Testimonials

The taxman says there has been no negative reaction to letters he sent to engagers warning about the off-payroll rules making them liable for IR35 from April 6th.

In an unusual disclosure, HMRC used the latest IR35 Forum meeting (for which minutes are available) to say an initial batch of 2,000 letters to “raise awareness” had been well-received.

Referring also to IR35 factsheets offering “further assistance,” the minutes say HMRC “reassured members there had not been a negative reaction to receiving these letters.”

Yet there was a negative reaction last night. “HMRC has finally published the forum minutes, but not announced them anywhere,” an adviser said. “No wonder -- they’re six months late.”

'Why was it necessary to wait?'

ContractorUK understands that the delay is down to errors in the original draft of the minutes which HMRC initially failed to correct but, upon members’ insistence, eventually did.

It is not the first time HMRC has had to reword the forum’s minutes because of its’ industry members’ insistence that what officials recorded took place, or was said, didn’t, or wasn’t.

But delays by the taxman, or just the sheer amount of time it can take him to act, were flagged up at this August 2019 meeting, the minutes from which went live on Wednesday.

In fact, at the summer face-to-face, the “members asked [HMRC] why it was necessary to wait until November” for educational letters on IR35 reform to be sent to “agencies and recruiters.”

'Resources by November'

According to the minutes, HMRC’s reply was that only “by November,” would “necessary resources” be in place to deal with enquiries that the agency-targeted letters would generate.

But to this, the reaction from forum industry members like IPSE and FCSA was such that HMRC agreed to “consider” bringing forward the November exercise, the minutes add.

If HMRC did make such a consideration, it did not act on it -- not before November, in November, or indeed any time since, according to one contractor jobs agency.

'Not heard a dicky-bird from HMRC'

“We’ve not heard a dicky-bird out of the Revenue. We didn’t have any communication from HMRC in November or any time prior,” said Bowers Partnership.

The agency’s founder Natalie Bowers added: “In fact, we haven’t heard from HMRC at all. We’ve been left to self-educate and to make arrangements on a best-guess basis.”

“Given that we have no authority over the SDS, and full liability post April 6th 2020, you would have thought that we would have been at least on the ‘CC’ list for any emailed ‘Education and Support’ package from HMRC.”

'They didn't say anything we didn't already know'

However, another agency was on that list and was contacted by the Revenue before November 2019.

Speaking on the condition of anonymity, the agency said. "Yes we were contacted by HMRC before last November.

"We met with them [too], but they didn’t have anything to say that we didn’t already know."

More successfully, an HMRC letter entitled “Off-Payroll Working Rules due to be implemented from April 2020,” was received last month by a company on the radar of HMRC’s ‘Wealthy/Mid-sized business’ unit.

'Icing on the cake'

But according to the recipient’s tax advisory HQ35 Ltd, the company isn’t even affected by the April 2020 framework -- not even remotely.

“HMRC’s letters are supposed to be going to businesses prospectively caught by the new rules, but this particular firm satisfies all of the ‘small company’ criteria, making it exempt,” HQ35 says.

The advisory added: “And the icing on this particular cake? The firm doesn’t even have any engagements with PSCs. This really chimes with the overall feeling of huge doubt that this legislation, and HMRC as its overseer, is ready, well-prepared and not haphazard.”

With the government fightback against Coronavirus significantly stepping up yesterday, ContractorUK has invited us to outline what we’re doing as a contractor recruitment agency; what we’re doing to help keep contractors safe and what end-users are doing too, writes Natalie Bowers, managing director of Bowers Partnership.

The new government measures to tackle the pandemic

Firstly though, let’s look at those new measures from the government to reflect the COVID-19 outbreak moving from ‘contain’ to ‘delay’. The measures are key because each affects contractors. In the prime minister Boris Johnson’s own words, contractors and all other individuals should now:

• “Stop non-essential contact” with others.
• “Stop unnecessary travel.”
• “Start working from home” where you can.
• Avoid social venues, like clubs, pubs and mass gatherings.

All four measures are recommendations at this stage; and although you’d be silly to ignore them, the government says it has the powers to mandate them if people don’t want to be sensible. Or in the PM’s words, don’t want to be part of a “mature democracy.”

In reaction to the government’s latest statement (which also confirms 14-day isolation for all households containing COVID-19 symptoms), some of the contractor sector’s leading advisories on tax, IR35 and HMRC disputes say that they are taking the decision to close. At least for a period of seven days.

What irked contractors about private sector IR35 reform, is now seeing them good

At this stage, our staffing business is open. And that’s partly because our niche financial sector clients remain open and are continuing to do business with us and contractors.

Ironically, the small appetite for risk that these financial services companies displayed with IR35 reform, which often went against contractors, is now benefitting contractors -- because of the end-users’ same propensity to avoid risk.

In fact, our City-based clientele has seemed to react to Coronavirus faster than the government itself. And right now, contractors’ clients we know in London (but also in Edinburgh) are well ahead of the curve in terms of BCP (Business Continuity Planning).

What’s arguably even more reassuring at times like these is that we’re not seeing financial services organisations differentiate between contractor and perm workforces when it comes to COVID-19 protection measures. That’s partly due to the health issues at stake affecting us all. So refreshingly -- and for once, IR35 is paling into insignificance.

Protecting contractors from the virus in the workplace

On the ground (at clients’ sites) we’re seeing contractors be elevated into the driving seat. By this, we mean contractors are being given lots of different options to choose from to help keep Coronavirus at bay. Three measures in particular are being outlined to contractors:

• Enforced Social Distancing.
• Rota Working – i.e. Team A in, Team B out.
• Working from Home.

To most contractors, the third measure is probably ‘business as usual.’ Indeed, the largest firms we provide contractors to already had mobile collaboration systems embedded into their operations well before COVID-19 came along. So ‘Working from Home’ is nothing new and among the largest clients, or the most pragmatic, ‘WfH’ policies are well-established, even mandated. In our experience, most contractors are receptive to these remote working policies.

That said, there is the odd contractor grumbling that as the UK could currently be some four months off the peak of this pandemic -- and as there is no vaccine currently in sight for this year, workers (of all types) cannot simply lock themselves away for the foreseeable.

On LinkedIn though, another contractor sounds like she couldn’t disagree more. In particular, she has now accepted her first ever full-time role with a company ‘x’ over company ‘y,’ even though ‘y’ paid ‘z’ more per year. The clincher? Well ‘x’ offered a WfH option -- to both her and her 19 fellow new-starters. Her post goes on to commend ‘x’ for being “on-point with handling an out-of-the-ordinary situation” – Coronavirus.

How our contractor jobs agency is responding to the COVID-19 outbreak

Well, we too hope that we’ve done largely same. As a smaller agency, we’ve found it pretty easy to self-organise and to mandate an extremely strict (some might say ‘obsessive’) regime to combat COVID-19, the symptoms of which are (broadly) a new constant cough and a temperature. Our regime includes:

• Placing ‘Wash your hands’ signs (and other preventative cues for people) everywhere.
• Washing hands thoroughly, regularly, for the minimum recommended 20 seconds.
• Avoiding touching your face, eyes, mouth.
• Blowing into a tissue or using your bent elbow (as WHO recommends), if you sneeze.
• No physical contact, such as no visiting co-workers at their desks.
• Interacting with people by phone and video call – even if in the same office.
• Removing tea towels from the office kitchen (and using only kitchen roll instead).
• A daily 15-minute update to highlight any new anti-COVID-19 measures from government; letting our team declare any symptoms, and a reminder of protocols. This update keeps awareness of the virus as high as possible without being alarmist.

Next steps to respond to COVID-19: what are yours?

We will be keeping a very close eye on Coronavirus developments, and urge contractors to do the same. It’s changing all the time. At the weekend for example, it’s likely to be announced that an unprecedented isolation period of 12 weeks (three months), is to become the minimum recommended ‘stay at home’ term for all over 70-year-olds. That’s whether the show symptoms or not.

Our staffing business is aware that some of our vendors -- and competitors -- have moved to home working. We’re not there yet as we’re confident in our ability to manage our own environment safely for now, and we’re fortunate to be in an out-of-town location with no reliance on public transport.

But by the same token, if we need to adopt WfH for all -- we will. We’re fortunate enough to have excellent recruitment and collaboration systems that are 100% accessible from home if we do have to decamp.

I’d recommend that contractors have their own ‘next steps’ planned too, even if just loosely. Oh, and don’t overly fret that because you’ve moved from contract-to-contract, workplace-to-workplace in the past, you are somehow at high risk of infection now. Our contractors, for example, tend to generally be on-assignment for six months. So although they are very much part of the flexible workforce, they are relatively static in terms of their places of work.

Outside of professional contracting, day temps paid by the hour may have to make different considerations.

Real people's lives (and real families), at real risk

But whether you’re a short-term developer, interim COO, or a security consultancy owner with a renewed 12-month contract, you’re a real person. You have real concerns, and we all have real families to protect. These truisms sound obvious, but while the mood is pretty sombre, these are important acknowledgements to make, and ones we all ought to try to remember during this pandemic -- for our betterment and to show our consideration.

Editor's Note: For medical information on protecting yourself from COVID-19, the government has provided a PDF for employers, advice for staff; guidance on cleaning offices in which a person tested positive for COVID-19 (or presented symptoms), as well as ‘Stay at Home’ guidelines.

The government has sensationally delayed private sector IR35 reform by a life-changing 12 months, after pressure by peers – and the coronavirus – made not deferring the off-payroll rules unjustifiable.

Steve Barclay, the chief secretary to the Treasury said: “I can also announce this evening, madam deputy speaker, that the government is postponing the reforms to the off-payroll working rules, IR35, from April 2020 to the 6th April 2021.

“Government will therefore not move the original resolution tonight, but will shortly table an additional resolution confirming that we will reintroduce the off-payroll working rule provisions by amending the bill, with a commencement date of 6th April 2021.”

“This is a deferral in response to the ongoing spread of COVID-19 to help businesses and individuals.

“This is a deferral, not a cancellation and the government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company pay broadly the same tax as those employed directly.”

'Off-roll' rules delayed

Despite the minister fluffing his words – he twice called IR35 the “off-roll” working rules, advisers to contractors are ecstatic.

“Although the wider backdrop of COVID-19 is concerning, this is great news,” says James Poyser, chief executive of inniAccounts.

“The Lords made it pretty clear in their committee hearing that the Treasury's IR35 position was increasingly untenable, with the rising backdrop of Coronavirus. I do welcome this pause”.

'Shocked, relieved'

Status expert Rebecca Seeley Harris echoed: “Ministers have clearly already listened to the House of Lords Finance Bill sub-committee, which sent a very clear message back to them via Lyndsey Whyte, one of the witnesses for HM Treasury.

“I am as shocked as I am relieved that finally contractor companies and their clients have got the delay that they need to put these measures in place.”

The founder of ReLegal Consulting added: “The government have made it clear that this is a deferral not a cancellation so it is important that businesses keep it in mind at the appropriate time, and now focus their efforts and whatever is needed to deal with COVID-19.”

'Nobody saw this coming'

IR35 specialist Seb Maley reflected: “Whatever commentators might try and claim, nobody saw this one coming, particularly given last week’s Coronavirus-dominated Budget confirmed that reform would still go ahead.

“The news will come as a huge relief for contractors, many of whom were bracing themselves for the worst.”

The CEO of Qdos Contractor also said: “I should add that it seems likely that changes will be introduced next year…[although] the extra time afforded does give private sector firms more time to prepare and successfully implement the changes.”

Despite the ‘nobody saw it coming’ verdict, IR35 expert Kate Cottrell said -- just a few hours before Mr Barclay’s announcement: “The Lords said in their session that a minister would be giving evidence on Friday.

Well, if so and in light of the Lords' call for a delay [to IR35 reform] in wake of the coronavirus, there is a real final opportunity here for at least a six-month deferal.

“And if I was a betting person, I suspect that if they take this opportunity they will do it before Friday -- maybe today, so the minister does not have to attend the Lords session. Fingers crossed.”

'Call off the dogs'

Recruiter Natalie Bowers reflected: “Phew! What a welcome relief this is for so many of our contractor friends and associates.

“Yes, we will have to quickly unpick the spaghetti that has been the torturous preparation for IR35 [reform] but at times like these this, it’s a welcome relief for the whole industry."

The boss of Bowers Partnership added: “At a time when the contract market is all but on its knees, I can’t think of a better piece of news. Someone has taken a very pragmatic view here -- and we have to be eternally thankful for that. Call off the dogs. Common sense has prevailed.”

Employer National Insurance. The Apprenticeship Levy. And even the Status Determination Statement.

Just three on a long list of IR35 reform-related costs passed on in recent weeks from engagers to limited company contractors, forcing a hefty chunk of such PSCs to eye permanent jobs.

There’s extra tax from inside IR35 assignments; or the extra tax (and fees) from umbrella company contracting and, tied to both ways of working, the loss or curtailment of expenses.

'Passing on their costs to contractors'

Interim’s findings confirm -- 40% of contractors expect their take-home pay to fall when the IR35 rules change, increasing to 65% of contractors in the financial services industry.

“[Many engagers] who banned PSCs or who have flawed assessment processes have been passing employment costs onto contractors,” says James Poyser of inniAccounts.

“Couple that, with the inability to claim travel expenses -- and many contractors have long commutes, [you can see why] net pay rates are dropping by around 40%.”

So it’s not surprising nor “unreasonable,” says Poyser, for PSCs to look -- maybe for the first time in their careers, at trying to secure a permanent role. Even though some include pay cuts.

'No SDS, no opportunity to challenge'

But ‘unreasonable’ is how engagers have been handling the off-payroll rules, even to the point of non-compliance, hints one PSC. This too makes full-time work, away from IR35, look appealing.

“The roles being [determined by my engager’s third-party advisory as] ‘inside IR35’ will not be issued with a client SDS,” says an IT contractor for a supermarket giant.

“So there’s no opportunity to challenge the determination. This approach does not align with the revised IR35 rules, but the client has confirmed its ‘no SDS for inside’ roles in writing.”

'No more IR35 to worry about'

Other contractors point the finger of blame at the instigator and enforcer of the IR35 rules.

“I was a contractor, but felt HMRC gave me no choice but to cease trading and look for the right permanent opportunity,” says an ex-PSC in week one of her transition to ‘permiedom’.

“Thank God I've decided to go perm. No more IR35 [to worry about] and I can work from home, earning a salary, [even during] a national [health] emergency.”

'Prejudice, reservations'

Yet it’s not a transition to enter in to lightly. “The permanent job market is going to be difficult for seasoned contractors to transition into”, cautions CV expert Matt Craven.

“Unfortunately, permanent recruiters just don’t like the profile of people who have contracted. It’s a similar scenario to the prejudice I would expect if I decided to apply for a job.

“I’ve run a business for over 14 years and I would expect employers to have their reservations about my ability to transition back into corporate life. Whether that is fair or otherwise, it’s just the reality of the situation.”

Speaking ahead of his ‘World Class CV’ webinar for ContractorUK readers later today, the boss of the CV & Interview Advisors also flagged up the more visible barriers.

“The life of a permie is often quite different to being a genuine contractor. There’s differences in culture, mindset, politics, tax too. But the first port of call -- the application process, is also very different whether it’s with CVs, LinkedIn or interviews.”

'Raft of resignations'

In light of these many differences, there will be question marks for engagers’ over whether their new staff members who are former contractors, will remain as a former contractors.

“How long will these new permies stay in permanent roles?” asks inni’s Mr Poyser, who runs off-payroll.org.

“Our research shows over 75% of contractors expect the market to return, and when it does, will we see a raft of resignations? This is what we saw after the 2008 financial crisis.”

Currently, six in 10 businesses say that the new IR35 rules will have a “large impact” on their operation, and are “concerned” that they will not have enough resource.

'Low-risk = high-tax'

But Iain Pennell, director at New Street Group, which produced the finding having run a survey between December 2019 and February 2020, believes the taxman has made it too easy.

“It’s clear why so many contractors are looking towards permanent roles – they know that HMRC will be taking a much bigger slice of their income.

“The way this change is being implemented by the government means that a lot of businesses are being forced to take the low-risk approach on how they classify their contractors for tax purposes. Unfortunately for contractors, the low-risk approach is also the high-tax approach.”

'Outside IR35 contracts now coming through'

However, it’s not all one-way traffic for PSCs. “We are starting to see a few contracts coming through that have been assessed as outside IR35,” says Graham Jenner of Jenner & Co.

“And we’re seeing a few that have been determined as ‘inside IR35’ but the end-client is allowing a PSC to be used -- which means there is a chance of getting it determined as outside, or agreeing another contract that is outside IR35.”

Such contracts would provide a welcome respite to a niche financial service recruiter Bowers Partnership.

'Tumbleweed'

“It’s pretty dire out there at the moment,” said the firm’s founder Natalie Bowers, speaking last week.

“Contract job volumes are through the floor. Fixed Term -- the worst of both worlds in my view -- has raised its ugly head. And I don’t like to use the word ‘tumbleweed’ but I can’t remember when the market was this quiet.”

In line with the recruiter’s downbeat assessment, agency body APSCo has said contractor placements fell 10 per cent between January and February 2020, as engagers affected by IR35 reform “shy away from contingent workers.”

We are still very much in business during the Covid-19 outbreak, and while we are working from home we are still operational on a full-time basis (although a number of our staff have been furloughed).

We continue to recruit, as well as living up to our commitment to pay on time or early, and never late.

Our office number is not currently working, but you can reach us by email or via our website or social channels. We are still answering all calls, emails and website enquiries by return. We look forward to hearing from you

The largest ever crash in UK demand for IT contractors hit in the four weeks of April 2020, when the coronavirus pandemic and measures to contain it brought the country to a standstill.

Showing the most severe contraction in its 22-year history, Report on Jobs scores demand last month for IT/Computing skills on a contract basis at an unprecedented, all-time low.

The score, 11.9, is almost three times lower than what was recorded for IT contractors just a few weeks back -- in March (the index’s growth score is 50.0), when the outbreak started and hiring freezes began.

The record-low is also some way off the previous IT contracting nadir of 28.1, recorded in January 2009, when seasonal drop-off combined with the financial crisis which went on to cause the Great Recession.

'TEMPORARY COMPANY CLOSURES'
But the COVID-19 outbreak “and the subsequent public health measures” to try to restrict it have caused “temporary company closures” and, in turn, redundancies, the report says.

Published before Boris Johnson’s announcement last night to ease the lockdown but keep social distancing measures in place, the report blames “uncertainty over the outlook”.

“[This uncertainty] is weighing heavily on the nation… it’s an unprecedented situation for UK business,” says James Stewart, vice-chair of KPMG which co-authors the Report on Jobs (RoJ).

He added: “The COVID-19 pandemic continues to wreak havoc on the UK jobs market with a record drop in vacancies and recruitment plans frozen.”

'SECURING TALENT DURING LOCKDOWN'
Yet last month, a veteran IT recruiter said end-users who offer ‘key’ public services were still hiring contractors. And online, agents are warning firms to be ready for the morning that lockdown lifts.

“[Some of our] clients [are] talking about working on vacancies now and securing talent during lockdown,” one agent said in a LinkedIn post.

“[So] some interesting chats about the fact that recruitment takes time and many brands will need to hit the ground running when we get back to it, so having that person interviewed and ready to go is essential.”

But another recruiter hinted that it is the sheer scale of hirers’ negative reactions to COVID-19 that is putting the positive reactions of ‘the planners’ and ‘the preparers’ in the shade.

'INSTANT 20% CONTRACTOR LOSS'
“Those two types of clients do exist,” the recruiter told ContractorUK.

“But much more normal is for us to lose an instant 20% of contractors across the board, whenever a major crisis like this one hits.”

Despite the contractor terminations, the Recruitment and Employment Confederation said its member agencies in April were still seeking six types of IT contractors.

Each declared ‘in short supply’ for relevant contracts, the six are Data Science; Database Development, Development, IT, Java and Technology.

'ECONOMIC STRAIN CANNOT BE SUSTAINED'
REC agencies placing full-time staff said they too looked in vain in April for Data Scientists, Database Developers, Developers, IT, Java and Technology professionals, but also had insufficient numbers of applicants for CNC and Data roles.

“Fighting the virus must remain our priority,” the confederation said in RoJ.

“[But] the strain the lockdown is placing the economy under cannot be sustained indefinitely without very significant and long-lasting effects on unemployment and job creation.”

In line with chancellor Rishi Sunak’s comments about winding down the CJRS, the REC’s Neil Carberry said: “[The] government needs to work with businesses to ensure that the support they have offered tapers out as the economy returns to normal, rather than leaving firms facing a cliff-edge and having to cut costs quickly through things like higher redundancies.”

'CLIENTS WENT INTO CORONAVIRUS SHOCK'
However, a staffing boss who places IT contractors in London said the market would probably ‘do its thing,’ almost no matter what.

“We did get the industry-standard 15% terminations as clients went into shock due to coronavirus – but that’s how the market works.”

Responding to questions, the boss also told ContractorUK: “It’s a flexible workforce and in times of crisis there are always some early casualities, unfortunately. Let’s just hope that the rest of our fantastic freelance workforce can continue to provide value -- to clients remotely -- while we ride out the rest of this awful storm.”

The government has been told to end “significant financial hardship” for 710,000 limited companies, inflicted by it barring their dividends from its Coronavirus Job Retention Scheme.

Although calls for the CJRS to cover the main way in which limited company directors pay themselves have been heard before, this time they are from the Treasury Select Committee.

Chaired by a historically anti-contractor figure Mel Stride MP, the committee said yesterday that while PSC directors can furlough themselves, the “benefits are likely to be minimal.”

'The Treasury does not know'

Mainly, that’s because directors “take a large part of their income in dividends” but, under CJRS, “are only entitled to claim …the typically small PAYE component of their income.”

Despite its eligibility criteria being well-established, “the Treasury does not know how many people” fall foul of it, said Mr Stride, possibly embarrassed given he used to work at HMT.

“The impact of the lack of support for company directors was predictable even [way] back then in March 2020,” tax dispute specialist Jesminara Rahman told ContractorUK yesterday.

'Not enough to support directors'

As director of Tax Resolute UK, she also said: “HMRC indicated that if a salary is claimed -- even if a minimum salary, the director can access the job retention scheme.

“But we…have seen that this may not be a possibility for the director, or simply the amount is not enough to support the director through the…months of this coronavirus pandemic.”

Pointed out that, for some PSC directors, it might seem a bit late in the day to now be looking at including dividends in a scheme which has already closed to new entrants, Qdos disagreed.

'Better late than never'

“I get the sense that any help would be appreciated”, said the status advisory’s Seb Maley, responding to questions. “Would support not be better late than never than not at all?”

IR35 expert Kate Cottrell isn’t entirely sure it would. “I would say be careful what you wish for here.

“The payment of dividends means that you have decided that IR35 does not apply to your engagements, so you’re not a ‘disguised employee’ of your client and are a genuine business.

“To benefit from the CJRS, are you now saying that the amount paid in dividends was in fact your income?” she asked. “How would you explain this to HMRC in an IR35 investigation?”

'IR35 status'

The Bauer & Cottrell co-founder also said that for some PSCs, it may be worth calculating the difference between inside/outside IR35 plus:

“If you got [your] IR35 status wrong, how much you would be charged by HMRC to include tax/NIC, interest, and penalties versus the amounts you can claim under the support scheme.”

Adding a note of caution, the former tax inspector advised: “There are going to be an awful lot of compliance checks carried out by HMRC to police the support schemes and no doubt IR35 will also be considered.

“Hopefully, if support is to be provided, HMRC will not conflate the two issues but I am not holding my breath.”

'HMRC will be under increased pressure'

At Qdos, which similarly runs IR35 contract reviews, Mr Maley agreed: “Taking into account the cost of the crisis to the Treasury, it’s highly likely that the tax office will be under increased pressure to raise tax receipts.

“Given IR35, for example, is an area in which HMRC believes there is deliberate and huge non-compliance, it wouldn’t be a surprise if the tax office was to focus a proportion of its efforts here,” he said.

The resources which the Revenue has at its disposal are mentioned in the committee’s report – initially to reiterate the taxman’s stance on why dividends aren’t covered by the CJRS.

'Significant losses'

But lack of resources is also given by HMT as the grounds for not adopting a proposal by IPSE, in relation to how dividends might be covered by the furlough scheme.

The contractor trade body had its estimate of 710,000 accepted (as the number of PSCs excluded from any or much CJRS support), but its ‘clawback’ proposal is still on the shelf.

In fact, the committee’s report quotes the chief secretary to the Treasury, Steve Barclay, as saying the clawback could, “create significant losses due to error, fraud and criminal attack.

'Accept and implement the clawback'

Mr Barclay also spoke of “high risk that incorrect or fraudulent payments could not be recovered,” and that “manual compliance checks would be highly resource intensive for HMRC”.

But despite being unmoved by the appeals of contractors in the past, Mr Stride clearly thinks it’s a price HMRC must pay if PSCs are going to survive and help the economy thrive.

“While we recognise that this approach may require significant resources,” began the former Treasury minister, referring to IPSE’s clawback (a “ready-made solution” he believes), “we urge the government to accept and implement this proposal.

“While it will have immediate cost implications, it could mitigate future economic scarring and safeguard future tax revenues.”

'Precarious'

Mr Stride added that many of the individuals affected by the CJRS (and SEISS) not adequately compensating them through the covid-19 pandemic “have a key role to play in firing up the economy,” but currently face, “significant financial hardship.”

He said the government must find a “practical solution” to support the “hundreds of thousands” of such independent workers who are going without.

“It’s a precarious situation,” confirmed Tax Resolute’s Ms Rahman. “The recovery of the economy will have to factor-in the recovery of these same entrepreneurs, company directors and self-employed.”

“What’s being overlooked is the economic value of this group,” agreed Qdos’ Mr Maley.

“The UK is going to need the flexibility and skills of freelancers and contractors as it looks to repair the economic damage caused by the virus -- the government cannot afford to ignore this.”

As a contractor recruiter, I’ve worked through every market crisis going since 2000, but this ongoing one caused by the pandemic of covid-19 in the UK has been very different, writes Natalie Bowers, co-founder of niche financial staffing agency Bowers Partnership.

Contracts? They went through the floor

The rub is that the volumes of contract roles fell through the floor in March, when the country went into lockdown because of coronavirus. That steep decline was unsurprising, perhaps

But what was unforeseen is that a household name in the financial sector whose reactions to contractors are almost always copied by the sector’s bedfellows, wasn’t this time around. Unusual, but welcome. Because the reaction this large bank had to covid-19 depressing its operations was to impose a furlough of its own on its contractors, effectively imposing on them no option (other than termination) to accept a much shorter, billable week.

The dog that didn't bark

So other than the official one from the government, ‘furlough’ is a bit of a red herring in this crisis. In fact, I’ve seen more contractor furloughs over any normal Christmas period than I’ve seen since the lockdown! Fortunately, that initial furlough by the household name was a bit of a knee-jerk reaction. Any copycats were largely over and done with in the early days of March/April. For this crisis, then, furloughs were the dog that didn’t bark. Herrings, cats and dogs. Do ‘bear’ with me.

Nonetheless, contractors have still been bitten, clawed and mauled. Normally in a nationwide crisis, we recruiters would expect to see the contract market come back first, as clients usually tentatively dip their toes back into the resourcing water. But as I said at the outset, covid-19 is different. To everyone’s surprise (and to some people’s dismay) it’s the permanent resource that’s got the momentum, rising like a phoenix from the ashes.

Cause to celebrate

And while most hardcore contractors may initially view this as unwelcome, I would say, on the contrary, it bodes well. The less contractors in the market, the better – for you individually. It’s the simple law of supply and demand, and in a market that’s been over supplied in many areas, I actually celebrate the ‘perm renaissance.’ Your next rate, or your rate a few contracts down the line, will likely celebrate it too.

Generally when people ask me ‘how are contractors coping with covid?’, I’m sometimes tempted to say, ‘Very nicely, thank you very much.’ That’s not because demand is astounding; far from it. Rather, it’s more to do with these workers already being very flexible and already being very likely to have worked remotely before, and them then being given the apparent ‘pain’ of having to work flexibly or having to Work from Home (WfH). Or in the case of one contractor who I know, it’s ‘WfB’ – 'Work from Barbados.'

Blissful

Thanks to the mini-heat wave we’ve had in the UK of late, I’d say even the mullet-sporting and grey-rooted among us would agree that what has amounted to a six-month pass to work totally on our own terms, and on our own turf, has been blissful. And despite’s covid’s best efforts, productive too!

The cloud on the horizon is private sector IR35 reform. We should all be in no doubt that the new off-payroll framework, timetabled from April 6th 2021, is here to stay. Even the most die-hard contractors have now come to terms with this. The chancellor Rishi Sunak has made it clear that everyone will have to pay their way (even if their way was being paid already), and what a massive bill it’s going to be. Anyone would think there’s a crisis on which the government needs to pay for. The truth is that it’s not all doom n’ gloom. There will be contract roles. There will be outside IR35 contract roles. And there will be premium rates on offer for those who fit (outside) the IR35 bill.

Skype versus a hot coals stroll

Like many I speak to, I’m inclined to hang onto some lessons that the crisis has taught me. Not even six months ago, most contractors (and clients for that matter) would have rather walked over hot coals than hop on a video call. Fast-forward today and it’s even part of the standard vocabulary.

The beauty of the ‘Zooms’ of this world is that the days of polishing up the interview shoes and dusting down the shoulder pads seem to be far behind us. As one contractor knows, just make sure you are only visible from the waist down! Faced with Teams and the like, many of us were pulled dragging and kicking at the start of covid-19 , but nonetheless as the months roll by everyone has got on board with the online meeting and even better, for our contractor fraternity, the online interview. With efficiency up and spirits lifted thanks to us increasingly finding out feet in this new normal, long may the Zoom revolution continue!

A second national lockdown being imposed in England this Thursday due to the ongoing coronavirus pandemic is receiving a very mixed response from the contractor sector.

Supporters say that the four-week shutdown announced by Boris Johnson on Saturday and due to run from November 5th to December 2nd, could be helpful to bolster Track and Trace

In fact, agency body the REC says that while Mr Johnson’s order is a “big step” with “many challenges,” there is a “need to control the spread of the virus with better [technology.]”

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It didn’t pan out quite as it was forecast by my fellow agents, mainly due to the unforeseen introduction of ‘Tier 4’ covid restrictions, but the bounce back in temporary billings which staffing firms expected in early December more than came to pass for us and our contractors, writes Natalie Bowers of niche contractor jobs agency Bowers Partnership.

In fact, December 2020 was the busiest December our business has ever experienced – and I’ve been at this contractor recruitment game for 20 years!

Our 2021 outlook, upended

At the tail-end of the Christmas holiday, this record uptick made us optimistic for the New Year and convinced that it boded well for hiring activity in the rest of 2021. That was our feeling right up until England was plunged back into coronavirus lockdown – the third of its kind – on January 4th 2021.

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