Sunday Times seeks case-study: why are you self-employed?

[norrahe]

What's wrong with freelancer?

It what we use in cloggers.

Though legally I class as employed by an employer i.e. my cloggy limited, I even have to have a contract of employment with myself. You got to love the cloggy bureaucracy.

[Zero Liability]

well it might be nice for someone to explain to the world why the different structures are used and maybe champion those forced into self employment by large companies to cut costs (hint its not normally IT contractors).

Imagine a public that understood IT contractors don't become limited companies to avoid tax but are actually forced into it because HMRC previously pursued clients & agencies for unpaid tax incurred by their self employed supplier therefore no agency or client in their right mind would hire self employed people long for fear of being billed for their tax & NI.

That the government solution to companies forcing people into ltd companies ' the Friday to Monday scenario' - IR35 attacks the Employee not the employer and its so poorly drafted it took years of tribunals to get a working understanding and it still spawns tribunals.

I used to be a contractor with multiple customers but when the Government of the time imported ICTs in quantity and we had a dotcom crash I took a nice PAYE job I sort of got stuck in. So I'm not your man. Good luck though and ignore the ribbing some folks like radiators & Gladiators.

You could also point to the lack of employment rights, even if HMRC should deem you 'inside', nowhere are these to be found. It's a different way of working, with much fewer 'protections' and none of the perks permies enjoy. Though I tend to see them as overtaxed in general.

[Sysman]

It what we use in cloggers.

Though legally I class as employed by an employer i.e. my cloggy limited, I even have to have a contract of employment with myself. You got to love the cloggy bureaucracy.

I could write a beautiful bit of satire if I had my last permie contract to hand.

It had things like "must hand over all dosh earned outside work" and "require permission to take a second job". It was a real stitch-up job.

Needless to say I viewed it as a means to keep a roof over my head until something else cropped up.

Some people really know how to get a working relationship off on the wrong foot

[vetran]

You could also point to the lack of employment rights, even if HMRC should deem you 'inside', nowhere are these to be found. It's a different way of working, with much fewer 'protections' and none of the perks permies enjoy. Though I tend to see them as overtaxed in general.

yes I think if they added the granting of employment rights to those IR35 caught the whole situation might be different as currently the employers / agencies lose nothing if you are IR35 caught so tend to supply contracts and conditions that are a long way from reality.

If you wanted to build SME ltds chopping one man bands off at the knees by arbitarily taxing them based on opinion hardly seems sensible.

80% of my immediate family had a business so I started one too, I made good money and had freedom to work more or less how I wanted. I was very happy. I'm not so happy or paying as much tax now I'm a permie.

[malvolio]

The whole tax avoidance thing is bollocks anyway. I did a blog a while back where I worked out how much tax I generated for HMRC compared to a permie on a comparable salary. With VAT, CT, PAYE and NICs on an average year, I paid a lot more a year than he did...

Edit: Found it...

[PerfectStorm]

http://forums.contractoruk.com/gener...ays-times.html

Damn, I want to see the article now

[MarillionFan]

The whole tax avoidance thing is bollocks anyway. I did a blog a while back where I worked out how much tax I generated for HMRC compared to a permie on a comparable salary. With VAT, CT, PAYE and NICs on an average year, I paid a lot more a year than he did...

Edit: Found it...

VAT doesn't count. You invoiced it, clientco claimed it. Are you the Starbucks CEO?

[Zero Liability]

yes I think if they added the granting of employment rights to those IR35 caught the whole situation might be different as currently the employers / agencies lose nothing if you are IR35 caught so tend to supply contracts and conditions that are a long way from reality.

If you wanted to build SME ltds chopping one man bands off at the knees by arbitarily taxing them based on opinion hardly seems sensible.

80% of my immediate family had a business so I started one too, I made good money and had freedom to work more or less how I wanted. I was very happy. I'm not so happy or paying as much tax now I'm a permie.

Sure, if they billed the end client - who they allege is your "employer" - with the ErNI, retrospectively forced the end client to grant all benefits granted to permies etc., it'd be much more equitable. It'd also go down in flames as the clients begin wising up to what is going on. Which is why it doesn't happen. There is nothing equitable about IR35 in its current form, and most media reporting on contractors is highly slanted. It is a highly deceptive ruse to collect more tax, mostly preying on contractors who don't have someone in the know to defend them and asking the end client misleading questions, in the hope that they will balls it up... which again, you won't find the media reporting on.

Alternatively, they could move away from archaic, anachronistic definitions of the employee/employer relationship, of which the sole purpose these days is to try and justify taxing some individuals more than others... in turn, to cover the profligacy of politicians who can't control their spending, in order to buy the next election, and who themselves engage in, shall we call it, "tax planning". Besides, even regarding the mythical £2bn they supposedly "protect", doesn't the government waste far in excess of this each year?

And the other thing is, the people who the trash papers like the Daily Mail are aiming to incense could likely just become contractors themselves, except I guess some of them are too thick to put two and two together. If it's so great, go ahead, leverage your skills (or acquire them), and join in! (or at least stop pretending an ISA or pension is not the exact same type of action)

Luckily, it is so costly to enforce relative to any prospective yields, and the evidentiary bar HMRC has to jump over is so high, that at present there are ways to shield against it. But not if the FLC becomes a reality in tandem with the agency reporting requirements.

If they really are that yield hungry, they could go after MNCs. Not saying that they should, and it would probably cause far more damage in the long term than any good it did in the short term (much like their crusade against contractors), but it'd strain credulity a little less.

[mudskipper]

The whole tax avoidance thing is bollocks anyway. I did a blog a while back where I worked out how much tax I generated for HMRC compared to a permie on a comparable salary. With VAT, CT, PAYE and NICs on an average year, I paid a lot more a year than he did...

Edit: Found it...

How's the vat thing count as paying more tax? You collect, they reclaim.

I pay more (real) tax in £ : p than I did as a permie, and take home more too. Sounds like a win/win.

[Zero Liability]

How's the vat thing count as paying more tax? You collect, they reclaim.

I pay more (real) tax in £ than I did as a permie, and take home more too. Sounds like a win/win.

It does have some perks. I like the fact that you can control how much of your ltd's money goes to covering things like vacations or a pension pot, if any at all.