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ccc

IR35 - private sector

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Any bods on here contract ?

Lots of rumours that the budget will introduce similar new rules that were brought in for the public sector last year.

That apparently caused mayhem.

Nobody knows what would happen re. agencies etc if this does happen.

However if there is a blanket "You are within IR35" it could change the contract market hugely.

I've just done and online calculator and an 18% take home reduction.

:o

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Yep, contracting away.  TBH I haven't look into to the repercussions if spreadsheet Phil does.  18% is massive!

I have been doing things like having different sources of payments to my company account rather than just invoicing the same source ever month.  I have small amounts coming in from a couple of websites.

 

@ccc what you are reading is the day of the Contractor coming to a end?

Edited by montecristo

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I really hope they don't do this but I have no faith on the government not to f this up.

I have been contracting for twenty years, through good and bad times.

From an employer's point of view it makes more sense to hire contract staff given the employment regulations at the moment, cost wise there is not too much difference.

As a single man I only take up to the 40% tax rate in wages/dividends, someone who is married could do twice that with the wife as a shareholder.

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9 minutes ago, SirGaz said:

I really hope they don't do this but I have no faith on the government not to f this up.

I have been contracting for twenty years, through good and bad times.

From an employer's point of view it makes more sense to hire contract staff given the employment regulations at the moment, cost wise there is not too much difference.

As a single man I only take up to the 40% tax rate in wages/dividends, someone who is married could do twice that with the wife as a shareholder.

There's more to employing than tax paid/take.

There are very *good* reasons for avoiding contractors.

Im not sure whether the self employed rates will change. its basically a response to people pretending to contract when they are actually working for a company.

At the moment theres the 'guideline' on not working for the same company for 2 years. Ive pointed out  that its not a hard law if push comes to shove with HMRC.

I keep banging my head against a brick wall with one of my brothers friends. I keep telling him to take on several different contracts during a year. At the mo, hes just  a single employee, working for the same company, pretending to be self employed. Hes not.

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I haven't been following this but I'd be surprised if they didn't bring it in tbh - yes the agencies and end clients will be in disarray but but the govt won't be looking at that, they just need the money.

It is what it is - I can't cheer the changes to BTL taxation on the one hand and bitch about contractor taxation on the other.

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52 minutes ago, spygirl said:

There's more to employing than tax paid/take.

There are very *good* reasons for avoiding contractors.

Im not sure whether the self employed rates will change. its basically a response to people pretending to contract when they are actually working for a company.

At the moment theres the 'guideline' on not working for the same company for 2 years. Ive pointed out  that its not a hard law if push comes to shove with HMRC.

I keep banging my head against a brick wall with one of my brothers friends. I keep telling him to take on several different contracts during a year. At the mo, hes just  a single employee, working for the same company, pretending to be self employed. Hes not.

Contractors are not self employed.  They're a paye employee of a limited company.

Edited by montecristo

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20 minutes ago, montecristo said:

Contractors are not self employed.  They're a paye employee of a limited company.

Ill rephrase - pretending to be not employed by the company hes contracting for. He's not - goes to th same site, does not have any other customers or income.

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9 minutes ago, spygirl said:

Ill rephrase - pretending to be not employed by the company hes contracting for. He's not - goes to th same site, does not have any other customers or income.

Yep that's the risk.  He/she needs to expand, get other income streams etc.  Needs to have indemnity insurance which he/she should have, helps.

  I took out IR35 insurance.  Get hit with a tax bill and it covers it.

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2 minutes ago, Chewing Grass said:

The whole tax system is a pile of disingenuous shite, too complicated, it is a job creation scheme for accountants. If it was simplified it would destroy their whole business.

The problem I have in industrial design and engineering is that on the design side companies can't carry idle staff while they wait for contracts to land.

Government contracts are even worse as they play companies along, change their mind, delay and otherwise go through the pretence of playing the private sector.

The last thing I want is to operate as staff as the thought of buggering about with pension conpanies every 6,12,24 months and all the other shit with being staff e.g. 3 month assessments is worse than paying VAT, PAYE, Corp Tax N.I., Employee Wage etc myself.

If I was staff everywhere I worked I would have had 18 or more jobs by now and been fucked over by a similar number of pension companies/schemes.

and there was chatter of making companies file their accounts every quarter >:(

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I work in construction. I've been a self employed contractor for the last 3 years with the same "employer".

Tbh, I think I'm really an employee - I have to ask for time off and fill in a timesheet etc. However I spoke to my accountant when I started my limited company and he said to do it.

I do think the construction industry benefits from having "self employed" contractors. I'm working on a massive civil engineering project, my employer had to get extra staff to cover it, realistically they couldn't employ people to work on it then make them redundant when the project is finished.

 

 

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16 minutes ago, Chewing Grass said:

If I was staff everywhere I worked I would have had 18 or more jobs by now and been fucked over by a similar number of pension companies/schemes.

yeah, I think being contract means you gets jobs easier. An employer knows he can take a contractor on and get rid of him if it doesn't work out. Taking on a permanent staff member means so much more risk from the employer's viewpoint.

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I will add that working cintract means you work on actual jobs doing real stuff and have a wider more consistent and up to date skill set than being staff and having to fill in time doing mindless stuff whilst waiting for work to arrive.

When I was staff there was even a time booking code called 'waiting time', how fucking efficient is that!

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10 minutes ago, Chewing Grass said:

The whole tax system is a pile of disingenuous shite, too complicated, it is a job creation scheme for accountants. If it was simplified it would destroy their whole business.

There was a steady governmental drive to simplify the tax system through the 80s and 90s; it was a deliberate aim of Chancellors and the two Tolley's tax reference manuals published annually, one for personal, one for corporate, one yellow, one orange but I forget which was which, were printed on thin paper and were quite chunky but were much reduced from their former size.

Enter the Scottish buffoon. With his endless meddling and tinkering from 1997 those books doubled in size and as no Chancellor since has claimed simplification of the tax system as an aim they have steadily crept up since.

So as with many problems of modern life you can put the blame squarely at the foot of James Gordon Brown, stupid idiot emeris causa.

 

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2 minutes ago, Great Guy said:

yeah, I think being contract means you gets jobs easier. An employer knows he can take a contractor on and get rid of him if it doesn't work out. Taking on a permanent staff member means so much more risk from the employer's viewpoint.

The job I'm on now it has took the 'employer a minimum of 3 months to get staff' and in some cases 6 months. Now for a 6-12 month design job that is untenable when you can get contract staff in less than 6 weeks.

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Oh but its not fair is it. It means that an individual can receive a higher income because he pays less tax and then spend it as he chooses. That is so unfair. //sarcasm off

Tommy Robinson made an interesting point on a clip I watched earlier. He said if a socialist really thinks that we should each pay more tax then they are free to pay more to HMRC. If they really think that income tax should be 60% or more then why do they not work out what their tax bill would be at that rate and then give the money to the state via HMRC. I'm sure they will enthusiastically do so to give us an example to follow.

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10 minutes ago, Great Guy said:

I do think the construction industry benefits from having "self employed" contractors. I'm working on a massive civil engineering project, my employer had to get extra staff to cover it, realistically they couldn't employ people to work on it then make them redundant when the project is finished.

The original idea of IR35 was that would still happen only you'd be forced to work for some body shop run by a mate of the government. You would be paid a pittance and some 1% would cream off the surplus cash.

If you went back to the middle ages and told the serfs that your overloads were taking 80% of your annual labour they would wonder why there hadn't been a peasant's revolt yet.

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26 minutes ago, Great Guy said:

I work in construction. I've been a self employed contractor for the last 3 years with the same "employer".

Tbh, I think I'm really an employee - I have to ask for time off and fill in a timesheet etc. However I spoke to my accountant when I started my limited company and he said to do it.

I do think the construction industry benefits from having "self employed" contractors. I'm working on a massive civil engineering project, my employer had to get extra staff to cover it, realistically they couldn't employ people to work on it then make them redundant when the project is finished.

 

 

Yes but you move around sites.

Mates problem is he wor5ks he same employee, at the same sie.

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20 minutes ago, Frank Hovis said:

There was a steady governmental drive to simplify the tax system through the 80s and 90s; it was a deliberate aim of Chancellors and the two Tolley's tax reference manuals published annually, one for personal, one for corporate, one yellow, one orange but I forget which was which, were printed on thin paper and were quite chunky but were much reduced from their former size.

Enter the Scottish buffoon. With his endless meddling and tinkering from 1997 those books doubled in size and as no Chancellor since has claimed simplification of the tax system as an aim they have steadily crept up since.

So as with many problems of modern life you can put the blame squarely at the foot of James Gordon Brown, stupid idiot emeris causa.

 

Tax system. benefit system. pension schemes, banks, politics too (regional parliament were heavily by by the useless cunt).

All blown up, at huge fucking expense.

Again, the real dirt and cost of Brown is still not apparent.

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3 hours ago, ccc said:

Any bods on here contract ?

Lots of rumours that the budget will introduce similar new rules that were brought in for the public sector last year.

 

In some ways its a blessing, if you get contract designated inside then its cast iron or at the very least the hirer not the contractor is liable. In the public sector despite all the fear mongering a large proportion of public sector projects declared themselves outside. In the private sector I would say 90%+ will declare outside most likely.

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Many IT contractors at our site have been there 5 years or more continuously, doing the same job as the permies, 9-5, directed as to which work they do, no genuine right to substitution etc. They are basically caught by IR35. But of course, very few declare it.

The thing is, the current 'rules' (I use that term lightly) are a crock of shit. These contractors don't genuinely have the same rights as PAYE employees - paid holidays, sick leave, redundancy etc. So why should they be classed as employees?

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It was the next logical step and will really impact my field electronics. Luckily my contracts are with different companies and none of them are based in the UK. 

Mind I have plans a foot to emigrate 

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5 hours ago, montecristo said:

Yep, contracting away.  TBH I haven't look into to the repercussions if spreadsheet Phil does.  18% is massive!

I have been doing things like having different sources of payments to my company account rather than just invoicing the same source ever month.  I have small amounts coming in from a couple of websites.

 

@ccc what you are reading is the day of the Contractor coming to a end?

Yes I just glanced at it last night. Went to the calculator expecting a fair difference but not that much O.o

3 hours ago, Fully Detached said:

I haven't been following this but I'd be surprised if they didn't bring it in tbh - yes the agencies and end clients will be in disarray but but the govt won't be looking at that, they just need the money.

It is what it is - I can't cheer the changes to BTL taxation on the one hand and bitch about contractor taxation on the other.

I can see some logic in that. But gaining a tax advantage to buy a house not to live in at the expense of another person who actually wants to buy and live in that house. And then charging the very same person rent so they will be even further away from ever buying that house ?

100 X worse on the taking the pish scale. Imo anyway. 

I just do work and get a fairly small tax advantage over permanent employees doing similar work - but have a huge reduction in benefits. 

Many will say - but you get handsomely rewarded on your day rate for this. However that's not set in stone. That could drop below a permanent employees actual take home pay in the future for all we know. 

Aside from all those doing dodgy offshore loan write off schemes etc I really don't see the big issue with it. It's relatively "fair" as far as I see it. 

1 hour ago, goldbug9999 said:

In some ways its a blessing, if you get contract designated inside then its cast iron or at the very least the hirer not the contractor is liable. In the public sector despite all the fear mongering a large proportion of public sector projects declared themselves outside. In the private sector I would say 90%+ will declare outside most likely.

Never realised that. Silver lining. 

1 hour ago, BigV said:

Many IT contractors at our site have been there 5 years or more continuously, doing the same job as the permies, 9-5, directed as to which work they do, no genuine right to substitution etc. They are basically caught by IR35. But of course, very few declare it.

The thing is, the current 'rules' (I use that term lightly) are a crock of shit. These contractors don't genuinely have the same rights as PAYE employees - paid holidays, sick leave, redundancy etc. So why should they be classed as employees?

Yep - as above. The only reasonable debate I have ever heard against this is how much you get paid as your day rate. Well fine - guarantee me that rate for the next 5 years and sign me up then !!

Oh - i see - it doesn't work that way.

Neither does a permanent job. But at least there is some decent protection etc.

Edited by ccc

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