Will contract rates increase to pass dividend tax increase to clients?

[SlipTheJab]

HMRC's view of contractors using LTD companies is that a LTD is used way to avoid paying their "fair" share of tax.

So first they cut down on what was claimable, then when that didn't work they introduced IR35.

That didn't work, so now they are increasing the take on dividends.

If that doesn't work they will simply force "close company's" to pay all the income taken by the company as PAYE. End of "problem".

At the end of the day HMRC view a LTD company as a device to create jobs and value - as in services and products : A "real" company employs multiple people who all pay PAYE.

A LTD company is not meant to be a structure to allow individuals to avoid paying the same rate of tax to that paid by people with a comparable skill-set who are on PAYE.

There should always be a premium given to people who are prepared to take the risk of working short-term contacts with no job security, but the tax advantages will continue to narrow.

If I could I would be contracting as a sole trader but that's a non starter so it's Ltd or Brolly, reason why I'm a Ltd is that it gives me better control and it removes another link in the chain of companies that may p!ss my money up the wall before they liquidate!

[cojak]

WSTJS

:

[WTFH]

To make up for it, I'm going to negotiate a reduction in the agent's margin when we start talking about my contract renewal.

What's 10% of nothing?

[Cirrus]

At the end of the day HMRC view a LTD company as a device to create jobs and value

I totally agree.

The State must take taxes off people to pay for State services. The Economy largely works on capitalism and we mainly take tax off people who have income from jobs. Jobs are however a stressed resource, so it makes all round sense for the State to give tax breaks to those who create jobs. It's an investment in future tax revenue.

Contractors are almost entirely consumers of jobs created by other people so it doesn't make sense to make job creation tax breaks available to them.

Having said that, it's only you and I that see things that way

[pr1]

To make up for it, I'm going to negotiate a reduction in the agent's margin when we start talking about my contract renewal.

What's 10% of nothing?

what's 90% of nothing?

[seanraaron]

I totally agree.

The State must take taxes off people to pay for State services. The Economy largely works on capitalism and we mainly take tax off people who have income from jobs. Jobs are however a stressed resource, so it makes all round sense for the State to give tax breaks to those who create jobs. It's an investment in future tax revenue.

Contractors are almost entirely consumers of jobs created by other people so it doesn't make sense to make job creation tax breaks available to them.

Having said that, it's only you and I that see things that way

I cannot see why people who have a one or two person ltd (gotta remember the wife!) are allowed to pay themselves dividends or anything else really. The idea a contractor has a "company" with "shares" is laughable.

If you're not running a bona fide consultancy with an office outside your home and part- or full-time staff that do more than get you more tax-free money you're just taking the piss.

I can only imagine the government doesn't crack down on it because too many of them are doing it themselves...

[northernladuk]

I cannot see why people who have a one or two person ltd (gotta remember the wife!) are allowed to pay themselves dividends or anything else really. The idea a contractor has a "company" with "shares" is laughable.

If you're not running a bona fide consultancy with an office outside your home and part- or full-time staff that do more than get you more tax-free money you're just taking the piss.

I can only imagine the government doesn't crack down on it because too many of them are doing it themselves...

Why are you even on these boards? You don't have the first clue what you are talking about, you are new through a brolly, you are not a contractor as you have already admitted you'll just take anything, permie or contract and appear to be a bit of an around pillock to boot. You are just a floater getting by. Why do you even bother posting?

[WTFH]

what's 90% of nothing?

Same amount I pay an agent in my current contract.

[SueEllen]

I cannot see why people who have a one or two person ltd (gotta remember the wife!) are allowed to pay themselves dividends or anything else really. The idea a contractor has a "company" with "shares" is laughable.

If you're not running a bona fide consultancy with an office outside your home and part- or full-time staff that do more than get you more tax-free money you're just taking the piss.

I can only imagine the government doesn't crack down on it because too many of them are doing it themselves...

I shall tell my builder that. Yes he does subcontract work out but so do I.

You really don't have a clue about UK law. We in knowledge industries are incorporated because there is no other way we can work with agencies or medium/large consultancies otherwise.

[northernladuk]

Same amount I pay an agent in my current contract.

I don't pay any agent anything on any contract....