Tag Archive | "Intra-company transfers"

My 8 step guide to a multi-billion pound business

After a lot of study and reading all kinds of authoritative sources I think I’ve worked out a business idea that lets you build a multi-billion pound business over the course of a few years. Like all projects it has a logical plan to make sure everything happens as it should. It goes like this:

First, you need to have a workforce based in a lower-cost economy than ours, which isn’t actually that hard to achieve these days. Even our expensive European cousins are trying very hard to drop down to a third world economy rather than accept the Euro is doomed. However, basing it outside Europe is preferable.

Then you need to reinterpret the meaning of the phrase “business specific”. Make it mean “works for you and can read”. This is important; if you want to deploy your workforce over here they need to be able to get in (not that hard to do, apparently) and be permitted to work here. That needs a Visa, but luckily you can use the ICT option. That allows you to import workers who have particular knowledge of your business. Hence the need for reinterpretation; if you don’t, they won’t qualify as ICTs and you can’t use them.

These valuable workers need paying of course, and there are rules about that. For less than a year’s stay, for example, they have to be paid £24,000. Not a problem, it only says you have to pay them that, what they actually get is a different matter. After all, you are paying for the travel and accommodation, so let’s offset that against the £24,000. That way you can pay them a little bit more than they get at home and spend the rest on their expenses. Or even yours.

Ah yes, accommodation can be expensive. Best way to economise is to share it among as many people as possible. After all they’re only here temporarily so can rough it for a while.

Better make sure the workers never ever let anyone see their pay slips while we’re at it. Wouldn’t want to disclose our margins, would we?

Right, so now we have a skilled workforce in place at roughly a third the cost of the locals. Time to drum up some work for them to do. So let’s sell them to UK businesses as a cheaper alternative to using the expensive workers they normally employ. With the money saved earlier we can afford to put them out at two thirds the usual charge, so the client must be making a big saving. Easy.

Then, once we have control, we have other options to maximise revenue. If there’s a bug in something, don’t try and fix it, that’s just a fudge. Rewrite it properly, from scratch. Much more work for your workers to do, not only re-writing it but testing it and releasing it and re-training the users.

More work means more people; don’t really care how good they are. Better get some more ICTs organised then. Advertise back home that you’ll sponsor an ICT for a mere £1000, no actual job offer required. That will get the applicants flooding in.

And when the locals kick up a fuss, persuade some senior politician – ideally one who is rapidly approaching sainthood – that the skills don’t exist locally and you have the only alternative. Make sure the skills don’t exist locally, of course, by only advertising roles at non-viable rates that only your workers can live with.

And the final bonus point: in only a few years you will have killed off the local industry totally and have it all for yourself.

Brilliant plan, isn’t it? Guaranteed to succeed. Wonder why nobody’s thought of it already…

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Sarah Xmas 06 family sketch by ndrwfgg

Posted in alan's blogComments (0)

Am I in scope or not? Nope, no idea…

I‘m spending quite a lot of time these days sitting on the train between home and work. It’s not enough time to do the Times crossword, nor to dig out the laptop and do half a day’s work. Even if it were the “aircraft-style seating” is exactly that, too cramped to allow you to do anything apart from sit and stare out of the window.

Doing that, you can’t help but notice the huge amount of hardware that is spread around the edges of our railway system. There are boxes of all sizes, some with arrays of cabling, some seemingly freestanding. There are odd little plaques on station platforms next to the track with sliders on that serve no obvious purpose. Some boxes are labelled but many are not. And all this on top of all the signals and points and speed limit signs and so on. you expect to see anyway.

And all this complexity so you can get on a train, be moved though a series of connections and arrive within two feet of where you got off yesterday. In other words, that complex infrastructure doesn’t impact on you in the slightest; you can get to where you’re going without having to think about it at all.

So what a shame that same approach doesn’t apply to legislation

I’ve been looking at two different set of documents recently, the clarification of the Agency Workers Regulations and some of the material around the latest position on ICTs. These are complex subjects, admittedly, but in essence the aim of the documentation is to allow you to determine to what extent the relevant legislation affects you personally. And I think both have failed in that aim.

The AWR guidance, apart from containing more typos and grammatical errors than I’ve seen in a hundred other HMG papers combined, is bafflingly opaque on perhaps its most fundamental question: am I as a freelance with my own company in scope of these regulations or not? Nope, no idea…

The reason, apparently, is because the authors want to be able to exclude artificial avoidance measures taken by the unscrupulous. They do this by including lots of fuzzy wording that’s open to interpretation. So to pursue the railway analogy, the points may be set to take you to Wales, but you may still end up in Cornwall. Why, nobody knows.

It’s the same with ICTs. The criteria are clearly stated: for example, work here for up to 12 months and you have to be paid £24,000 a year in salary. Except they haven’t defined “salary”, they haven’t defined what allowances go to make up that salary and some of their attempted clarifications are actually mutually exclusive.

Now these documents have been written by clever, educated people who have a solid grasp of the matter in hand. You have to conclude that the ambiguities in the documents are deliberate. You may accept that this is to minimise the risk of avoidance of the rules, but I’m afraid I don’t. As I said to my previous MP when debating the Arctic case, the best way to avoid people breaking the rules is the make the rules binary. You can’t really apply uncertainty theory to a set of points and expect to end up on the right track.

All in all, it’s a hell of a way to run a railway.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited

Image: Fishers of people by LivingOS

Posted in alan's blogComments (0)

Four words that seem to have passed by St Vince of Cable

I see St Vince of Cable is back in the news, challenging Mr Cameron’s views on immigration. What a shame that he is continuing to confuse two entirely different issues, which is most unlike a Liberal Democrat.

I offer no comment on immigration in general. I tend to side with the Cameronian view that controlled immigration is a good thing while uncontrolled immigration is not, but that’s as far as I go on that subject.

However, the importing of foreign labour to do jobs that used to be done by UK workers? That, I’m afraid, is a different issue entirely.

Sadly it is a distinction that Cable seems determined not to make. He remains wedded to the view that UK PLC is in such dire straits that it absolutely has to import a range of technical and engineering workers to maintain its position in the world economy. Furthermore he is supporting this contention by pointing out that it allows us access to markets that would otherwise be closed to our industries. This has a degree of merit, if you allow that we have something that market wants to buy.

But it is interesting to note that I don’t see a great influx of Chinese workers on ICTs coming in to the country to do a range of fairly low level technical jobs. After all, China has a rapidly growing economy and probably the biggest untapped market anywhere in the world. And we seem to be pretty good at selling into it, without reciprocal trade deals – at least, none that I’ve seen reported. I could be wrong but I also don’t see us paying for China’s growing nuclear industry, nor its education system.

Funny that, isn’t it?

It doesn’t help that the people charged with supervising the new ICT rules on salary banding and the like don’t seem to have much of a clue what’s going on either. The transcript of a discussion at the Public Accounts Select Committee makes for depressing reading. Not that they aren’t concerned about the issue, they clearly are, but that they are so vague about the rules themselves and vague about how compliance is going to be measured. At one point they are saying that the number of request for salary information to enforce the rules is too high for the system to cope. In other words, the rules are in place but there’s no effective way to apply them. They are even rather vague about the local resident working test, which is intended to stop an existing worker being booted out by an incoming ICT one.

And Cable and friends still fail to grasp the fundamental point here. If we give all the entry-level jobs away, how are those 20,000 IT graduates, to take one example, ever going to get their first step into their chosen career? And in a few more years’ time, where will we find the middle managers and technical experts who actually get this somewhat overrated ICT workforce to deliver to the required standard?

This is something that needs decisive and effective action. Four words that seem to have passed by the honourable Secretary of State for Business, Innovation and Skills without leaving a visible imprint.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited

Image: No entry for big-haired cleaning ladies by lorentey

Posted in alan's blogComments (0)

That was the year that was

And, I have to say, quite a successful one, perhaps unexpectedly given where we started from. Speaking strictly as a freelance contractor of course, I thought it appropriate to round off 2010 with my slightly biased view of how the year has gone. So here goes with a very personal summary of the key events.

The main one, of course, has to be the replacement of Gordon the Glum with a real person. You may not like CallMeDave but you have to agree he’s an improvement on his predecessor: OK, not if you’re Ed Balls or Piers Morgan of course, but who listens to them anyway…?

We’ve gone from a Government that was totally and utterly convinced they knew best how to spend your money to one who was perfectly happy to let you spend it how you wanted. Of course, there wasn’t all that much to spend and they were going to have to hang on to even more of it than before. But let’s not be picky; at least we know why they’re being so mean.

So let’s look at the good things…

ICTs and the abuse thereof. Something I may have mentioned once or twice before? Leaving aside the wider question of uncontrolled immigration, there is a clear intent by HMG to cut down the number of workers coming in to the country to undercut the local workforce. Of course we are never going to stop companies using the cheapest labour they can find, that’s all part of capitalism and globalisation, but at least someone is trying to make it a bit harder to get us to train them how to do take our jobs away and kill off the industry at its source. Which, ultimately, has to be a good thing?

We still labour (geddit, geddit…?) under the Damoclean threat of IR35 of course. I never shared the conviction of some that a Tory government – oops, sorry, a Coalition led by the Tories – would instantly delete IR35 from the statute book. That was never going to happen; there is a political justification for IR35 that, while utterly barking, is not going to be reversed in any meaningful way.

Obviously the establishment of the OTS, and its very clear directive to look at IR35 as a priority was highly welcome. Even more welcome was the PCG gaining an influential seat on the Consultative Committee of the OTS looking at small business taxation. An organisation with 20,000 members and a 10 year lifespan gaining such access and respect at that level is something that simply cannot be underestimated. The OTS is working to some impossible deadlines, but fingers crossed, progress is being made.

The job market certainly seems to be picking up. I’m seeing hugely more jobs in my scope that I saw this time last year. Of course, 95% of them I won’t bother going for because the hirers are demanding impossibly tight lists of skills, industry knowledge and qualifications. The agencies are still incapable of challenging them and offering alternatives. For example I’ve been tracking a discussion on LinkedIn about how to use shared services and/or outsourcing to save money in Local Government. Good idea and one that may well work. Sadly, the consensus is that it won’t happen because the hirers put Local Government knowledge well ahead of any business experience that means you might actually understand how to do it properly. You see the same thing in Finance, which is a real shame since that’s where the work is. And don’t get me started on Security Clearance.

Oh, and I nearly forgot. St Vince of Cable has shown himself to be every bit as incisive, astute and intellectually superior as I always thought he was…

Personally it’s not been a bad year. I’ve worked most of it and actually banked a profit, which is nice. There is certainly reason to be optimistic about next year. The PCG continue to make great strides forward which is a source of pride, even from my marginal input to that progress. And I’ve had some nice comments about this blog, which proves that at least people are reading it, even if they don’t agree with me.

So roll on 2011. I think it could be an interesting year. I’ll see you there…

Alan Watts can found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: 20101022-IMG_9603 by Dhammika Heenpella

Posted in alan's blogComments (0)

So near and yet, so far

That was the immediate reaction to Theresa May’s pronouncement on how the Coalition will be handling work visas as part of its attempts to reduce immigration: a fair start but not nearly limiting enough. While it was good to see positive efforts to reduce the influx of non-EU workers, there was a sense of disappointment that the ICT visas, about which there has been so much debate, would not be included in the capped total.

Why this should be so is mostly down to two factors. Firstly the somewhat misguided belief of some Coalition members, apparently led by St Vince of Cable, that British business would flounder in a sea of amateurishness if we didn’t keep importing these vital skills from overseas in unlimited numbers. Well I’m sorry, St Vince, but I’ve worked with quite a few of these incoming experts and while the odd one or two are very good indeed, the average is rather closer to the other definition of “expert”; “ex” as in “has been” and “spurt” as in “drip under pressure”.

Joking aside (OK, it wasn’t much of a joke, I admit…), it is nevertheless a valid point. ICTs are for moving highly skilled experts around or for putting experts and trainees together. It seems a little perverse that the bulk of the ICT traffic seems to be bringing in the trainees rather than exporting the trainers.

The second pressure was from big business. Some very big businesses in fact, although oddly enough they aren’t primarily UK companies. UK businesses were involved of course, although reading between the lines a little it is horribly evident that the UK companies had a genuine fear that they would lose their ability to move modest numbers of staff freely in and out of Britain while the other guys, the predominantly non-UK ones, were clearly more worried about their bottom line. Although you have to ask exactly why non-UK companies think they should be able to redirect UK’s government policy in the first place.

Anyway, the deal has been struck, ICTs are not being capped. Gloom and despondency among the UK freelance workforce, joy unbounded from UK PLC (or should that be Elsewhere PLC?).

But wait. There is a glimmer in the gloom.

If you want an ICT visa and to be here more than a year, you have to be earning at least £40k per annum in real salary. Given the supposed qualities of the average ICT that is a not unreasonable figure for most companies.

Aim to stay less than a year and it falls to £25k. Which is a laughably low for a talented individual, of course, but still significant; many ICTs being body-shopped in the UK workforce are allegedly paid rather less than that already. But that one year cap makes all the difference. It blows a big hole in the budgeting, which has been designed to recover immigration expenses over two or three years.

The reactions to this from the big boys have been interesting. Briefly, they really do not like it. Which means basically we got it right. Shame…

And one quote is, I think, particularly revealing. One company is reported as saying that it will be difficult to pay different salaries to people depending on if they are staying more or less than a year. Well it shouldn’t anyway (perhaps they need a better IT system…), but surely you are paying these people a wage in their home location, aren’t you? Why do you want to pay them anything different for a temporary gig elsewhere?

So while at first glance it was less than we wanted, it’s actually a pretty damned good compromise. The guys who put this together were largely reacting to some solid, very high quality work by the PCG team who should be congratulated for a job very well done. That an organisation representing some 20,000 freelance members can persuade the Coalition to go against the wishes some multti-billion pound corporates is an astonishing achievement.

In fact the title of this blog is all wrong. It should have been “Nemo me impune lacessit”. Which, as I’m sure you all know, translates as “Don’t mess with me, Jimmy”.

Alan Watts can found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: David Vs. Goliath by miss_rogue

Posted in alan's blogComments (0)

We live in interesting times

I know I keep banging on about ICT abuse, but I make no apologies for it. The systematic destruction of one of the few things we do well in the pursuit of short-term gain is getting well beyond a joke. Just look at what’s been reported in the last week or so.

Firstly, it seems that British business is in dire straits, utterly unable to get the skilled staff it needs to fill some key roles. Therefore, we mustn’t put any kind of cap on intra-company transfers or we will go even more bankrupt than we already are.

OK, so explain this. While most companies need a hundred or so ICTs a year to bring in their key personnel, how come just five of them consume over 10,000 a year? If these highly skilled employees are so necessary, why are the people already doing the job being tasked with teaching the newcomers how to do it? Isn’t the point of an ICT that the holder knows what they’re doing already?

Also why, may I ask, if one of the key tests for granting an ICT is that the imported worker should not displace an established worker, why are increasing numbers of established workers being displaced as soon as possible?

Or if we really can’t supply the skilled staff we need out of the thousands of out of work contractors and the 17,000 IT graduates who can’t get work, just why aren’t UK companies training the people they need from their existing workforce?

Then I read of someone whose freelance colleagues have been told they have to become employees of the agency – not, you notice, the client – at a set maximum salary. Needless to say, they have universally decided that’s not how they want to live their lives and are leaving as their contracts run out. So now they’ve been asked to stay on long enough for their replacements to get their visas processed and receive training and mentoring on how to do the job of the departing freelance.

Kafkaesque, isn’t it?

There are faint glimmers of hope. For example, the suggestion is that you have to pay an ICT at least £40,000 a year – and that’s meant to be a genuine salary, not £20,000 plus subsidised accommodation, flights, and other ethereal additions to make the numbers look good. Although that’s been offset by the threat not to include ICTs in the immigration cap. After all, they’re not going to swap the ICT for a Tier 1 after a while and stay here, are they? Oh, hang on a minute…

The Coalition have been researching and consulting very hard on this whole subject. They have been lobbied by groups such as the PCG who feel they would rather like to hang on to their market, and by others who business model seems to be based on taking that market and moving it elsewhere. I think the policy will make interesting reading. I don’t think, however, that I’m going to like it very much.

Never has that old Chinese curse seemed so totally apt…

Alan Watts can found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Say No to new Japanese Immigration Procedures! by stbeck

Posted in alan's blogComments (0)

Who needs an IT industry anyway?

I’ve written before about the confusion in the debate about immigration and the constant refusal of government and the press to separate genuine immigration from abuse of the system, especially the misuse of the ICT programme. That debate has been raging for a while now and remains unresolved, although we did think we might be getting the message across.

Then, all of a sudden it seems we have a major triumph. We, via our fiends (sic) in Brussels, have just signed a trade agreement with India. Nothing much wrong in that by itself, we need to trade and India is a growing economy. But look a little deeper…

In exchange for India relaxing its import rules so the EU can sell into that market, we have apparently agreed to give their engineers, IT workers, project managers and other skilled trades virtually unlimited access to our market. OK, so it’s a free world and we all have to get work where we can at the best rate we can. But given that India’s official language is English, and there aren’t that many English-speaking countries in the EU – even if you count Scotland – I somehow get the feeling that the traffic in this direction will be rather heavily biased in our direction.

Again, not a problem, except that, as with the ICT scam, these aren’t likely to be long-term immigrants. Some will no doubt be here for a long time, and some will genuinely contribute to the UK economy. But I have a nagging feeling that an awful lot of them will be here to learn how to do the job we’re doing for ourselves and then move it back home where the labour rates are considerably cheaper. That might cut the bottom line but it is a horribly short-term view of things. It won’t take too long before all the real work in IT, for example, is offshored and our service economy – once one of the world’s strongest – has gone the way of the Dodo.

So if this is good news, I would really hate to see a tragedy.

And what really annoys me is that one part of Government is talking about limiting immigration, another part is making positive noises about ICT use and abuse while another part is selling us down the river. Well thanks, guys, great job.

And let’s be clear here. I have absolutely no problem with India or the Indians and never have done. I have no objection to skilled people coming into the country and benefiting us as a whole. I don’t even have a problem with the ICT system, which allows the simple transfer of key staff for shot term purposes.

But I do have a problem with our government doing all they can to close down the industry I’ve been working in for the last 35 years.

Someone has got this badly wrong. And I don’t think it’s me…

Alan Watts can found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: computer monitor by Mediajon

Posted in alan's blogComments (0)

Going up…

A while ago I wrote in another blog about a potential problem with the IT industry in the UK, where the bottom of the career ladder was being rapidly pulled up by the continuing off-shoring of UK jobs. At the time I was just speculating out loud, but some recent numbers have made me think.

For one thing, IT graduates have the highest unemployment rate of all, at around 17%. OK, so IT is notorious at preferring experience to paper qualifications at the best of times, but this is an extraordinary figure when you consider just how much IT work is out there, even in these straitened times.

So where are the IT jobs going then, if not to the UK workforce?

If you look at the numbers of ICTs being granted you might get a bit of a clue. A recent set of figures from the Government gives a very disturbing picture. For most occupations (and the list ranges from medical practitioners to magicians), the trend is actually fairly level; for example, 80 ICTs for electrical engineers in 2000, 95 in 2008. Hardly an issue.

But look at the IT trades – programmers from 290 to 875, Business Analysts up from 255 to 1050, Project Managers from 290 to 1450. The figures stop at 2008, when the rules were changed, but the trend continues upwards: recent figures from the Home Office show a 67% rise between Q1 2009 and Q1 2010.

I agree you have to take these numbers with a bit of a pinch of salt. For instance the 2009 to 2010 increase is for applications, not ICTs actually granted. Even so, it’s clear that the tend is ever upward. What’s more, it doesn’t take long to find job adverts for IT roles at rates that are well under any kind of market value. Say it quietly, but surely people are not advertising roles nobody would take on just to prove they can’t recruit anyone so please can we have an ICT instead? Plus, just to rub some of that salt into the wound, the offshore companies are taking on UK workers as part of an outsourcing deal and then making them redundant at a fair old rate because the work is now being done “elsewhere”.

And what really annoys me is the abuse of ICTs in the first place. These are meant to be used to transfer skilled people for specific roles within a multinational organisation. My experience of some of these workers – and perhaps I’ve just been particularly unlucky, although I rather doubt it – would not lead me to believe these are highly skilled experts in their field. Quite the opposite, in fact.

There is some light, of course. The Migration Advisory Committee is keeping a close eye on such things, and you can’t have failed to notice the debates about immigration and work visas, although this is being coloured by some very powerful companies insisting – against all rational evidence – that they absolutely have to being in people because they can’t find anyone suitable over here already. Well, apart from the 17% of IT graduates and the several thousand people on the bench since their old job got rolled offshore that is.

So as I said originally, the bottom of the career ladder is being pulled up. Which means in about another five years, we won’t have an IT industry and we can all stop worrying about it.

Just for once, I rather hope I’m wrong…

Alan Watts can found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Lost Parody T-Shirt by @my_cine

Posted in alan's blogComments (0)

The Not-so-Silly Season?

Traditionally this is the Silly Season, when the Press have to file stories about singing sheep to fill the papers since there is no real news to talk about. But actually there are not one but two interesting stories to ponder this week, one illustrating how very confused the whole immigration argument has become and the other illustrating just how out of touch with reality the Senior Civil Service seems to be.

Firstly, immigration. A large delegation of politicos, business leaders and sports stars (why sports stars?) led by Mr Cameron has been dispatched to boost our trade with India. Given that they are a tiger economy in their own right, this is probably a good move. Snag is, the Indians and Vince Cable have been talking about opening up the barriers to immigration while everyone else is talking about closing them. Remind me, what is the definition of “Coalition”?

Still, Mr Cable is actually correct; bless him; the ability to allow highly skilled workers in to the country to fill necessary gaps in our native skills is a good thing, not least because we have signed reciprocal treaties that mean we have to do so. Sadly this has got wrapped up with the whole net immigration argument which in turn has evolved from the last government’s unofficial but very real open door policy. We do actually need these skilled people, be they heart surgeons or chefs who understand Thai cuisine. Provided they pay their way and add some value to the UK economy, what’s the problem?

However, before we get all optimistic about them, how about the government looks at abuses of the system first? There isn’t a skills shortage in IT; we have 40,000 IT graduates out of work and hundreds of good applicants for almost every role. Why then, do we allow IT staff to come in on Intra-Company Transfers in their thousands to learn how to do our jobs so they can export them back home?

This is an entirely different issue to the one about net immigration. It would be nice if HMG and the Press could get that difference clear so we can have a reasoned argument about it…
The other interesting story is that the current IT Director for HMRC, a certain Mr Singh, is finishing his three year fixed term contract but staying in post as a freelance through his own shiny new limited company. Instant cries of “Foul” and “Why isn’t he being done under IR35?” arose. Unfairly perhaps, since he hasn’t yet had to fill in a tax form so his position under IR35 is unknown. OK, he’s a classic IR35-caught candidate, and I can’t believe HMRC would let him get away with anything, but he hasn’t done anything wrong yet.

Or has he?

The point of a Fixed Term Contract is that it has a definitive, pre-agreed end date: the clue is in the name. So why, after three years, is there not a suitable replacement lined up ready to go, either from the open market or by promotion from within? Is there really only one person suitable in the whole of the UK? Surely not…

But there’s even more to this debacle…

They are paying Mr Singh as a freelance a day rate equal to around four times his previous salary. HMRC mandarins claim this is to achieve parity with an equivalent Deloitte consultant. Fine, except Mr Singh doesn’t work for Deloitte and so doesn’t have to support myriad partners and office buildings. Nor a sales and marketing team, apparently. So while it‘s good that HMRC accept that freelance workers have greater overheads than employees, something we’ve been arguing about for at least ten years, a little bit of market perspective wouldn’t go amiss. Especially when it’s our money they’re spending.

You could also argue that Mr Singh, having failed to identify a suitable replacement, has significantly failed one of his key duties. After all, had he gone under a bus, clearly there is nobody in the organisation, or outside it, ready to take over. So much for continuity planning then.

We could also query the proper application of the OGC tendering rules for new staff and various other inconsistencies, but let’s not Labour the point more than necessary.
In May I was hopeful that our shiny new Coalition had a clear idea of where they were going and why. I confess I am beginning to have my doubts.

Alan Watts can found found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Their serious sides by tim_d

Posted in alan's blog, ir35 rulesComments (0)

Let’s hear it for the cat herders

It’s been a fairly quiet week this week. There’s been nothing to get me throwing things at the TV or harrumphing over my breakfast newspaper. This is good in a way, of course, especially for the sake of the TV set, unless you have to try and find something interesting to write about…

There has been some good news, of course. The economy is still shaky but from my reading of the runes, it looks like it is slowly heading in the right direction. Although it won’t take too much to throw it all off course again.

One good thing was the PCG winning not one but two prestigious awards from the Trade Association Forum. One was for the revamped website, which has gone from being something of a logistical and visual nightmare to something really very slick. The other was to PCG’s Managing Director, John Brazier, who won the Leadership Award. This was in recognition for the work he has done in getting the PCG to where it is today (and which John sees as a reward to the whole team). Organising an association that is 99% independently-minded freelance contractors – you think I’m bad, you should meet some of my fellow members – was once described as being like herding cats. Clearly John and his team are now fully qualified cat herders.

Also, running on the back of the Coalition’s aim to reduce net immigration, a new consultation has been kicked off. This one is looking at Intra Company Transfers, and should they be in the scope of the overall cap on immigration figures.

This is actually something of a tricky one. Clearly the influx of comparatively low-skilled IT workers, brought in under ICT Visas in preparation for moving swathes of UK-based work out of the EU, is not something we want to perpetuate. On the other hand, you have to accept that companies do need to be able to move skilled specialists around the world. Plus, of course, it’s not all about IT and engineering; the reach is far wider, from medical staff to trained Thai chefs.

So an interesting challenge to come up with an fair solution. The survey can be found at the rather snappy website, surveymonkey.com (I guess they won’t be in contention at next year’s awards…). Please take a look if you want to contribute to the debate.

Meanwhile I’m still on the hunt for the next contract. I’m actually getting calls back from people and there are certainly more jobs out there than there have been, but it’s a slow old process. And a frustrating one; too many agents seem to have lost the ability to read a CV and relate it to a real job these days. If I have to answer seriously inane questions like “How many years as a Project Manager have you done?” one more time I’ll not be responsible for my actions.

Then I was promised two call backs from people promising to take a more proactive approach to selling me to the clients, rather than waiting for the right job to come along. You know, a bit like agencies used to do 15 years ago. Needless to say, neither has been in touch.

Actually the agencies themselves understand the current system is rather sub-optimal (to say the least). They are increasingly turning to networking sites like LinkedIn to find people. This, if you’re a bit of a dinosaur like me, leads to a degree of a culture shock. I’m really not too sure I can mix it wiv da kids in da cyberhood, man, innit.

Still, nothing ventured, nothing gained. Looks like I have some work to do!

Alan Watts can found found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: 3 Cat Cupcakes by clevercupcakes

Posted in alan's blogComments (0)

Budget? What Budget?

There was quite a lot of minor change in the Budget, and we should praise the intention to focus on helping businesses with a raft of measures, but for us one man consultancy companies there was actually nothing of very much interest in there. With VAT, Corporation Tax and allowances all staying the same, there will be almost zero impact on most of us.

A lot of the business friendly things won’t really impact me, of course. I don’t pay business rates since like most freelances I am something of a nomad. I don’t have a lot of capital expenditure so changes in Investment Allowances are immaterial. I welcome the intention to increase access to HMG contracts by 15%, but that’s not happening until the end of 2010.

So all in all, something of a non-event.

Unless, of course, you are using one of the more imaginative payment schemes. There is a strong anti-avoidance programme tucked away in the detail – that’s all the things that Darling Alistair doesn’t burden his audience with in the House – some of which will impact some freelance workers. For example, payments via loans will be shut off by the simple expedient of making the loan write-off liable to CT and hence uneconomic. There is a clear message that EBTs in all their forms will be closed off. Add to that some additional international taxation treaties (including one with Belize, stamping ground of Tory donor Lord Ashcroft. Funny, that…) and a re-emphasis of the rules of Double Taxation; clearly some people are going to have to rethink how they manage their money.

And of course, tax allowances have been frozen which is, as Osborne pointed out, just another Labour stealth tax. Darling’s justification made me smile as well. The indexation is based on the previous September’s inflation rate, which just happened to be negative. “Reducing them would be daft” said Alistair. Really? I think it would have been entirely fair, since those are the rules. Heigh ho…

Away from the Budget and there was another major piece of news that, perhaps surprisingly, has gone largely unnoticed. As a result of campaigning by the PCG, there has been a bit of a rethink on the rules surrounding ICT visas. These are the route that some companies are using to bring non-EU workers in to displace more expensive (allegedly) UK workers. The parameters have been significantly tightened, some taxation loopholes closed off and the original Tier 2 split into three distinct classes. The net result is that imported ICT-based labour will be less economical to use, easier to limit and more difficult to bring in.

These changes actually go farther than the PCG was asking for, which was a welcome if slightly surprising result. It is however a vindication of the power of effective lobbying and, incidentally, an indication of how much clout the PCG is beginning to assert. Well done to them, says I.

Of course, like the Budget itself, it remains to be seen exactly how effective these measures prove to be in the real world. But at least the ICT changes have a decent chance of surviving the next election and achieving tier aims, which can’t really be said about Darling Alistair…

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: yawn.jpg by Toni Verd

Posted in alan's blog, tax avoidanceComments (0)

IT Contractors and Intra-company transfers

The controversial subject of intra-company transfers was raised again this week by The Recruitment and Employment Confederation (REC). It has continued it’s campaign for a ‘level playing field’ for UK contractors and freelancers since the issue was first reported by the PCG last year.

Several leading contractor accountants have already voiced their disapproval at the use of ICTs, which involve the transfer of an overseas employee to this country at the expense of UK workers. According to the REC, more robust regulation of ICTs is needed to protect UK based contractors and freelancers who may have been either overlooked or worst still replaced for a contract role as a result of an ICT arrangement.

During it’s presentation on Employing and Vetting non-UK Nationals, the REC raised several issues with Tory minister Damian Green, with particular reference to the higher end interim recruitment market that often associated with IT contractors.

The REC’s external relations director, Tom Hadley, welcomed Damian Green’s assertion that the existing regulations governing the use of ICTs will be reviewed under a Tory government to safeguard the future of the interim worker in this country.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Pretty Dead Fly on the Window Sill by Amarand Agasi

Posted in newsComments (0)

  • Switch Accountants for FREE

    Switch Accountants for FREEAt K&B Accountancy Group we have introduced a simple and straightforward approach to changing accountants. We’re offering contractors, consultants and freelancers the opportunity to switch to K&B Accountancy Group for FREE without the need to pay for any ‘catch up’ or retrospective accountancy fees for the previous year’s accounts and corporation tax return* *T&Cs apply

our top 5 twitter posts


contractor accountants


twitter Join the conversation
Free Telephone Advice