With the dividend taxation will you continue contracting?

[stek]

What's the difference between this and a slight drop in rate, or a gig further away so more expenses? Ups and downs, swings and roundabouts, skill up a bit and make up the difference if it's such an issue.

Who knows where one stands, I've just taken a new role on, slightly lower rate, this one 3 miles away, previous 300, shorter working week, but no requirement to be on-call so in reality I don't know if I'm better or worse off because really it doesn't matter, it's a down. And now I need two ups so I can cancel out the down and so I can just have an up....

[eek]

Why? If you have costs of £500 / week, what difference does it make whether you make £500 / day or £400 / day with expenses paid?

If the latter means a lower tax bill, I'd agree to it in a heartbeat.

Because it will need to be £560 a day to cover the tax required to cover the £100 of expenses (assuming it takes you into the 40% barrier its 1/1-0.325 which means you need to take £160 from the company to cover the £100 in expenses that was taken from the company tax free...

[Flashman]

What fooks me off is I consider myself a consultant, as I do the same work now as I did when I worked for a big 4 consultancy. The big 4 though see us little guys as a threat as we do the same job but for 25% of the cost to the client. And what do they do with threats, they pressure the government to get rid of us.

It probably cost the big 4 quite a bit to buy these changes from the tories/HMRC, but they will get that back and more once we are out of the way and they can charge the clients more dosh.

I still work on a lot of projects where big 4 consultants are also involved, and they have to bring in cheap bob-consultants these days as Brits down want to deal with their tulip, and we are too expensive to hire

This ^

The government likes me. The government wants to help me. They'll never come for me. They are my friends.

No need for panic but please don't live in a dream world where you imagine you are anything more than a character on some government officials spreadsheet.

[WordIsBond]

And....

Since they are talking about shifting some of the IR35 burden onto end clients, 2) may get a lot easier to accomplish.

Which is why I don't expect it.

I wouldn't be so sure. Right now, if they win an IR35 case, there may not be any money in the ContractorCo to recover. If they can make ClientCo pay some of it when they win a case, they are more likely to recover something. Chase the guy with deep pockets -- in this case, that's the client.

I suspect their review of IR35 will decide client has to pay employers NI, plus penalties. That gives clients incentive to A) declare borderline cases inside IR35 (to avoid penalties later), at which point contractors are stuck or B) help keep working practices and contracts outside IR35 -- which may also mean agents are forced by clients to fully disclose upper and lower contracts.

If they do this, some contracts will be dragged clearly inside, and others will be more clearly outside because clients AND contractors will be working together to keep them outside. And it would mean more money for HMRC, and better clarity for everyone.

Which actually wouldn't be a bad outcome. So you are right, I've talked myself into agreeing with you. This won't happen because it would make too much sense.

[WordIsBond]

Because it will need to be £560 a day to cover the tax required to cover the £100 of expenses (assuming it takes you into the 40% barrier its 1/1-0.325 which means you need to take £160 from the company to cover the £100 in expenses that was taken from the company tax free...

I get that.

If the client pays £400 / day plus £100 / day expenses, YourCo clears £400 / day. If the client pays £500 / day and YourCo pays £100 expenses, YourCo has £400 / day. It makes no difference to how much money YourCo has to reduce your rate and have the client pay the expenses.

If tax treatment is equal (you have tax liability on the expenses either way), it makes no difference, and you'd want to keep paying your expenses so you could save or splurge depending on your preference. If tax treatment is different if client pays them, then it would make sense to have the client pay them and reduce the rate.

[Zero Liability]

Which actually wouldn't be a bad outcome. So you are right, I've talked myself into agreeing with you. This won't happen because it would make too much sense.

Indeed, it wouldn't be, as finally the end clients would also bear the burden for something they benefit from as well, if they did not exercise due diligence. Not saying the burden is necessarily justified or justifiable, but so far the system has worked such that they can wash their hands of the whole matter. It'd be a good change, if they did go in that direction, because then it would be in everyone's best interest to keep the contract and WP outside, but I'm expecting something like an FLC to materialise instead, in all but name.