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The All Things IR35 Related Thread

Discussion in 'Careers, Employment and Professional Development' started by NVP, Aug 23, 2019.

  1. BUDFORCE

    Wise Guy

    Joined: May 3, 2012

    Posts: 1,848

    Nope.

    Shareholders own.

    Edit: can be the same person/people, not necessarily though.
     
  2. jonneymendoza

    Capodecina

    Joined: Apr 7, 2008

    Posts: 16,019

    Yea sorry I was going to edit my post
     
  3. Burned_Alive

    Capodecina

    Joined: Oct 18, 2002

    Posts: 11,605

    Location: Cheshire

    Went permie in 2017 because I knew this would eventually be introduced and combined with brexit uncertainty would cause problems in the market.
     
  4. thenewoc

    Soldato

    Joined: Mar 9, 2012

    Posts: 5,732

    Location: West Sussex, England

    The real problem is the agencies, absolute cockroaches, worse than estate agents by some magnitude. If companies start advertising their own roles it could have a delicious effect on the agencies.
     
  5. BUDFORCE

    Wise Guy

    Joined: May 3, 2012

    Posts: 1,848

    No worries, to be honest the vast majority of IT contractors are just one and the same single person director/shareholder setups.
     
  6. elmarko

    Capodecina

    Joined: Sep 22, 2011

    Posts: 10,430

    Location: Portsmouth (Southsea)

    Highlighted a key part in bold.

    Surely if anything this proves you were essentially a perm employee in everything but name & tax?. Having a 10 year stable job at x3 the salary of the perm people doing the same work while paying less tax is clearly not as it was intended.

    Personally I couldn't be more glad for this change, as a perm member of staff who works with a myriad of contractors getting paid x3 for the same work (none of which perform any better than our perm staff) was damaging to staff moral & bled our departments finances dry.
     
  7. Steedie

    Man of Honour

    Joined: Jun 29, 2004

    Posts: 20,112

    Location: Oxfordshire

    As a contractor myself, I just can't understand how people sit in contracting roles for years and years. It's bonkers and they are, or were putting themselves at risk of an audit as it couldn't be clearer they are perm in everything but name. My last place, albeit in a different department, had a couple of contractors working for them, also for 10 years. Just mental. And the only reason they were there that long is they'd put themselves in that situation and couldn't get rid of them, as they were the only ones with the knowledge to do that job.
     
  8. ChrisD.

    Capodecina

    Joined: Sep 20, 2006

    Posts: 24,105

    I really don't think it is, unless there's some form of tax evasion going on or a contract which allows an unusually high amount of expense claims. After taking away corporation tax for a 20 working day month that leaves £10530, I don't see how you can get away with taking over 70% from that without something dodgy going on.

    So none of that £6600 was going into a savings account in order to pay for self assessment? There's a difference between what does into your bank account and what's actually take home.

    I've never understood the 'get a new accountant' remark. Doing books is very easy, and beyond taking a salary under the threshold, taking as many expenses as you can, there is no way of getting around the dividend tax rates. Unless it's some dodgy hairy arsed disgruntled ex HMRC accountant where most things wouldn't stand up to scrutiny in court.
     
  9. jonneymendoza

    Capodecina

    Joined: Apr 7, 2008

    Posts: 16,019

    TBH its people like the guy you posted that are partly to blame for taking advantage of outside ir35 contracting.

    Me, the most i have contracted in one place is 2 years and that was one time only. i try to folow the rules of being different to a perm staff by using my own equipment, working whenever i want and wherever i want, not engage in any client events etc etc.

    It only takes a minority to ruin it for the rest really
     
  10. Steedie

    Man of Honour

    Joined: Jun 29, 2004

    Posts: 20,112

    Location: Oxfordshire

    That £6600 is the figure after I've put away money for my self assesement...
     
  11. ChrisD.

    Capodecina

    Joined: Sep 20, 2006

    Posts: 24,105

    So you were able to take home £6600 a month from a business income of £8100 (after 19% corporation tax) in a 20 day month?
     
  12. Hades

    Capodecina

    Joined: Oct 19, 2002

    Posts: 23,948

    Location: Surrey and London

    Permie here too. I think you're getting upset at the wrong person. Quite aside from the amount of tax being due, you seem annoyed that your employer was paying someone three times the salary for the same work. Why on earth didn't you become a contractor there? You would have the exact knowledge and experience they need. Trust me, most employers show very little loyalty to any employee when it comes time to reducing the workforce size.

    Presumably your employer was offering you some other benefit which made you happier to stay a permie rather than go contracting and earn more money. E.g. a perceived stability**, holidays, sick pay, pension, etc.




    **Permie jobs are no more secure than contractor roles. They just appear to be more stable to the staff.
     
  13. jonneymendoza

    Capodecina

    Joined: Apr 7, 2008

    Posts: 16,019

    i dont think some people here really understand the amount of tax outside ir35 contractors pay.

    It realy is similar to what a perm pays, infact contractors potentially pay more tax then your average perm.

    People are forgetting that most contractors are sole shareholders of the LTD and thust they pay the corporation tax from the company and then from there personally account, thet pay self assessment tax. If that person goes over 43k, they pay about 30-40% tax afterwords.

    So at best, a perm earning 70-80k is no worse than a contractor earning say 500pd working 11-10months a year and staying under the 43k threshold.

    Yes a LTD/contractor gets 3x the money but they certainly cant spend 2/3 of that even or they pay same tax as a perm.

    THE MAIN advantage of getting paid 3x the salary is for rainy days when your on the bench or decide to take a leave/holiday for a while. That is when the benefits are reaped, not so much now at present.

    And for certain industry like IT prgramming, its good to jump ship once a year or twice a year, be it perm or contract.

    If i go perm this year, i will not stay in the same place for 10 years lol. i will certainly still jump ship to further my exposure to different technologies, enviornments and get more salary/raise from doing so.
     
  14. jonneymendoza

    Capodecina

    Joined: Apr 7, 2008

    Posts: 16,019

    Yup sounds about right. you can take up to 43k each year for about 7-10% dvidends tax? plys about 8000-9000 a year in salary and thust your amount u take out sort of fits the bill
     
  15. jonneymendoza

    Capodecina

    Joined: Apr 7, 2008

    Posts: 16,019

    Question. Does any other country in europe have a "ir35" type rule or is contract market outside of the UK pretty much dead?
     
  16. Jokester

    Don

    Joined: Aug 7, 2003

    Posts: 39,969

    Location: Aberdeenshire

    There’s absolutely nothing in employment law that limits how long you can be a contractor for at one client if other conditions are met.
     
  17. NVP

    Soldato

    Joined: Sep 6, 2007

    Posts: 7,195

    Not my problem. If they wanted to employ me alongside the other employees they could have asked.
     
  18. Steedie

    Man of Honour

    Joined: Jun 29, 2004

    Posts: 20,112

    Location: Oxfordshire

    Absolutely not, if your contract puts you outside IR35 at the start, and working practices match, then it will still be outside however long you stay there. But being somewhere 10 years does suggest you aren't really contracting and I'd bet that working practises don't match the contract you signed
     
  19. Hades

    Capodecina

    Joined: Oct 19, 2002

    Posts: 23,948

    Location: Surrey and London

    I disagree it's not your problem. If the HMRC wanted to investigate it would be a strong indicator that you and your client were avoiding tax. If they find that's the case then it could result in a very big bill and fine which would be immediately payable. As mentioned by jokester there is nothing in law which states a contract duration. But it is an indicator that you may have been a disguised employee.
     
  20. Steedie

    Man of Honour

    Joined: Jun 29, 2004

    Posts: 20,112

    Location: Oxfordshire

    I will double-check, I could very well be wrong but I'm pretty sure that was the case.