IR35 Makes the Government £1.5m Year

[Turion]

http://www.bytestart.co.uk/content/c...tax-take.shtml

[threaded]

I don't believe it has made any money at all. When you look at the numbers it's as good a case as could be made. The reality is a huge loss to UK plc.

Yet, that wasn't the point of IR35, it never was intended to raise money for the treasury, it was to try and make sure you didn't have it.

Just your usual bone headed social engineering, that as an unfortunate side effect, caused immense damage to the UK IT industry.

Then again, when you think about it, maybe destroying the UK IT industry was the hidden agenda all along.

[malvolio]

http://www.bytestart.co.uk/content/c...tax-take.shtml

Keep up at the back there,

http://forums.contractoruk.com/gener...rned-ir35.html

[Mich the Tester]

IR35 seems to exist under different names all over Europe; here in NL the taxman gives you a document stating you fall outside of employee taxes and NI contributions but can then revoke it should he so wish, and then go chasing clientco for unpaid taxes. In reality you'll be OK as long as you can afford a good tax lawyer, as is always the case with taxes.

I don't think HM Government or their European partners in extortion have ever seen IR35 and the like as a means to raise public funds; I think it's basically political symbolism to try and fool lower paid voters that they're preventing tax avoidance. Just like inheritance tax and the new 50% top rate, it's a jealousy tax that discourages entrepreneurship and creativity.

If tax had anything to do with public funds, IR 35 and a whole list of other taxes would be abolished; it isn't, it's about political symbolism.

[Platypus]

I think you're right, Mich.

It's all about "fairness" (tm) in that nobody likes to think that anyone else is working the system when they cannot.

[Platypus]

Addendum

IR35 makes very little money for the Government, and given the cost of enforcing it, and the number of failed investigations for HMRC, it may even cost more to implement than it actually brings in.

Which I suspect is true of many other tax rules.

However it could be argued that if the legislation was withdrawn, many more people would change their working arrangements to take advantage and therefore there would be a significant loss of income to the treasury.

[Mich the Tester]

Addendum



Which I suspect is true of many other tax rules.

However it could be argued that if the legislation was withdrawn, many more people would change their working arrangements to take advantage and therefore there would be a significant loss of income to the treasury.

Indeed, but very few people will choose the ‘uncertainty’ of contracting or the loss of benefits entitlements; if some do, then fine; some will expand their businesses thereby creating jobs. Some won’t, but they’ll spend their contracting pounds in the shops, thereby paying VAT and the income taxes of the shop employees and probably raising a lot more than 1.5 million quid.

[Platypus]

Indeed, but very few people will choose the ‘uncertainty’ of contracting or the loss of benefits entitlements; if some do, then fine; some will expand their businesses thereby creating jobs. Some won’t, but they’ll spend their contracting pounds in the shops, thereby paying VAT and the income taxes of the shop employees and probably raising a lot more than 1.5 million quid.

If only someone could create a model which could prove this, the world would be a richer place for everyone.

[Drewster]

If only someone could create a model which could prove this, the world would be a richer place for everyone.

Which "world" do you live in? I can't think of many examples where proof and facts are actually the deciding factors...... rumour, 1/2 baked theory, scare tactics, jealousy etc.... but PROOF and FACTS nah!

[Mich the Tester]

If only someone could create a model which could prove this, the world would be a richer place for everyone.

As I said, I don’t think there’s any point in doing that as long as taxes are used to achieve political goals. The principle that the one and only purpose of tax is to raise public funds should be enshrined in constitutional arrangements and the highest laws. The first step in reforming taxes would perhaps be to set up a simplified tax system which will raise money for the use of the government. It should then be up to the executive (government) to use the money that’s raised in the way they are elected to do. I think governments should spend according to the money that has been received as opposed to making tax receipt projections, introducing new taxes and spending before the money comes in. I’d also say that the raising of the level of an existing tax or the creation of a new tax should be subject to agreement by a qualified majority of elected representatives, the Bank of England and an independent panel of economists nominated not by the executive but by both houses of parliament. What I’m trying to do is separate the raising of public funds from political goals; play politics with the way the money is spent, instead of trying to control how much comes in. A business can only spend according to real turnover and credit worthiness; government should be forced to act the same way.

Effectively I’m trying to turn things around; the taxpayer will say to the government ‘here you are, here’s some money; now spend it sensibly because you won’t get any more until next year’ instead of the government attempting to extort more and more from the taxpayer to spend on various nonsense policies.

Seperate control of raising money from the spenders and separate control of spending money from those who manage the raising of it.