk about supply a competent qualified resource to deliver the contracted work.
I don't have a HR department and am not going to be recruiting anyone except myself to do this work, but the wording of the contract seems to allow me to do that if I so wish. I haven't had it checked for IR35 but I did some contract law at uni and am fairly confident it passes the test.
Mark - You might want to get that reviewed by QDOS or another specialist, the bad news is that a substitution clause alone wont be enough.
In fact ANY clause in the contract not backed up in the day to day working practices are not worth the paper they are written on as under investigation is is the working practices that actually goes into making the determination on whether you are inside or not.
Treasury makes changes to IR35. Contractors flee. Contractors eventually come back at double the previous Price. Contractors pay more taxes then previously (because they are earning far more then before). Treasury Profits!
It's all part of Treasury's plan to show they are bringing in more money then ever before. It doesnt matter that it's coming out of everyone else in government's Budget - Treasury's Balance looks good...
On what grounds are the Ministry of Justice making this claim? What agreement have they reached with HMRC that this is the case?
And what guarantee will they provide that this post will not be retrospectively deemed to be INSIDE IR35 in the future?
Good to see our taxes at work, mind...
Please, please, please, don't say anything about how stupid <local politician x> is unless and until <local politician x> can match or exceed Danny Quayle levels. For those who don't know, Danforth Quayle is the guy who corrected a 10-or-11-year-old, on national television, on the spelling of 'potato'. Except that Danny spelled it 'potatoe'. Danny and his wife once took an official tour of Latin America. Certain people joked that when he came back, Danny was upset 'cause no-one in Latin America spoke Latin... and then had to explain that it was only a joke, as the general public knew how stupid Danny was and took it seriously. Someone once hacked the Wiki entry for 'moron' to show Danny's picture. (Wiki fixed it really, really, REALLY quickly and tries to deny that it ever happened...) Then there were the 'Mars is in the same orbit as the Earth' quotes, and the time that he made it clear that he thought that Murphy Brown was a real person.
See https://en.wikipedia.org/wiki/Dan_Quayle for more Dannyisms. I particularly like the last section:
"Quayle was awarded the 1991 Ig Nobel Prize (a parody of the Nobel Prize) in Education.[49] The Improbable Research web page describes Dan Quayle as a "consumer of time and occupier of space, for demonstrating, better than anyone else, the need for science education."
In pop culture, "Danny Quayle" is mentioned in the Oingo Boingo song "Insanity", from the 1994 album Boingo. The lyrics in question read, "The white folks think they're at the top; ask any proud white male / A million years of evolution, and we get Danny Quayle."
In another pop culture reference, the video game series Civilization ranks a player in terms of historical figures. The highest rank possible is 'Augustus Caesar' and the lowest rank possible is 'Dan Quayle'."
And, remember always... G. W. Bush is smarter than Danny Quayle.
So, no, <local politician x> really isn't all that stupid, now is s/he?
The OUTSIDE claim doesn't even have to be true, all it needs is a cast-iron agreement with the contractor that they will not have to pay, and an erroneous internal box-ticking process approved by the Departmental Dog. By the time HMRC come gunning for blood and the whole thing is discovered to be down to a broken process, the dog will have new masters in the Cabinet Office and can blame the whole thing on their predecessors.
Me? Experience in large Government Departments? My, that was a long time ago!
If there is one body in the country that should be whiter than white with the rules, it's the Government. This strikes me that they're exploiting loopholes in their own legislation to get the staff in place. Which basically implies "do what I say, not what I do".
Hypocritical bastards.
"This strikes me that they're exploiting loopholes in their own legislation to get the staff in place."
Why? All they have to do is write the contracts correctly and ensure that their working practices abide by them. It might mean ignoring what HMRC want them to do but they're realised it's what they need to do.
I am awaiting a contract with a large Govt dept. I've been told (by email) that all new contracts were held up by Cabinet Office as too many depts were deeming their workers to be outside IR35 and that they need to revisit these decisions. I have also been told that depts are complaining as they are losing staff hand over fist and there's a big thing called "Brexit" or something coming along (Whats Brexit?) They are trying to get staff outside of IR35 so that the projects won't stall, and so are fighting back. I was also told that this should become clearer and of April. Mmm... its not May 4th and not heard anything but we can still hope.
Since I assumed I'd be inside IR35, I negotiated a rate commensurate with the expected tax regime. However if there's the slightest chance of being outside, I'll be laughing my way to the significantly reduced mortgage for this year :)
"What on earth do they pay people actually doing difficult dev work?"
Or even the difficult sysadmin job of trying to get the devs to understand that the users do not have and will not get admin permissions. Ever. And that it's reckless for devs to demand 1GbE as a *minimum spec* for a client/server application. I know that Gigabit is relatively trivial these days, but to throw hands up in the air when I say it's only 100Mb in areas?
Anyway, that's my rant about devs and the insinuation that they're the only ones doing a difficult job. Usual caveats that there are also good devs and there are also shit sysadmins, and that when they're together the devs are entitled to hold the cattle prod. I will be the arbitrator of whe is being good and who is shit. All decisions are final. This promotion does not affect your statutory rights. Can I get on with drinking my tea yet?
developers in my area of the civil service who are actual civil servants are lucky if they see a fifth of that
So why not resign and work as a contractor? Without wishing to be rude, it would seem that by your willingness to work for 20% of what others will, you're encouraging them to exploit you.
So why not resign and work as a contractor? Without wishing to be rude, it would seem that by your willingness to work for 20% of what others will, you're encouraging them to exploit you.
Thats something that i suggest to permies all the time when they complain about contractor pay.
very few actually do it, because they that its not as easy as they think it is.
As an example, I started work on a contract back in feb.. two weeks ago i was told the company had almost run out of money and might not be able to pay me... How many permies would accept that as a risk of their work?
As a plus side, i'm sat in bed readin el reg and watching daytime tv... cant complain. :)
At least, as a civil servant, you have holiday pay, sick pay, workplace insurance, a contributory pension scheme and job security. I had none of those things - and for good measure was forced out of the Departmental car park onto a park-and-ride (two grand before tax and an hour a day up the spout just like that). Yet I received only what a daisy-chain of greedy middlemen (Hi, Crapita!) left at the bottom of the pot. I lost a career of ten year's standing with ten days' notice and no chance of applying my deeply specialised knowledge anywhere else: the poor PM (you, for all I know) was blinking back his tears. "That kind of pay" just about tided me over the gap until I could rebuild my life. You should try the other man's grass in a drought before you pass judgement on how green it is.
By the way, I am not against permanent staff doing the stuff we contractors do did. Acceptance of lower pay is as much part of one's principles as a responsible member of society - why you applied for the job in the first place. Hats off to you for that. I'm just saying that we contractors have souls too.
Speaking as someone who has sat on the supply side here, I can tell you now that it's incredibly complicated to manage.
This is not just a case of counting the number of PC's and saying that's 22,013 licenses. The software suppliers make it difficult with obscure means of working out how much to pay. This is basically an attempt to charge as much as possible for the software. So the licenses would go into number of cores, clock cycles, memory, virtual machines, number of possible clients, number of actual clients. You name it, companies would try and work out a method for charging it.
What happens when you run your systems in a redundant mode, good working practise, but do you charge for two live licenses, one hot license and one warm license, does your license pass over from one machine to the other in the event of failure, but then when both are starting up, thats two instances.
What about your test machines, pre-production machines? What license do they have to use?
Licenses can cost tens of millions, and if you could shave off 10% by knowing how to structure your license deal and save a couple of million quid, that seems like a good use of £600/day to me.
Not quite as simple as you thought!
"600 quid a day, for the trivially simple task of managing software licences."
managing licences isnt just keeping track of a few hundred installations on a spreadsheet.. the role will encompass the negotiation for discounts all of the compliance checking etc.
If you're responsible for licence compliance you're f*ck ups could cost the company millions in fines, so you will need a lot if insurance and will need to be compensated accordingly.
Its quite a senior role in any reasonably large company.
That is not exactly an attractive offer. I guess a lot depends on where you live, but I literally would not get out of bed for 600 a day. I could not live on that, could not cover my ass with it, and could not build a secure future on it. That's maybe 65 quid an hour ! if your self employed and your getting 65 an hour for what your doing, do something else. At that rate you may as well give up and go clean car windows, cos they earn more than that in an hour.
When you say "cleaning car windows" surely you mean "code cleanup on car automation software running on Windows."
Do not confuse muggle jobs with what we are talking about here in Techville. What is a pound worth today? US$.80? Anyway, when you stop playing around with desktop machines and get a real job in the data center, you can charge the proper rate. Or developing for a big site, rather than manage a closet with a couple of routers and a PC, that you claim is a "server." If you have actual skills, not just pointing a mouse at a domain controller and announcing "ohh, lala, I'm an admin now." THEN you can place your start salary at £100/hour+, or you should go home. I'm talking about real "senior" admin or developer skills, not some rubber-desk johhny with a mouse and an extra Ethernet cable. If you're still doing that after 5 years, go back to the Starbucks and just make me some coffee, idiot. You failed at IT.
Doing a quick calculation, an employer offering 600 quid a day to a contractor is around the equivalent cost of hiring a permie on about 60k a year.
i.e. Permie would see about 29 quid an hour, the rest going on employers NICs (additional 9k), sick pay (2k), holiday pay (7k), training (4k) pension & bonuses (12k), licencing & support (12k), and overheads (4k). Total of 110k per annum cost of hiring, 183 productive working days a year = 600 quid a day.
So a peasants wage it isn't, I think a fair few of us would get out of bed for 60 grand a year.
As for a car wash - my local has 6 hardworking eastern Europeans charging 6 quid a car, managing about 16 cars an hour, before their costs of rent and consumables. Theoretically, if they could squeeze 37.5 hours into a day then they could make the same 600 quid a day as that contract is offering, but that probably requires them to be washing cars on a train approaching the speed of light in a relativistic frame to their paying customers.
Anonymous Coward for obvious reasons: Was contracting at HMRC, was found to be inside, left the next day (as did 70% of my team, working on a project that has been reported on the reg).
Literally a day later got a call from a recruiter about a contract at the VOA (another HMRC department), also inside but the rate was curiously 30% better.
I suppose some MegaCorp will be awarded the contract to build the service instead, and it will cost an order of magnitude more, and be late, and be shit. The money paid will be transferred to some body shop in India, or go straight into the (offshore) pockets of MegaCorp's shareholders, and HMRC won't see a dime! Good to see my tax money hard at work.
Even better, all the contractor's companies each paid more in corporation tax last year than one of the biggest bod providers to HMRC. What a time to be alive.
I was a contractor for HMRC for its digital programme and I left because IR35. The project I was working was given to Capgemini because many contractors in my team left. I expect now Capgemini to charge HMRC enormous fees compared to contractor fees. It's a loose for everyone and obviously bad use of tax payer money.
It may seem contractors are earning more (which is true in general), but there is always a risk element of not finding contract or finding out that your project budget wasn't approved. I worked as perm in the past and I can definitely tell contracting is different.
I was a contractor for many years, then went perm when the offer included a golden hello to cover outstanding tax liability.
I had both an IR35 and a section S660 review from HMRC and got through both, but it was a tough set of interviews - essential to have an accountant who really and truly understands these things and preps you well.
Now I hire contractors, but in my sector, the move is towards permies. Realistically, there is not a whole world of difference in job security between permies and contractors - employers have screwed down notice periods for both so can shed either pretty easily (so long as you've been there less than 2 years).
The main reason in my sector (finance) for using contractors is they appear differently on the balance sheet - permies are "fixed overheads" and contractor costs are "expenses" - this is really important for public companies that need to be seen to be managing overheads, so hiding the cost of staff in expenses is a good call, i.e. it's an accounting game.
" I expect now Capgemini to charge HMRC enormous fees compared to contractor fees. It's a loose for everyone and obviously bad use of tax payer money."
Annon for similar reason...
Cap hire contractors to work on the hmrc contracts... all outside ir35.. you could probably go back to them squeeze more money and do the same work.
The 'gig economy' workers are usually not far above benefits level, deem them inside IR35 and you open up a whole can of tax credit worms and the potential that they will stop working and claim many other benefits so a net tax loss overall.
A skilled IT contracter making £600+ per day is a soft target and is unlikely to fall back on the state in the same way. They are also a lot easier to find and manage as they typically do submit tax returns etc.
Add in that the many and varied gig economy companies have tongues firmly buried up politicians and have open doors to post political careers for them and its little wonder they are not heavily targetted.
Most people in the "gig economy" are not working through limited companies, they are Self Employed so are already subject to "normal" tax rates - basically they dont need to be deemed inside IR35 because they should already be declaring their income and paying the same tax as if they were permies.
The problem with all this, is that HMRC continually 'refines' the small print that explains what IR35 actually means - i.e. they make it up as they go along to suit punishing whatever soft target the government is accusing this week of bringing this fine country to its knees and destroying the NHS and house prices in your area by not paying their fair share.
IT contractors are deemed an easy target. No-one who reads the Daily Mail really understands what an IT contractor actually does, or the expenses involved, or the additional risk carried, but they sure as hell understand £500 + VAT per day. And when your Daily Mail reader finds out this can be earned within an entirely legal, tax efficient structure - well that's when the frothing starts. And frothing means votes.
So I wouldn't trust Haybrook as far as I can spit, and I certainly don't trust HMRC to play fair here.