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

[MrMarkyMark]

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?

You just don't get that we, contractors, are not all the same.
You are also not listening, as there are quite a few others, in a similar situation, as myself, on here, but you choose to ignore what they say.
A permy does not offer a specialist consultancy type service across a particular discipline.

That is the difference.

I should know, I have been doing this exact specialism for nearly 16 years.
In addition, due to demand, my rate has increased over this time, rather than decreased

Have you thought about switching career, I hear HMRC have a few opportunities?

[MicrosoftBob]

Of course all contractors taken on this way would gain basic employment rights, so no more, sorry we don't need you today. Or we need you to take three weeks off at Christmas. The other perennial favorite 10% pay cut. There would of course be sick pay, holidays, warnings, discrimination law suits and all the fun that goes with this.

You can see were this is going ...an IT Trade union - Bastards United - So any time a future member is treated badly by a client, especially an outsourcer they can all go out on Strike.

If you squint at him he looks exactly like Gordon Brown.

What about Contractors League of Information Technologists, that would be a catchy name for a union

All we would need is a commander to lead it

[MrMarkyMark]

All we would need is a commander to lead it

I nominate Suity

[LondonManc]

I nominate Suity

He'd never find it. We're all doooooomed!

[BoredBloke]

Of course all contractors taken on this way would gain basic employment rights, so no more, sorry we don't need you today. Or we need you to take three weeks off at Christmas. The other perennial favorite 10% pay cut. There would of course be sick pay, holidays, warnings, discrimination law suits and all the fun that goes with this.

You can see were this is going ...an IT Trade union - Bastards United - So any time a future member is treated badly by a client, especially an outsourcer they can all go out on Strike.

If you squint at him he looks exactly like Gordon Brown.

I wouldn't bank on that. I'd say we'd end up with the worst of both worlds. We'd be paid and taxed like a permie but have to act like a self employed contractor in all other respects. Caught by IR35 means you can be taxed as an employee but it doesn't infer any employee employment type benefits.

[vetran]

He'd never find it. We're all doooooomed!

we could sack him after a month looking we would be regarded as a long contract.

[vwdan]

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.

This is properly short sighted. There are basically only two engagement methods for my type of consultancy:

1. Direct to client - almost always to do a specific project in a technology where they don't have the required in-house skills. They're never going to pay someone at my level to sit there all year round to watch the lights flash - they want me to rock up, design it, build it and get out. At best they'll have someone with cursory day to day skills - at worst it just gets dumped on whichever poor soul didn't keep quiet. Sometimes they keep in touch, sometimes they don't.

2. Into a consultancy - normally to supplement a team that is overstretched, or don't quite have the skills. They might employ someone like me - but only one, or two full time and only if they can justify it.

The second one is particularly close to my heart right now as I've just taken a permie job with a consultancy and my utilisation rate is absolutely on the floor at the minute. Right now they're just not getting the projects in - it's going to have to pick up or they won't be able to justify me and that'll be end of that. Not a problem in principal because we had a grown up discussion about - but it'll become a problem if they kill contracting like they're trying to do.

I know I'm mostly preaching to the choir but this entire thing really upsets me, because personally, I can hand on heart say I work almost exactly the same whether as a 'self employed' contractor, or as a permie consultant. Travel is similar, expenses are similar, the projects are similar - but while I'm doing all these things through someone else's company they're all legitimate business, but when I do the same things through my own 'PSC' I'm a tax dodging, piss taking joker.

[VectraMan]

You just don't get that we, contractors, are not all the same.

Exactly. My point was "you're an expert because you're an expert, not because you're a contractor". There are contractors that do nothing like you do; perhaps they man a support phone line 9-5 doing exactly what they're told to do. They should probably be inside IR35, but they're still contractors. The term "contractor" doesn't define a way of working that's different to the way a permie works. You might be different, but the majority probably are not. My experience is being part of software teams, both as a permie and as a contractor, and there's no difference day to day. Any decent team has people with different skills so you don't have to be a contractor to be doing something that nobody else can do.

If one of your clients decided they had enough work to warrant keeping you around permanently and offered you a huge enough salary to make it worth it, you could take it. You could take it and carry on doing exactly the same job in the same way as before except you're now an employee.

[AtW]

As there is no legal definition of a "Personal Service Company" I would suggest that jumping to conclusions is the only way to interpret these statements.

It's the checkbox on your tax return. Anybody that checked it is dooooomed...

[vetran]

It's the checkbox on your tax return. Anybody that checked it is dooooomed...

I know how they are using it but frankly it makes PPI look legal.