more crackdowns on contractors expected

[jimjamuk]

I would just do away with the dividend relief if I were the Gov so effectively everything would be the same rate as PAYE - then the "extra" money a contractor would get can then be spent on pension, insurance, accountants etc so contractors can keep their way of life but pay the amount of tax the Gov wants from us.

The current proposal is way over the top and would wipe out a whole sector of flexible workers but then maybe this is the plot - paint the worst picture and then when they introduce something less onerous it'll be taken as a win

 

[jimjamuk]

Interesting, from the company's point of view what is the risk of a self-employed contractor compared to agency/umbrella ? Surely they just want the best person for the job ?

Most of the time this setup is because the end client cant be bothered to do the leg work and look for contractors directly as they would then need to negotiate and sort out individual contracts between parties - they just farm it out to 2 or 3 preferred agencies and pay their slice for finding someone (normally 10-15% of the daily rate). The end client will still interview those candidates that get through the agency filters for the role although agencies can be a bit cack.

 

[Kemik]

This has been brewing for years. Personally I think it's a bit misguided. If they managed to stop all tax efficiency in single person companies, would it recover as much tax as reclaiming the tax from one Starbucks company?

Corporate tax really isn't a very large percentage of the total tax income. The game is increasing the number of jobs as that generates far more taxes.

 

[Skeeter]

Corporate tax really isn't a very large percentage of the total tax income. The game is increasing the number of jobs as that generates far more taxes.

Yeah but cracking down on a few million people avoiding a few tens of thousands of tax is hardly a massive amount is it.

 

[Schlong&Stable]

I pay tax, Just them taxes are then re-used nicely into paying for my fuel and tools i require to do various jobs.

Don't hate it because you can't do it. If we could all screw the taxman im sure we would, it won't last forever and we will all move onto the next legal loophole. When your working 40-60 hours contracting for someone who counts you as a number not an employee i think we deserve something.

Wait, what? It's not societies responsibility to compensate you for that choice. You ought to be making a net contribution like the rest of us.

 

[Bear]

Wait, what? It's not societies responsibility to compensate you for that choice. You ought to be making a net contribution like the rest of us.

Give over, only a minority of tax payers are net contributors for a start, secondly contractors avoid paying tax not pay no tax, therefore you can be a contractor and still be a genuine net contributor.

 

[Tuppy_Glossop]

Give over, only a minority of tax payers are net contributors for a start, secondly contractors avoid paying tax not pay no tax, therefore you can be a contractor and still be a genuine net contributor.

Not all contractors avoid tax.

 

[Kemik]

Yeah but cracking down on a few million people avoiding a few tens of thousands of tax is hardly a massive amount is it.

It's quite a small, easy change to make to bring in a large amount of money compared to an ongoing OECD project to re-write the International Tax rules to go after the companies previously referred to.

In my mind, the laws for the international companies have always been there. HMRC was just too lenient on some companies who abused the rules.

Unfortunately the media don't help with understanding that you don't pay tax on revenue, you pay it on profits. The allocation of expenses and therefore profits are the things that determine the profits.

For Amazon, as an example, they had all sales going through a Luxemborg or Irish company (if I remember rightly). The UK was then just a service provider. The new rules prevent this from happening so they need to change. However, the UK still does very little to actually contribute to Amazon's overall profit it makes on the products it sells you. Most of the work is on its software/website which automatically calculates the pricing, manages supply chain, etc.

Putting a product in a cardboard box isn't exactly revolutionary so the UK shouldn't be remunerated very highly. That's the problem, people see £5bn of sales to UK customers and think they should pay tax on 100% of the profit Amazon generate on that sale in the UK, which isn't reflective of the huge value adding development team they have in the US for example. It's all about determining how much value each country contributes to the whole Amazon process.

 

[dowie]

Because they normally expect people to live relatively close to where they work, not at the other end of the UK in my case. I'm well aware that isn't the case for all contractors though

that isn't a reason...

so what if you don't live close by - that doesn't have to affect your status as an employee or a contractor

fact is you're working there for years - you're basically an employee in all but name - you're exactly the sort of person this is aimed at and rightly so

 

[dowie]

What would happen to all those overseas contractors they bring in from india etc.?

nothing, they're not mostly working for their own companies - they are already salaried employees of the consulting firm

 

[dowie]

Also you will find that contractors are normally paid out of project funds as a cost to deliver that project - that equals CAPEX

Permies are normally a part of the ongoing costs of running a company and are paid out of OPEX

CAPEX are almost one off costs that are accepted and signed off to get something delivered so you cant just say offer the same role as a permie as that costs is ongoing when a projects finishes and you can imagine the outcry if companies just fired and hired people on a whim

well you can still bring in people on a short term basis - just not one man band companies - there is obviously going to be a market for small consultancy firms

the issue is people who aren't short term but are basically employees

 

[Unicorn]

Wait, what? It's not societies responsibility to compensate you for that choice. You ought to be making a net contribution like the rest of us.

My contributions are still there as i said earlier, they are just small as im one of the ones who happily works 60 hours a week and commutes miles and miles. Which in turn gets me 45p a mile (up to 10,000 a year) , 15 pounds per day (12 hour rate) food allowance, any expenses for work related tooling equipment, ppe etc i need, my phone bills paid for as there for work only, plus my overalls washing at the set rate per week.

It isnt lots when u look at it but u can just about cover your daily tax bill if your working 2 hours away from home, working 10 hours also giving me 14 hours a day out my house which entitles me to all the above.

Give over, only a minority of tax payers are net contributors for a start, secondly contractors avoid paying tax not pay no tax, therefore you can be a contractor and still be a genuine net contributor.

This, we pay but we get it back cos of what we do.



I wish it was all swings and roundabouts but most Umbrella users are purely agency and contract staff, I myself am Agency but that is were all the work is at this time of year!

More on the topic of the actual subjects being discussed, I am against agency staff being used for 18 month periods before they are actually moved onto a companies payroll. Its a kick in the teeth as its abused a lot. I know lads its been done to promised payroll and permie within 6 months, delay after delay..

 

[Bear]

that isn't a reason...

so what if you don't live close by - that doesn't have to affect your status as an employee or a contractor

fact is you're working there for years - you're basically an employee in all but name - you're exactly the sort of person this is aimed at and rightly so

I never said distance makes a difference to whether you are an employee or not. Under HMRCs own rules my working practices says otherwise, so your fact stands for nothing as you quite clearly don't understand what you are taking about. My day to day working practices are not like employees at all which is the test for IR35

 

[dowie]

I never said distance makes a difference to whether you are an employee or not. Under HMRCs own rules my working practices says otherwise, so your fact stands for nothing as you quite clearly don't understand what you are taking about. My day to day working practices are not like employees at all which is the test for IR35

you're just mentioning irrelevant stuff though, there isn't anything special to understand or at least you've not done a good job of higlighting anything, you're welcome to point out anything that has been missed - so what if you work far away or supposedly have some unique working practice? - what difference does that make to you being able to, having worked somewhere for years, be treated like an employee - the only thing it seems to point to as a hurdle is a lack of flexibility on the part of your employer

 

[Bear]

you're just mentioning irrelevant stuff though, there isn't anything special to understand or at least you've not done a good job of higlighting anything, you're welcome to point out anything that has been missed - so what if you work far away or supposedly have some unique working practice? - what difference does that make to you being able to, having worked somewhere for years, be treated like an employee - the only thing it seems to point to as a hurdle is a lack of flexibility on the part of your employer

If you think the legal definition by HMRC of a disguised employee is irrelevant to the dicussion of whether to treat a contractor as an employee or not the I'm not going to waste my time on a dime bar moment for you.

 

[dowie]

If you think the legal definition by HMRC of a disguised employee is irrelevant to the dicussion of whether to treat a contractor as an employee or not the I'm not going to waste my time on a dime bar moment for you.

this is just more waffle - the thread is about proposed changes so yes the fact you're IR35 compliant at the moment is irrelevant

you've not pointed out any good reason why your current employer can't treat you as an employee so far - all you've pointed out is that you're paid a high amount and live far away and that you currently comply with IR35 - so what?

fact is if you've been working there for years you probably should be an employee

 

[Bear]

this is just more waffle - the thread is about proposed changes so yes the fact you're IR35 compliant at the moment is irrelevant

you've not pointed out any good reason why your current employer can't treat you as an employee so far - all you've pointed out is that you're paid a high amount and live far away and that you currently comply with IR35 - so what?

fact is if you've been working there for years you probably should be an employee

Sorry in that case then I have misunderstood the point you were originally making, will teach me to try an do too many things at the same time.

Yes under the proposed rule changes, there is no reason under the new terms why my client cannot treat me as an employee. If they are flexible enough to compensate me in a way that doesn't upset the apple cart in terms of their wage structure then all good.

 

[gary996]

A friend of mine owns his own electrical company. He does not work (manually) just office bits and site meetings. He has 1 apprentice on the cards. The rest of the crew who permanently work for him are self employed 8 in total. They just invoice for price work and this is meant to get round it

 

[Jonnycoupe]

Or you could just pay tax like everyone else then not feel you're taking the mick using the roads, schools and hospitals we all enjoy.

Do you put £600 a week into the treasury then?

 

[Bear]

Do you put £600 a week into the treasury then?

It doesn't matter how much you pay the treasury, it's the fact you are able to reduce the amount you pay and he can't is why he has a problem with it.