Originally posted by northernladuk
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IR35 - Finance Contractors Try to Play Hardball
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Originally posted by NeedTheSunshine View PostEither that or when push comes to shove some of those 50 out of 53 contractors will cave in. The market out there isn't great. Contractors aren't known for sticking together union style. Or DB will give a rate uplift to some of the contractors that they really value and the rest can take it or leave it. Divide and conquer.If you don't have anything nice to say, say it sarcasticallyComment
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£100 extra on their day rate would shut them up for now.
Quite a lot of people with significant expenses work in banking - typically you can look at £120 train + £250 hotel for a week suddenly having to be found out of take home, which in itself is reduced via PAYE taxation rather than tax/divi split. Where they'll get no support from the public is if the public find out about the PAYE + divi "avoidance" that contractors do, especially where the spouse is in on it, even if their opponent is a bank.The greatest trick the devil ever pulled was convincing the world that he didn't existComment
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Originally posted by simes View PostExcellent.
This is exactly the sort of action all seasoned contractors should be taking if adversely affected by all large clients.
And in 2-3 months (wild guess), there would be, by necessity, a reversal of client thinking.
I honestly think these firms have got their heads up their arses over this and I don't think they've quite considered the implications should a great many contractors pull the plug and walk in the next few weeks.Comment
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Originally posted by LondonManc View Post
Where they'll get no support from the public is if the public find out about the PAYE + divi "avoidance" that contractors do, especially where the spouse is in on it, even if their opponent is a bank.Comment
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Originally posted by LondonManc View PostWhere they'll get no support from the public is if the public find out about the PAYE + divi "avoidance" that contractors do, especially where the spouse is in on it, even if their opponent is a bank.
Brown started it with banging on about people paying fair share. It became an argument away from paying what you legally have to and towards being expected to pay what you morally should.
Pre 2008, when I used to have discussions about IR35 outside of the industry, people were at least superficially sympathetic.
in 2020, people just see us as high paid individuals using tax avoidance schemes. They don't see how we are different to 0 hours workers or agency temps.
I don't agree, obviously, but I think its the main reason we have had no traction. And actually, I think the Tories are in an invidious position. If they back down, they'll be seen as giving tax breaks to the well paid by letting them continue with avoidance.
It does not matter what the reality is, that is how the red tops and the chav fodder media will play it and we have no sympathy out there.Comment
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Originally posted by juckky View Post
I honestly think these firms have got their heads up their arses over this and I don't think they've quite considered the implications should a great many contractors pull the plug and walk in the next few weeks.Comment
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I think fair taxation could be achieved without IR35 existing - scrap it and put a simple formula in place:
End of year assessment:
Revenue - Costs = Profit
Don't class contractors as having salaries. Call it take home pay.
Revenue is all Ex VAT paid invoices in that year
Costs are all legitimate business expenses - kit, travel, accommodation, accountant fees, insurance, office rental, whatever it may be
Profit is what is left before anything else is taken, salary, pension, etc.
Say this is 80k.
12% must go into a pension
x% must go to the gonverment as some sort of small business tax
y% must be retained to cover ongoing costs
z% is a take home for the shareholders (max 2) of the company.
Where x and y are to be determined and reflect the transient nature of contracting; expense claims can continue past two years, but perhaps increase x by 1 or 2 for every year that you're at the same client to discourage "permietracting".
This still means that Customs & Excise get a nice wedge of VAT revenue, HMRC don't have to worry about assessments and contractors must enter their monthly figures online. In theory, contractors could save by not needing an accountant because they are entering everything into a government portal, with fully-receipted expenses being a requirement for claiming them. Each month, then, government tells you what you can take out, what needs to be sent to your pension provider, what needs to be paid to them, etc.
Seems far easier to automate it until people have the ambition to go beyond the one-man-band model. Recruitment agency/client co log your details on the government portal as part of the contract kick off and the link is sent to you.The greatest trick the devil ever pulled was convincing the world that he didn't existComment
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Any change would be abused to the nth degree so HMRC aren't going to do that, nor are they going to treat people differently.
And Mookiemoo is right - why should anyone treat us as any better than your agency temp...merely at clientco for the entertainmentComment
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There was the FLC concept bandied about for a while, back in 2014/15 but it never took off
Freelancer Limited Company | IPSE
Complicated tax systems have benefits for both HMRC and companies as each try to use convoluted means to pay less / collect more. There is no will to make things simple and clear.Comment
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