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

[d000hg]

Errmmm, Perms usually get some form of Redundancy?

Peanuts typically unless you're an important person on a great salary to start with?

[MrMarkyMark]

Peanuts typically unless you're an important person on a great salary to start with?

OK, well, I will have to concede you on that point.
Been whittled away, like any workers perks, I guess.

[LondonManc]

Peanuts typically unless you're an important person on a great salary to start with?

Peanuts to a current contractor but depends upon what you negotiate at the start and your length of service. Would cover PC's JSA claims for a few years.

[d000hg]

The way some speak on here, its like they want to roll over and take everything they are given.
Because we deserve it etc. etc.

I think there are some places where contractors have got away with too much, for too long - we're on to a great thing and have been for so long we view it as our "right" rather than a wonderful "perk".
However the discussed changes seem to swing things way to far in the opposite direction.

Neither is about "deserving" anything though.

[MrMarkyMark]

I think there are some places where contractors have got away with too much, for too long - we're on to a great thing and have been for so long we view it as our "right" rather than a wonderful "perk".
However the discussed changes seem to swing things way to far in the opposite direction.

Neither is about "deserving" anything though.

True, in some cases.
It is ridiculous, for example, that a generic HR bod can have a LTD company, for example.

The discussed changes are completely unworkable and potentially limit tax take, IMO.

[diseasex]

He adds: “A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company. But a middle-manager brought in to do maternity leave cover at a firm will in future have to go on the firm’s payroll."

<admin>Best not to paste the whole article in here This was linked to way back there <---- - it's the article on Contractor Calculator for anyone who hasn't read it.</admin>

[seeourbee]

I actually agree on a contract limit - 18 months seems sensible to me. I know someone at the Foreign Office who's been a "contractor" for 9 years now (and counting). Those examples have ruined what was a good business model.

[VectraMan]

Errmmm, Perms usually get some form of Redundancy?

£1400 is what I got in redundancy from my last job after 2 years. That's the minimum, and it wouldn't have mattered how great my salary was. I think everybody getting a month's salary per year of service, as some people believe, is actually quite rare these days.

If I'd been a contractor for that time, even if I paid all my taxes, I'd have made at the least £1000 per month more. So would have had £22000 instead of £1400.

[MrMarkyMark]

£1400 is what I got in redundancy from my last job after 2 years. That's the minimum, and it wouldn't have mattered how great my salary was. I think everybody getting a month's salary per year of service, as some people believe, is actually quite rare these days.

If I'd been a contractor for that time, even if I paid all my taxes, I'd have made at the least £1000 per month more. So would have had £22000 instead of £1400.

Thanks for a true life example.

I would have never known it was quite that low, although I haven't had a perm role for nearly 16 years. I'm sure it was normally better than that, even for junior people, in those days.

[VectraMan]

According to the Guardian’s chief political correspondent Nicholas Watt, around 100,000 will be affected by new rules: “The government is proposing that a consultant using a personal service company would be obliged to move on to the payroll if they work for a business for more than a month. Businesses, rather than the individual, would be responsible for overseeing the rules. An agency would be responsible if they provide consultants to businesses.”

I.e. in most cases, we'd be PAYE with the agent and not the client.

I think it's clear what will happen here is not being on the client's payroll, which nobody wants, or even necessarily the agent's payroll, rather that both will have a responsibility for ensuring that you pay yourself via PAYE. I.e. it'll be in the contract, and they might ask for proof or you'll be in breach. Otherwise it would be an instant death sentence to umbrella companies who aren't the ones doing anything wrong.