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80% of UK Government IT Projects Suffer Delays Due To Tax Clampdown (theregister.co.uk)
An anonymous reader shares a report: The vast majority of UK government IT projects are suffering delays due to freelancers quitting over the IR35 tax clampdown, according to a survey of contractors. Of 405 IT freelancers surveyed by Contractor Calculator, 79 per cent said the projects they have been working on were delayed as a result of contractors leaving. In April, the government shifted responsibility for compliance with the IR35 legislation from the individual contractor to the public body or recruitment agency. The Treasury says it hopes to raise $240m for 2017/18 by bringing public sector contractors within the scope of the legislation. However, the overall number of freelancers leaving as a result of the changes is lower than previously thought, with 48 per cent jumping ship. In previous surveys more than 80 per cent had threatened to walk once the changes came into force. Half of the contractors who decided to stay managed to find a way of working outside the IR35 changes, with a further 13 per cent working within the scope of IR35 but negotiating a rate increase. The rest seemingly took the changes on the chin.
It's easy to spend other people's money. There's no consequences or responsibility. It's why the UK has descended from the world's premier Superpower to American lapdog.
Yes, apparently you deal with sociopaths by electing them as the head of said government.
Let's see how that works out for your "group society" in the long run.
> IR35 aims to prevent option 2 and they recently put more effort into enforcing it.
> As with many tax laws, it is riddled with "grey area" loopholes that many people still manage to exploit.
I contracted for 15+ yrs in London finance - 1998-2013. The original impetus for IR35 was the large consultancy firms lobbying the government. They were upset that a large "army" of freelancers were able to provide the sort of temporary labor on projects that consultancies typically made money from. Contractors initially found easy ways to stick within the law even after being pursued legally. There was the clumsy (and potentially illegal) attempt to retrospectively re-interpret S660A (the ability of spouses holding an interest in the company to get dividends) - going against the standard interpretation which had existed for literally hundreds of years.
"Red" Dawn Primarolo also made the argument that IR35 would bring in a lot of tax dollars. It didn't.
It simply reduced the mobility, size & availability of a previously highly skilled workforce for hire.
The government eventually got its way through gradual attrition & rhetoric - you could reasonably argue that it had the upper moral hand. However, the effect has been exactly as predicted - much less labor mobility & the gradual diminishment of IT capability in London. Luckily in some senses it coincides with the downturn of investment banking since 2008, so the effects have not been so drastic. That capability won't return.
I eventually decided that the tide was turning against me, so I quit work in London & moved to the US where I'm not the chief architect of a $20bn+ company. Yeah, I guess the UK government got what it desired, but perhaps it had other effects not so desired...
We've seen this Reaganomics voodoo before, and it doesn't work because it was never intended to "work", it was intended to enrich the owner class further so they could extend their grasp over a duly uneducated captive electorate that doesn't care to study macroeconomics and prefers bullshit six word slogans instead.
Trickle down economics works reasonably well in a non-globalised economy. In the old days, most money stayed in the country so the wealthy used it to grow their local business which in turn trickled down to employees and their families.
But when modern transport and comms networks opened up borders, the money no longer trickled down, it trickled away overseas to cheaper labour and tax havens.
The idea is sound, but like most conservative policy it was just 20 years too late.