Labour pledge to halt IR35

[Manic]

agreed, but it might put pressure on Boris to at least postpone the proposals and perhaps announce an independent review. Utopia I know, but there's always a chance!

And what do you think the outcome would be?

[portseven]

I wonder if Mr Timms will get involved in the treasury again - House of Commons - Standards and Privileges - Sixth Report

[LondonManc]

The long and the short of it is that under Labour, you'll be worse off whatever, with a softer blow for those with significant expenses.
Under the Tories, you'll be worse off in the short term, while blanket bans/blanket rulings are imposed until companies find out that they struggle to deliver.

[AtW]

So you would prefer all contractors to be forced into IR35 and removing our ways of working, over a relatively small number of contractors that might be affected by ER or CGT?

Labour will have 45% income tax starting at 80k, dividends tax iwol be same level - 50% for 125k, AND that’s on top of 21% CT if your turnover below 300k, if not then CT will raise to 28% and thta’s just what they are willing to admit to right now.

[JohntheBike]

And what do you think the outcome would be?

being cynical, IR35 stays. However, being hopeful, even if it did stay, anyone found subject to IR35, i.e. declared a disguised employee, should get some employment benefits. Utopia I know, but who would have predicted these latest moves on IR35?

[hgllgh]

The long and the short of it is that under Labour, you'll be worse off whatever, with a softer blow for those with significant expenses.
Under the Tories, you'll be worse off in the short term, while blanket bans/blanket rulings are imposed until companies find out that they struggle to deliver.

Vote Brexit Party then.

[sal]

So you would prefer all contractors to be forced into IR35 and removing our ways of working, over a relatively small number of contractors that might be affected by ER or CGT?

Where did you get the "all" bit? Just as with the public sector 3 years ago there will be outside IR35 contracts.

Compared to the Labour proposed dividend tax change that will make outside IR35 financially non-viable.

Then you are double screwed with the income tax increase for £80k+, so even going perm will be worse than under the Tories.

[genius]

What is labours new dividend tax rate? Lots of noise in here but no facts

[LondonManc]

What is labours new dividend tax rate? Lots of noise in here but no facts

As a one liner, they're being brought in line with PAYE, so that it doesn't matter what your split between salary and dividends is. Arguably you'd be better off paying yourself a "proper" salary with less to pay CT on.

[DaveB]

As a one liner, they're being brought in line with PAYE, so that it doesn't matter what your split between salary and dividends is. Arguably you'd be better off paying yourself a "proper" salary with less to pay CT on.

That will depend on the NI contributions. Right now we can effectively paying zero NI, employees or employers.

If you pay a higher salary to reduce CT you will end up paying Employers NI at 13.8% and Employees at 12%, so an extra 25.8%. So you save 21% in CT and pay 25.8% in NI instead.

Unless I've missed it they haven't announced an intention to apply NI to dividends, just income tax.

It looks like sweet spot would still be low salary/high dividend, but keep the divi below the upper rate tax bracket if you can. Income splitting becomes even more attractive in this scenario as it allows you to use two lots of tax allowances to get the dividends out without going into the upper rate tax bracket.

I'm sure the accountants will be poring over the proposals even as we speak, but until we get concrete details it's all speculation anyway.