Did contractors pay less tax in the olden days?

[ujjain]

When I read texts like this, it makes it seem that contracting has less tax advantages as it did before.

Pensions are big news as they represent one of the few remaining tax breaks available to contractors. ... The amount of tax relief can be as much as 48% meaning that for each £100 invested you pay £52 and the tax man pays the rest.

So for the more experienced contractors. Did contractors used to pay less or more tax? What used to be different?

[northernladuk]

Where it's a valid question I'd ask what you are getting from the answer? Are you going to be hacked off if we are a lot worse off? Contracting is still a much better model by far than permie land. Remember also the really older heads will come from a time with much better rates when specialists were needed. Now it's becoming the defo resourcing method with any chump having a go.

[ujjain]

It's just general interest actually. I'm very happy with my current tax situation compared to the one I had before switching.

[d000hg]

Some of them paid a lot less. Now there's a really long thread about what happened to them.

[BolshieBastard]

Claimable expenses have been tightened up a lot. Its still going on even now, the Budget announcement about travel and subsistence expenses being an example.

Pre 2001 there was no IR35 to worry about whereas after, many contractors declared themselves inside to avoid the hassle and worry.

Pre 2000 Ive known people with minimal skills be on over 600 a day at barcrap yet 6 or 8 years later, the same person doing basically the same role there was on sub 300 (and no, its not me!)

[ChimpMaster]

Contracting was far more lucrative and straightforward in the ol' days. No IR35, no stringent restrictions on expenses - company cars could be had without punitive taxation, rates were very high relative to jobs and asset prices etc.

Although some can still make a worthwhile living out of it, I don't think it's anywhere near as good as it used to be. I guess that could be said of IT in general: even permie salaries nowadays are much the same as they were 10 years ago when I left permiedom.

Shame that many of us missed the good times as such, but make the best of what you have now.