IR35 punishes the long client relationship, contractor tells minister
Graham,
As a contractor, it is in my interest to build a good client relationship and work well for that client, so that they offer to extend my contract. Many companies will tell you that the sales effort accounts for much of the costs of a company, and it is the same for me. Why waste time selling when, by building a good client relationship, I can just work, and make revenue? Under IR35, this is not in my interest, because working for the same client (that is 'other contracts') may be taken into account in an assessment of whether or not a contract is disguised 'employment'. My area of expertise happens to be one where a long-term relationship is advantageous for the client as my skills need to be applied to _their_ environment, which is a learning process.
I chose not to renew at the end of my last contract, but say there hadn't been any work? I would be living off my own savings etc etc with no Government support for months (as I understand things). Consider, for a moment, an 'employee' who is laid off due to outdated skills, lack of work, or poor performance... the Government pays them!
So... we are not just talking here about the benefits from my 'disguised employer' that I don't get as a contractor; sick-pay and holiday-pay etc, but also the benefits I don't get from my Government when the employment relationship goes sour.
So, I would never turn to government aid if I could help it, and I was working and everyone was benefitting from me being a contractor. I won't deny that I was financially better off - but this was partially due to the way the private sector will pay low salaries if they possibly can [when I was an employee]! So, some of the extra money was put into the economy, some on extra taxes, and some was for my security, essentially indemnifying the government from subsidising me if something should go wrong.
Speaking for myself, I have found IR35 has left me entirely disillusioned with what I previously considered to be a normal work-ethic; it has highlighted for me how much I have put into the system, as opposed to how much I have taken out (and I am a smoker - so add that in to your calculations!) IR35 in my case seems as crazy as a tax on insurance. If my uninsured house burns down, I am homeless and need government help! But that is another story.
Finally, IR35 breaks three important rules of computing [free consultancy]:
1) Keep it Simple [IR35 is not straight-forward or clear in implementation];
2) If it isn't broken, don't fix it [Was the old way really that bad? IR already had powers to note relationships as being a 'sham' etc];
3) If there is a problem, fix the source of the problem, not the result. This increases entropy (chaos) in the system. [We work the way we do because of previous Acts of Parliament - 1988 FSA??? etc - there are often multiple 'sources' to a problem]
Best regards from a currently non-working, non-income-support, non-dole, highly-skilled person,
Nij