more crackdowns on contractors expected

Soldato
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I don't think you should be offering a comment because don't you purposely not draw down over a certain amount from investments to avoid paying back student loans?

amigafan2003, please report to the burns ward

MPs must be thinking "how dare these people work outside of the regular 9-5 routine, regularly earn more than their intellectual peers and get away with not paying through the nose in income tax". They should take a look in the mirror, imo
 
Soldato
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amigafan2003, please report to the burns ward

MPs must be thinking "how dare these people work outside of the regular 9-5 routine, regularly earn more than their intellectual peers and get away with not paying through the nose in income tax". They should take a look in the mirror, imo

That is what gets me, MPs can claim expenses seemingly ad infinitum but a self employed person can only claim expenses for two years maximum. Then they bring in changes to restrict travel and subsistence whilst they claim for everything under the sun.
 
Caporegime
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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

Not sure if he will still be affected. I suspect he works for loads of companies anyway and shouldn't be classed as an employee. Also the price work thing was the golden test as to be self employed there is meant to be an element of risk. If he quotes £500 for a two day job and it takes him 4 days then that's his risk. The president blew I've always seen is contractors working for years for one company and billing them a daily charge. That's paying per hour worked and no risk. They always should be an employee imo.

The problem with the approach that the government is using is that your friend might get affected even though the new rules were never meant to deal with him. But we will have to wait and see what the details are.
 
Soldato
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Not sure if he will still be affected. I suspect he works for loads of companies anyway and shouldn't be classed as an employee. Also the price work thing was the golden test as to be self employed there is meant to be an element of risk. If he quotes £500 for a two day job and it takes him 4 days then that's his risk. The president blew I've always seen is contractors working for years for one company and billing them a daily charge. That's paying per hour worked and no risk. They always should be an employee imo.

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The problem is most client cos will not let you engage directly because they have their preferred suppliers list, thus you have to go through the agency and hence being paid by the hour.

There is also a world of difference between how you work for a client co which should make you an employee. If someone works for a client co as a company providing a certain skill set to deliver a work package and is genuinely working as a company providing that service, it is vastly different to a person who is doing as they are told, doing what ever work is given to them and getting paid to sit around whilst not having any work to do. That was why the whole disguised employee thing came into being in the first place.

This proposed idea takes that distinction away and destroys the notion of contracting for companies that have engineering design cycles that last for more than a month if the Guardian article is to be believed. It's just not credible to have contractors for engineering under those terms.
 
Don
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It makes the UK less competitive in delivering major engineering projects for sure.

Was interested to note that the government is running export adverts at the moment. Plenty of work for engineering expertise in Pakistan apparently.
 
Soldato
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It makes the UK less competitive in delivering major engineering projects for sure.

Was interested to note that the government is running export adverts at the moment. Plenty of work for engineering expertise in Pakistan apparently.

Absolutely, if they want contractors to pay more tax then fine make them pay more tax. Don't do a moronic fudge and make everyone into employees unless they can complete work packages in less than two months
 
Permabanned
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whilst my colleague is a locum social worker earns lots more than I do for the same job due to a tax efficient ltd, there also lots in this sector getting screwed by IR35 as professional supervision is a core element of practice. its a big risk especially as the witch hunt begins.
 
Associate
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Absolutely, if they want contractors to pay more tax then fine make them pay more tax. Don't do a moronic fudge and make everyone into employees unless they can complete work packages in less than two months

Agreed, the project i am working on is now at 24 months, and should be completed by years end. As of now i cannot claim my travel and digs but i can't just abandon it so close to the end.
 
Soldato
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It makes the UK less competitive in delivering major engineering projects for sure.

Was interested to note that the government is running export adverts at the moment. Plenty of work for engineering expertise in Pakistan apparently.

Why?

Most engineering consultancy firms at least will have massive overheads irrelevant of employee salary
 
Don
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Why?

Most engineering consultancy firms at least will have massive overheads irrelevant of employee salary
Not really, contractors are completely billed to a project and when there's no project they're gone. The remaining staff then become an unproductive overhead when they're sat waiting for new work. If everyone is staff that burden becomes even greater. Foreign companies won't suffer the same inflexibility...
 

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D

Deleted member 66701

I don't think you should be offering a comment because don't you purposely not draw down over a certain amount from investments to avoid paying back student loans?

Yeah (or I will do when the loan becomes repayable after I graduate), but I'm not a contractor so :p
 
Associate
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In one of my previous employments, I was part of a software development team that had mostly contractors and a few permies. We were all doing the same job, except that the contractors got paid significantly more and paid proportionally less taxes, some had been there for 7+ years. When permies racked up enough years, they would go contracting at one of our competitors where they also basically had the same setup.

This wasn't really specific to the software development team I was in, colleagues from other teams told me their teams worked the same way, and as far as I know, it's pretty common practice.
 
Soldato
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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

Strictly speaking it depends on what that contractor is doing that determines if it is treated as CAPEX or charged immediately to the P&L.

In my place we have certainly cut back on contractors for day to day to day work. Obtaining the right skill-set for certain project work invariably means looking externally and that industry is mixed with big business for a solution and consultants in the design phase.

My own view is that consultants receive elevated rates to reflect their lack of permanence. Creative expense allowances can result in low effective tax rates that simply take the proverbial and this is what needs to be nipped in the bud.
 
Soldato
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So, you can only get a job as a contractor because the firm doesn't want to pay for a full time employee. A contractor pays an insane amount of NI PLUS employers NI and is allowed to offset for mileage AGAINST TAX THEY ALREADY PAID and the ignorant still come out with statements congratulating the government for "clamping down"

Trust me, I have only ever wanted a perm job, but when the only jobs are contracts or the only perm jobs require an MCSE or CCNA and pay 18K, there isn't a lot of choice.
 
Soldato
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I know of a contractor who has been at the same place for >10 years, apparently they just change the company name and take a break between contracts, work on different cost centres etc. Takes the **** really.
 
Soldato
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Not really, contractors are completely billed to a project and when there's no project they're gone. The remaining staff then become an unproductive overhead when they're sat waiting for new work. If everyone is staff that burden becomes even greater. Foreign companies won't suffer the same inflexibility...

Principally you're agreeing with my point. There's a profit margin over 100% on a standard staff member. Its swings and roundabouts and there's a need for both.
 
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