Crackdown on personal service companies could raise £400m in tax

[Jog On]

What's to stop Jonnie contractor taking a 6 month gig, taking 2 weeks paid holiday and going off sick for another 2?

Will they have clauses in the new permanent contracts against this? How will that work?

[Danglekt]

You're an expert because you're an expert, not because you're a contractor. You could take a permie role with the same client and continue to do exactly the same thing. Or alternatively they could find another you, someone with exactly the same skill and hire them as a permie and you'd now work in exactly the same way and doing exactly the same job as a permie.

Sorry to add another reply to this comment, but you are also forgetting that most senior roles have between 3 months and 6 months notice period, add in the approx 1 month recruitment period and 1 month "getting up to speed" and thats 5-8 months of business benefit.... Having a senior bod in a drawer in the shape of a contractor is a serious point of difference that adds big value to clients

[VectraMan]

But a major point you are missing is that most organisations do not want to have all the skills "in-house" because they do not need those skills all the time.

Bah! I wasn't suggesting for a minute that there isn't a raison d'etre for contractors, just that once you turn up you're working in the same way as a similar permie. The reasons why a client might hire you on a temporary basis rather than a permanent one doesn't change that.

[Danglekt]

Bah! I wasn't suggesting for a minute that there isn't a raison d'etre for contractors, just that once you turn up you're working in the same way as a similar permie. The reasons why a client might hire you on a temporary basis rather than a permanent one doesn't change that.

And by that logic I suppose I should employ a plumber 40 hours a week on the off chance I have a leak....

There isn't a single role that logic doesn't apply to!

[MrMarkyMark]

just that once you turn up you're working in the same way as a similar permie.

As I said, there are some of us where a similar perm role does, simply, not exist, even within consultancies.
That's why the term SME exists in some areas and most, if not all, perms will not be it.

[VectraMan]

And by that logic I suppose I should employ a plumber 40 hours a week on the off chance I have a leak....

There isn't a single role that logic doesn't apply to!

So you go to a client for an hour as a one-off job with your own tools and fix a problem? Is that the way most contractors work?

[d000hg]

By that logic if a job ad quoted the take home pay then you wouldn't be paying any tax. Huzzah!

We're veering off-topic but the job ad couldn't quote take-home pay without knowing your circumstances - other income streams, etc. Unless they actually did abolish income tax and take more CT to compensate... which would be entirely feasible albeit pretty pointless.

[BlasterBates]

This has the makings of a record thread....

[WordIsBond]

So you go to a client for an hour as a one-off job with your own tools and fix a problem? Is that the way most contractors work?

No. But I have one client who pays me a retainer so they can pick up the phone and talk to me for up to 5 hours a month, because they have no one like me.

And two of us did a job for them this summer that took seven weeks. They have no one like either of us.

And I have another client that gave me a three week job last month, because they don't have anyone like me, either.

And so on. Hardly anyone has anyone like me, but hardly anyone needs anyone like me for more than isolated jobs. But some of those isolated jobs are quite a bit bigger than a month....

[GB9]

How much would HMRC lose in VAT if we all got put on payroll?

I can't see a month being viable. Short of sticking up a few Web pages you would achieve nothing. It took me 6 months at one client just to document the issues and propose a solution.

And at current client I too don't do the same role as any permie. Thank God.