Brexit: to deal or not to deal for the sake of the UK tech industry?

By Hannah McMillan-O'Brien

The important thing to remember in all the information that is published about Brexit, and in reading this blog, is that as an EU developer looking to gain employment in the UK the best time to move is before 2020 but you have until 2022 when the transition period is set to end.

Letter to the Nation 

Following Theresa May’s public address in the letter to the nation there has been an outcry surrounding her proposal. For the next two weeks the UK is on tender hooks while we wait for our politicians to complete the marathon of 8-hour day talks to come to a final decision on the 11th December.

The first point addressed in the letter states: “We will take back control of our borders, by putting an end to the free movement of people once and for all. Instead of an immigration system based on where a person comes from, we will build one based on the skills and talents a person has to offer”.

If May is successful in passing this agreement, then it is set to kick off at the start of 2021. In the meantime, while the UK and EU debate their future relationship we will continue to honour the free movement of people. This will continue into the transitional period after March 2019, provided that parliament approves the UK and EU’s withdrawal agreement.

The tech industry in the UK accounts for 80% of the British economy and trades over £400 billion each year. In a previous blog we touched on the UK “as the leading tech hub in Europe” which we can happily report currently has not suffered. However, since the announcement of the UK vote to leave the EU in 2016 many market leaders have warned that the UK does stand to suffer in the event of a harsh Brexit that leaves the nation disconnected from the European economy.

To deal or not to deal? 

Granted the majority of the public are still holding out for a new referendum and for the UK to remain in the EU, unfortunately at this stage is an understandable but ultimately unrealistic option. Despite it being by no means perfect, faced with the two sides of a deal or no deal for the sake of the UK’s successful tech sector the prime minister’s deal is the most realistic way forward.

The reason being it delivers the three main things that the tech industry desperately needs to hang on to: market access, high-skilled labour and rules on the transfer of data. Under the deal, the UK and EU would work together to facilitate data flows and tackle any unjustified data localisation barriers that disrupt businesses by setting rules on where data must be stored and processed. With the deal there would be no immediate disruption, instead a strategically designed decoupling.

How can Strategic help? 

As it stands Non-EU citizens are required to earn a £30,000 salary to secure work approval in the UK. Post Brexit, the government has promised to extend the same visa rules to EU workers. Luckily Strategic People have built a loyal portfolio of tech companies who offer this as a minimum for highly skilled workers, such as Software Developers. As an example, we’ve found in 2018 that for Front End Developers (permanent roles) with more than 4 years’ commercial experience, salary packages have ranged between £50,000 – £85,000.

Matthew McKenna, Strategic’s Head of Perm, offers the following advice for developer’s actively seeking positions in the UK, “Get in touch with Technology Team here at Strategic People! Our experts will give you an in-depth overview of market trends this year, what the interview process will look like if you decide to proceed with applications and then how we can help with elements involved in relocating to the UK. The best feature about this all – our service is completely free to every single candidate!!”

If you’re a developer seeking employment in the UK, please check out our live jobs here.

For full details on how we can assist in your relocation process, please get in touch with our dedicated tech team here.

 

IR35 Private Sector Changes in April 2020 – What happens now?

By Hannah McMillan-O'Brien

The Chancellor revealed in his 2018 Budget that the IR35 ‘off payroll’ rules will be extended to the private sector from April 2020 onwards. Simultaneously, affecting a large number of contractors and businesses across the UK. What does this specifically mean, and what can contractors and hirers do to prepare in advance?

What does IR35 private sector rules mean?

 The Intermediaries Legislation (IR35) has been around since 2000 with a very simple agenda: to remove the tax advantages of providing services via a limited company for individuals who are not truly in business on their own account. In other words, the rules are aimed at ‘disguised employees’ who fill the responsibilities of a permanent position in a company without paying the corresponding income tax and National Insurance (NIC) contributions a traditional employee would.

Despite numerous amendments to IR35 over the past 18 years, each Government has battled with the claim that too many limited company owners are still illegitimately working outside the rules.

Back in 2017, IR35 was introduced for contractors working in public sector organisations. Instead of contractors themselves being responsible for determining their IR35 tax status, the hirer took on this obligation. Where the contractor is found to be ‘inside’ IR35, the hirer must deduct employees’ NIC and income tax from the contractor’s pay, as well as paying employers’ NIC.

Since, the process, tools and systems in place for hirers to determine contractor’s IR35 tax status have been widely criticised. In 2017, Dave Chaplin, CEO of ContractorCalculator, who has covered the legislation from inception declared that IR35 should be suspended without delay, to prevent further damage to essential public services. HMRC themselves have admitted that the CEST tool they developed to assist with the decision making does not meet the standards of ‘reasonable care’, therefore it can be difficult for hirers and agencies to determine an accurate tax status of an individual contractor. 

What happens Next?

Regardless of the warnings the Government moved with their plans for IR35 private sector implementation, but have delayed it to 2020, rather than 2019, in the hopes that this time people will have more time to prepare. A consultation on how the rules will be rolled out in practise is expected to be launched early 2019. 

Within that preparation time, hirers and agencies are expected to take ‘reasonable care’ when dealing with each contractor’s tax status. The hope is that in the consultation, the true meaning of this will be clarified. In the meantime, the best action is to learn from the mistakes made in the public sector. Companies who panicked and made brash decisions to blanket define their staff as ‘isndie’ or ‘outside’ IR35 have since been wildly criticised. Despite the additional admin work, the best practise is to analyse each contractor individually to determine the tax status.

How can we help? 

Quite rightly, hirers are looking to their agencies to assist them with this new compliance challenge and the better agencies are now beginning to prepare their clients for the new rules.  The starting point is to understand the new rules and to understand the current profile of your existing contractor workforce.  To help with this Strategic People is trying to be proactive in our approach of educating our clients and contractors on the changes.

Luckily, we are well educated in the legislation and have a dedicated team offering to assist in the preparations. In order for us to support our network through the process of determining Contractor’s tax status, we would need some further information from the individuals and would like to set aside time to gain a fully comprehensive understanding. If this is something that you would be interested in, please email us here and we’ll be in touch to arrange. 

We’ll also be hosting an event in January 2019, where we’ll share, alongside an industry expert guest speaker our thoughts, plans and actions for IR35 initiation. For updates on this event please follow our page

Diversity in the Face of Adversity

By Hannah McMillan-O'Brien

Since the controversial vote for Britain to leave the EU, much of the population has been fixated on following the political developments intently. There have been predictions of the brain drain, of universities suffering and  investors shunning UK start-ups. The decimation of the value of the pound and the real concern that the UK will be punished for having the audacity to leave the World’s largest free-trade zone. However, regardless of individual views on Brexit, a democratic process has taken place and the demos have spoken. It remains to be seen whether 52% of the British public were right to take a historical plunge.

Is Al sexist?

In the meantime, while politicians wrangle with one another and ideologies clash, the rest of us have to get on with our lives and make the best of the hand we have been dealt. With that in mind, the tech industry is on a mission to encourage more women to join the rage. Experts are considering the dangers of having a lack of diversity in technology teams. The year 2018 was declared “The year of the Woman”, and yet women in the tech sector are still facing unconscious bias, gender pay gaps, a lack of role models and the development of sexist Al.

The development of Artificial Intelligence Technologies has been accused of creating biased Al algorithms because it lacks the ability to consider both front end and back end systems simultaneously. The teams aren’t focusing on the end user who will be navigating the services. Therefore the industry has suggested that embedding Al into our lives will encourage a more diverse range of people moving into development roles. As a starting point for making Al industry more inclusive, more women should be encouraged into Science, Technology, Engineering and Maths (Stem).

“The year of the Woman”

Back in March, the theme for 2018’s International Women’s Day was #PressForProgress and in the tech sector, which has previously been male dominated, some firms started to push back for greater diversity. CA Technologies rolled out unconscious bias training for all of its managers.  Organisations including the UK government are signing the Tech Talent Charter to establish guidelines around diverse tech hiring and the Trainline has partnered with Code First: Girls to teach 20,000 women to code for free by 2020.

Traditionally, diversity in the workplace has not been a
top priority of many employers, defending the notion of business is business
and companies must make money to continue operating so why fix something that
isn’t broken? We have seen this situation significantly change for the better
in recent times, not just in terms of bridging the gender gap across the
diversity spectrum; people from all backgrounds, of all genders, of all ethnic
minorities, of all sexual persuasions and people with disabilities have seen
increased empowerment and had the chance to maximise their potential and gain
career progression in a way that was previously impossible.

Most importantly, as people of the UK, a population bound together by citizenship and cultural ties, we each have a duty to ensure progress is not sacrificed in favour of profit-based protectionism. In this crucial time of uncertainty, it is strongly believed that everybody must now turn their minds to innovation, progress and development in order to keep the country on track as a world leader in liberalism, tolerance, business, education and social stability. We should accept collective responsibility for our futures and ensure, for ourselves, that the country we live in boasts a fair diverse system.