Will you increase the rate come 25% on corp tax in 2023?

[Skag]

Just gauging the collective thinking. Will you try to increase your rate or absorb the corp tax increase?

[malvolio]

Just gauging the collective thinking. Will you try to increase your rate or absorb the corp tax increase?

Probably not. For one thing, it's a sliding scale and the higher rate is supposed only to apply to larger turnover companies. For another, your client doesn't give a stuff about your overheads, since theirs will be going up (probably rather more than yours). And on a £100k turnover you're looking at a £3k increase in taxes assuming worse case and you taking out £50k a year from YourCo. Which is a lot but not unmanageable.

And it may not happen anyway. There's a lot of smoke and mirrors around this mini budget.

[Skag]

Probably not. For one thing, it's a sliding scale and the higher rate is supposed only to apply to larger turnover companies. For another, your client doesn't give a stuff about your overheads, since theirs will be going up (probably rather more than yours). And on a £100k turnover you're looking at a £3k increase in taxes assuming worse case and you taking out £50k a year from YourCo. Which is a lot but not unmanageable.

And it may not happen anyway. There's a lot of smoke and mirrors around this mini budget.

Both good points, thanks.

Do you really feel that we might see changes still until Apr 23? To me, the change to 25% seems like "easy money" for the gov, as in "it was going to happen anyway" and not a whole lot happened when it was announced in the first place.

[malvolio]

Both good points, thanks.

Do you really feel that we might see changes still until Apr 23? To me, the change to 25% seems like "easy money" for the gov, as in "it was going to happen anyway" and not a whole lot happened when it was announced in the first place.

Don't think it's easy money. It's as likely to discourage inward investment as it is to increase tax revenues, something this chancellor and his Treasury-conditioned boss seem determined to ignore. There's a good chance it will lose tax income rather than increase it over the next few years.

[Skag]

I define "easy money" as in they can put the legislation in place and get the money -tomorrow. No push backs whatsoever and still ends up in gov's pocket.

There's a good chance it will lose tax income rather than increase it over the next few years.

Of course, that's always the consequence of high taxation; less spending and more money under the table/corruption.

[northernladuk]

I wish I could but I can't. I negotiate as best I can already and I'm absolutely sure me increasing my rates won't make a blind bit of difference as the clients rate cards won't change. You are assuming the client is willing to pay your increased rates, which they won't. Their corp tax is going up, their perms expect more money, they are getting hit hard for gas/electric. A one man contractor rocking up with a rate raise just because their tax has gone by a few percent is going to fall on very deaf ears.

We are a slave to the clients rate cards, not the other way around and looking at the hits the clients are taking I can't think for one minute they are gonna move.

[SussexSeagull]

Rate increases will be a very hard battle to win over the next couple of years.

[Skag]

Thank you all for your input. I just managed a rate increase of 7%!

So, to anyone who is reading this, there is hope and, as always, you don't ask-you don't get. Ask and thou might get!

[northernladuk]

Thank you all for your input. I just managed a rate increase of 7%!

So, to anyone who is reading this, there is hope and, as always, you don't ask-you don't get. Ask and thou might get!

That is great news but you should always be pushing for rate rises. Don't kid yourself this is because you the extra tax burdens or cost of living. If they upped the rate then it's always been there whatever external issues are going on. The agent has re-couped the money they spent on selling the role and it's all pure profit to them so better they pay you a bit more out of their comission than you jump ship and they have to start again. Again, this is nothing to do with your tax or cost of living.

So to anyone reading this... Understand if your agent is on fixed comission or not. If they are not then they are taking an arbitary number from your rate to cover their time. If you've got renewals then it's free money for them so squeeze them. Most agents are happy to tell you if it's fixed or not. You shouldn't be looking for a reason you think you need a rate rise, you should be sticking it to them at every renewal until you are sure they don't have any more to give.

[d000hg]

Your client is also paying more tax so by this logic, they should be pushing you to cut your rate to protect their bottom line. It doesn't come across as professional in my book.
Inflationary increases you might argue but not "I have to pay more tax I want more money" IMO.