About contractors & benefits

[PurpleGorilla]

3) Lets be honest. We all to a certain extent use the tax system to our advantage, be it splitting dividends, paying low salary, claiming expenses. Permies get to do none of these things so we're better off. Come on - tell the average permie how little tax you pay and they'd be well unimpressed!

I know what I can earn doing what I do as a permie, and as a contractor. On that basis, the tax man gets WAY more tax out from me pulling in VAT and corporation tax than he does when I work permie and pay more NI and Income tax. Even factoring employers NI.

And of course I do the low wage + div thing. My tax paying conscience is clean. It is better for the tax man if I work this way.

[SueEllen]

Not quite. Originally it was a tax allowance given to the main breadwinner of the household. Typically the man. One party who shall remain nameless decided to win lots of wimmin votes by turning it into Family Allowance, which was given periodically in booklets and claimed at the PO (I think). It was then transformed into Child Benefit.

I'm not sure my hazy memory of Mum trotting down to the PO every Tuesday morning to collect it is correct but here is a history of it.

Men didn't like the idea and neither did the unions who feared it would be used by unscrupulous employers to keep wages down or even reduce them. It seems we never learn anything, look at Tax Credits now.

Oddly my mum told me that it was paid to women because it was to stop men p*ssing the money up the wall. Women especially in inner cities never got drunk you see

The unions didn't like the idea of equal pay for women (sex discrimination act) or people who weren't White English (race relations act), so I take things the unions didn't like with a pinch of salt. Some of the sex discrimination cases they didn't support are quite recent as well and it's taken law firms run by the middle classes to sort the issues out.

[SueEllen]

As is not paying tax on money claimed for travelling to "work". As is splitting your "salary" with your mrs to pay less tax. As is paying less in salary per month to avoid NI.

Well to the permie sitting next to you it is. (Note, the words in "" are permie words).

Permie sitting next to me lives nearer the company then I do and gets a pension. They also don't pay employers NI and have never had to chase a company for non-payment of an invoice.

(To be fair I do know those who are permie and have freelance contracts on the side. They can't get enough work to be full time contractors/freelance.)

The benefits system was built on the fact people would only claim it if they really needed it, it was difficult to claim and that there was stigma to claiming.

For some people this stigma has gone, but talk to those over 70 as they will not claim certain benefits and will explain to you why.

[psychocandy]

I know what I can earn doing what I do as a permie, and as a contractor. On that basis, the tax man gets WAY more tax out from me pulling in VAT and corporation tax than he does when I work permie and pay more NI and Income tax. Even factoring employers NI.

And of course I do the low wage + div thing. My tax paying conscience is clean. It is better for the tax man if I work this way.

Interesting approach. Not sure HMRC would go with that argument if they investigated for IR35 though!

[The Spartan]

Interesting approach. Not sure HMRC would go with that argument if they investigated for IR35 though!

That may be so, but on a whole what I now pay into the system as a contractor is 5 times the amount they were getting when I was a permie. I know what I'd choose not that they see a lot of sense these days.

[psychocandy]

Permie sitting next to me lives nearer the company then I do and gets a pension. They also don't pay employers NI and have never had to chase a company for non-payment of an invoice.

(To be fair I do know those who are permie and have freelance contracts on the side. They can't get enough work to be full time contractors/freelance.)

The benefits system was built on the fact people would only claim it if they really needed it, it was difficult to claim and that there was stigma to claiming.

For some people this stigma has gone, but talk to those over 70 as they will not claim certain benefits and will explain to you why.

99.99% I would say. Fair enough if you really feel that you dont want to claim then don't claim but I think we're a long way past the days where people had a conscience about these things.

Like I said, OK fair enough, its not really meant for contractors. But I would argue that some of the tax breaks are not either.

And yes, it can be a PITA to claim at times.

But, to say that a contractor is doing anything wrong in claiming is a bit rich to be honest.

Stand outside a jobcentre in the south wales valleys any day of the week. You will see people there who, quite obviously, will never ever ever be employed by anyone.

[psychocandy]

That may be so, but on a whole what I now pay into the system as a contractor is 5 times the amount they were getting when I was a permie. I know what I'd choose not that they see a lot of sense these days.

True enough. Another reason why I don't feel guilty claiming benefits when needed.

Spartie - you're from Cymru too if I remember rightly? You will, as I have, possibly got experience of lots and lots of people who have never worked and never intend to.

[The Spartan]

True enough. Another reason why I don't feel guilty claiming benefits when needed.

Spartie - you're from Cymru too if I remember rightly? You will, as I have, possibly got experience of lots and lots of people who have never worked and never intend to.

That's right, it's quite sickening to see such a large amount of people be able to use the benefits system as a way to sustain their lifestyle. Having free prescriptions in Wales is a bad thing with people constantly abusing the Welsh NHS.

[SueEllen]

99.99% I would say. Fair enough if you really feel that you dont want to claim then don't claim but I think we're a long way past the days where people had a conscience about these things.

Like I said, OK fair enough, its not really meant for contractors. But I would argue that some of the tax breaks are not either.

And yes, it can be a PITA to claim at times.

But, to say that a contractor is doing anything wrong in claiming is a bit rich to be honest.

Stand outside a jobcentre in the south wales valleys any day of the week. You will see people there who, quite obviously, will never ever ever be employed by anyone.

Actually there are people who still have a conscience about these things not just on this forum. You may not due to were you live, but the reason the Tories can alter the benefits system is because there are people who do.

In regards to the tax breaks -I guess the government would rather we use those with the potential to employ a couple of people in the future than claim JSA, as most large businesses start of small.

[VectraMan]

The benefits system was built on the fact people would only claim it if they really needed it, it was difficult to claim and that there was stigma to claiming.

For some people this stigma has gone, but talk to those over 70 as they will not claim certain benefits and will explain to you why.

I think at least half the reason I went a long time without claiming was because I didn't want people to know that I'd failed to support myself. It's not just about conscience or whether it's morally right to claim.