http://management.silicon.com/career...9165287,00.htm
Rates for IT contractors could be forced up by new Treasury taxation changes due to come into force in April, recruitment bodies and accountants have warned.
The Treasury is aiming to tackle what it calls "disguised employment" by contractors who use a managed service company (MSC) to avoid paying the level of national insurance contributions (NICs) and PAYE that those in full employment would.
MSCs are intermediary companies through which the services of a contractor are provided to a client and the contractor is paid in a mixture of wages and dividends. The proposed new legislation would require contractors in MSCs to pay national insurance and PAYE on the full combined wage and dividend payment they receive.
The Treasury estimates it will be able to recover £350m from these changes, which will affect 250,000 workers - not just in the IT sector - who currently work through an MSC.
A separate study by RM claims almost half (44 per cent) of IT workers are considering giving up their full-time jobs to become contractors.
silicon.com's 2006 Skills Survey also found that lucrative fees are tempting an increasing proportion of UK IT workers into becoming contractors, with those who have no desire to become permanent employees now making up 10 per cent of the IT workforce.
Well, what a load of old bollox all that is. The only truthful bit of the whole article is that the New Lie hates us with a vengence.
Rates for IT contractors could be forced up by new Treasury taxation changes due to come into force in April, recruitment bodies and accountants have warned.
The Treasury is aiming to tackle what it calls "disguised employment" by contractors who use a managed service company (MSC) to avoid paying the level of national insurance contributions (NICs) and PAYE that those in full employment would.
MSCs are intermediary companies through which the services of a contractor are provided to a client and the contractor is paid in a mixture of wages and dividends. The proposed new legislation would require contractors in MSCs to pay national insurance and PAYE on the full combined wage and dividend payment they receive.
The Treasury estimates it will be able to recover £350m from these changes, which will affect 250,000 workers - not just in the IT sector - who currently work through an MSC.
A separate study by RM claims almost half (44 per cent) of IT workers are considering giving up their full-time jobs to become contractors.
silicon.com's 2006 Skills Survey also found that lucrative fees are tempting an increasing proportion of UK IT workers into becoming contractors, with those who have no desire to become permanent employees now making up 10 per cent of the IT workforce.
Well, what a load of old bollox all that is. The only truthful bit of the whole article is that the New Lie hates us with a vengence.
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