About contractors & benefits

[eek]

Hmmm. There are lots of stuff that we do that HMRC are not happy with - See IR35.

If you told the average man in the street that you earned £x per day, and that you saved yourself tax by sharing it with your mrs, and that you saved tax by claiming the commute to work etc. and compared it to the permie sitting next to you , do you think they would say fair enough seems fine to me? No way.

Did I say that hmrc are happy. Read what I said again!!!

[psychocandy]

That statement alone knocks holes in your every argument. If you have a war chest, why are you struggling to pay your bills? You are not in need of welfare. You don't need a safety net.

The clue is in the name IMHO, It's JOB seekers allowance, not Contract seekers allowance. It's applying a contractor context to a permie mind set.

I will agree that the system does not really understand the contract/job idea and is all geared to the permie job idea. But thats the system as it stands.

And claiming JSA when you have periods without work is allowable.

Same could be said for some of things we take advantage of. Like expenses, dividends etc. This is not really meant for the one-man band that most of us are - its applicable to business with multiple employees. This is why IR35 was created.

An example for how JSA works for me in my head using made up figures. So, assume I need £1000 minimum per month to pay mortgage, food etc. Assume my warchest is £3000.

OK, times are hard. Three months go by and no new gig.

Scenario A - I didnt claim at all, then warchest would be gone now. No good screaming/crying/begging now they'll give you £73 a week still - next months you've got to find nearly £700 to meet your minimum commitments. Possibly FCUKed.

Scenario B - I claimed from day 1. Over 3 months this equals £1000. It still won't pay the bills and I still need to dip int my warchest every month. BUT at the end of month 3, I've still got a £1000 (the £1000 claimed from JSA) left so I can still last for another month. Might make all the difference.

Just an example. Of course, leaving yourself just 3 months warchest is not clever.

[psychocandy]

Did I say that hmrc are happy. Read what I said again!!!

LOL. OK fair point....

[northernladuk]

I do think you pay lipservice to the actual amounts though. Ohhh 1000 over 3 months... Jesus.. that's just utter peanuts and won't pay anything. It's ok rolling the months up to make it sound better and more plausible but seriously.. what is a grand a quarter going to cover? You are kidding yourself if you think that is a reasonable amount for anything. It's 15 quid per working day!!! There is no way on earth you can justify JSA to a contractor based on that. Feel free to do it if you want to but don't think preaching that amount of money makes you look any better or is reason enough for a decent contractor to even consider it.

A slight change in lifestyle or change to financial planning can get you way more than that.

[tractor]

....

I will agree that the system does not really understand the contract/job idea and is all geared to the permie job idea. But thats the system as it stands. The system is not intended to tide businessmen over the quiet periods.

And claiming JSA when you have periods without work is allowable.

Same could be said for some of things we take advantage of. Like expenses, dividends etc. This is not really meant for the one-man band that most of us are - its applicable to business with multiple employees. This is why IR35 was created. That may well be how you justify it. Exp, divis etc are designed for businesses. IR35 was introduced to stop F2M amongst other things but never to deny expenses or divis to close companies.

An example for how JSA works for me in my head using made up figures. So, assume I need £1000 minimum per month to pay mortgage, food etc. Assume my warchest is £3000.

OK, times are hard. Three months go by and no new gig.

Scenario A - I didnt claim at all, then warchest would be gone now. No good screaming/crying/begging now they'll give you £73 a week still - next months you've got to find nearly £700 to meet your minimum commitments. Possibly FCUKed.

Scenario B - I claimed from day 1. Over 3 months this equals £1000. It still won't pay the bills and I still need to dip int my warchest every month. BUT at the end of month 3, I've still got a £1000 (the £1000 claimed from JSA) left so I can still last for another month. Might make all the difference.

Just an example. Of course, leaving yourself just 3 months warchest is not clever.

The bold parts above are my response to avoid any confusion and to keep the comments in context. As for the rest of it, sorry to repeat myself but JSA is not designed as a top up for the not-so-successful businessperson.

It matters not that you try to justify it by calling everyone else expenses cheats.

[Eirikur]

Can't be bothered for this £70 per week (or whatever it is) to claim JSA however it has crossed my mind after contracts in finance where you have to account for every gap in your CV and provide personal references for these periods. Claiming JSA is seen as an acceptable gap filler and no personal referees are required.

[tractor]

....

Can't be bothered for this £70 per week (or whatever it is) to claim JSA however it has crossed my mind after contracts in finance where you have to account for every gap in your CV and provide personal references for these periods. Claiming JSA is seen as an acceptable gap filler and no personal referees are required.

All well and good but what if you plan better and retain a year's war chest? That does not work then.

In any event, recruiters whether in FS or not should understand by now that career contractors always, always, always have (mostly) innocent gaps in their history. Usually because said recruiters are not successful enough The whole concept is whacky when it is easy enough to get a disclosure certificate.

[psychocandy]

I do think you pay lipservice to the actual amounts though. Ohhh 1000 over 3 months... Jesus.. that's just utter peanuts and won't pay anything. It's ok rolling the months up to make it sound better and more plausible but seriously.. what is a grand a quarter going to cover? You are kidding yourself if you think that is a reasonable amount for anything. It's 15 quid per working day!!! There is no way on earth you can justify JSA to a contractor based on that. Feel free to do it if you want to but don't think preaching that amount of money makes you look any better or is reason enough for a decent contractor to even consider it.

A slight change in lifestyle or change to financial planning can get you way more than that.

The mortgage or a chunk of it?

[psychocandy]

I do think you pay lipservice to the actual amounts though. Ohhh 1000 over 3 months... Jesus.. that's just utter peanuts and won't pay anything. It's ok rolling the months up to make it sound better and more plausible but seriously.. what is a grand a quarter going to cover? You are kidding yourself if you think that is a reasonable amount for anything. It's 15 quid per working day!!! There is no way on earth you can justify JSA to a contractor based on that. Feel free to do it if you want to but don't think preaching that amount of money makes you look any better or is reason enough for a decent contractor to even consider it.

A slight change in lifestyle or change to financial planning can get you way more than that.

Not saying its a huge amount - its not. Its just a little extra for minimal effort.

[psychocandy]

The bold parts above are my response to avoid any confusion and to keep the comments in context. As for the rest of it, sorry to repeat myself but JSA is not designed as a top up for the not-so-successful businessperson.

It matters not that you try to justify it by calling everyone else expenses cheats.

Not calling anyone cheats merely pointing out that we all play the system to our advantage legally.

It might not be ideal but its the current system and thats how it works.