Information Technology & Finance
Half of IT Contractors receive more than eight times bonus to salary
Nearly half of the IT Contractors working in Britain received more than eight times their income in the form of dividends & bonuses than salary last year, according to a survey of IT Professionals
Half of IT Contractors receive more than eight times bonus to salary
Nearly half of the IT Contractors working in Britain received more than eight times their income in the form of dividends & bonuses than salary last year, according to a survey of IT Professionals
On average, IT Professionals said that they had received dividend payments of £54,000 for 2010, with 49pc saying that their take home pay was larger than last year.
The findings cane in reading the threads of 654 UK-based IT Professionals posted on IT sector contracting website ContractorUK.
The findings cane in reading the threads of 654 UK-based IT Professionals posted on IT sector contracting website ContractorUK.
Accordingly to the threads, top IT Contractors have received almost 90% of their total take home for 2010 in the form of dividends.
Across the board, dividends are said to be up about 5% on last year, although a quarter of those threads read said that number of days invoiced was smaller than the number invoiced in 2010.
There has been growing anger among the wider IT community over the much higher proportion of take home pay available to IT Contractors coupled with tax avoidance schemes in the forms of Umbrella companies, Offshore companies and the use of LTD liability shells.
IT Contractors engineer their working practices in such a way as to pay little or no National Insurance & Income tax by paying a minimum wage of £6750 to themselves, and in certain cases their partners, while at the same time claiming back VAT on subsistence & travel expenses to ensure that the amount of taxable income is reduced.
Headline rates of ‘take home 80-85%’ of Gross pay as well as threads around tax avoidance and VAT theft ‘take home 120%’ of income have added to the furor.
In recent years, IT Contractors have been feeding off the public finances attaching themselves to huge billion pound projects on the NHS, Government & Banking through Lloyds and RBS.
Average IT Contractors take home pay is almost 4 – 5 times the national average.
A recent thread from the Mich the Tester stated that he had been able to bill a client for a full days work for using an automated testing tool taking 30 minutes and posting on ContractorUK.while others boast of using Entrepreneurs relief to avoid tax.
A spokesman for the Banking Industry said ‘Those in glass houses shouldn’t throw stones’
(Remember. It could so easily be us in the headlines people!!) - MF
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