Hi - new to the site but I've just written to my MP about the IR35 changes that come into effect in April 2020. Must be worth everyone trying? Feel free to copy my email below. My MP wrote back to say they would investigate with HM Treasury.
Dear Mr Andrew
I along with many other IT contractors are getting very worried about the pending implementation of IR35 into the private sector in April 2020. This is following what can only be described as a farce when it was implemented within the public sector with HMRC itself being completely inconsistent with its implementation of the new rules and having to back track some decisions after contractors quit, leaving them unable to complete projects.
From a personal perspective, if the contract I work on next is deemed inside IR35, then effectively it will mean I will be forced to stop contracting and take a permanent role again, something I would rather not do. This is because under IR35 the government want to tax me as a permanent employee, and then as an employer and then finally as a corporation. I’ll be paying personal tax, personal NI, employers NI and corporation tax. All for no benefit! As a contractor I’m not entitled to holiday pay, sick pay, pension contributions or protected employment rights yet from a tax perspective the government think I’m permanent - this would be illegal if I were permanent.
From a corporate perspective this doesn’t make sense either. Contractors are very useful, as they can be hired and fired at very short notice, usually to fill short term or project related roles. Most companies, in the absence of contractors, will look to fill these vacancies through large consultancies and will pay a significantly higher price for those roles and that freedom. This in turn will see this increase in cost pushed on to the end consumer.
From a government and tax revenue perspective this doesn’t make sense either, as most (if not all) contractors that go permanent will be paying less tax as permanent employees than they would as contractors (personal tax and corporation tax and VAT). The simple reason being that the salary of permanent employees is significantly lower than the cost of contractors specifically to take into account holiday pay, benefits and the costs of employment.
Finally there is the fact that most of the big IT consultancies are actually foreign owned and somehow do a marvellous job of reducing their UK tax bills and ensuring more profits go to foreign shareholders.
So, in summary, as one of your constituents and a group of over 100,000 IT contractors, I’m very concerned about the impending changes from a personal perspective and about the decimation this is going to cause in the IT industry in the UK.
The changes to the rules seem to have simply looked at an individual and the additional tax that could be raised (if everything stayed the same) and not at the bigger picture and the unintended consequences of the changes.
I look forward to your reply.
Dear Mr Andrew
I along with many other IT contractors are getting very worried about the pending implementation of IR35 into the private sector in April 2020. This is following what can only be described as a farce when it was implemented within the public sector with HMRC itself being completely inconsistent with its implementation of the new rules and having to back track some decisions after contractors quit, leaving them unable to complete projects.
From a personal perspective, if the contract I work on next is deemed inside IR35, then effectively it will mean I will be forced to stop contracting and take a permanent role again, something I would rather not do. This is because under IR35 the government want to tax me as a permanent employee, and then as an employer and then finally as a corporation. I’ll be paying personal tax, personal NI, employers NI and corporation tax. All for no benefit! As a contractor I’m not entitled to holiday pay, sick pay, pension contributions or protected employment rights yet from a tax perspective the government think I’m permanent - this would be illegal if I were permanent.
From a corporate perspective this doesn’t make sense either. Contractors are very useful, as they can be hired and fired at very short notice, usually to fill short term or project related roles. Most companies, in the absence of contractors, will look to fill these vacancies through large consultancies and will pay a significantly higher price for those roles and that freedom. This in turn will see this increase in cost pushed on to the end consumer.
From a government and tax revenue perspective this doesn’t make sense either, as most (if not all) contractors that go permanent will be paying less tax as permanent employees than they would as contractors (personal tax and corporation tax and VAT). The simple reason being that the salary of permanent employees is significantly lower than the cost of contractors specifically to take into account holiday pay, benefits and the costs of employment.
Finally there is the fact that most of the big IT consultancies are actually foreign owned and somehow do a marvellous job of reducing their UK tax bills and ensuring more profits go to foreign shareholders.
So, in summary, as one of your constituents and a group of over 100,000 IT contractors, I’m very concerned about the impending changes from a personal perspective and about the decimation this is going to cause in the IT industry in the UK.
The changes to the rules seem to have simply looked at an individual and the additional tax that could be raised (if everything stayed the same) and not at the bigger picture and the unintended consequences of the changes.
I look forward to your reply.
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