What is contracting?

**Charles Foster Kane** · 24 July 2007, 12:42

Originally posted by Euro-commuter

Why are many here so hung up on the Ltd Co and Dividends model as "contracting as we know it"?

I have contracted in France, where there is no IR35 because you pay social contributions on all income anyway, so there is no percentage to the dividend route. Conversely, the taxhomme has no incentive to force people into employment, because he'll get his money anyway.
Different model, same contracting.

I have contracted in Switzerland, where (at least for an EU worker) you have to be employed by a Swiss company. Like an umbrella, IOW. You're still taken on for your knowledge, for a specific application and a specific, usually short, time period.
Different model, still looks like contracting to me.

I have contracted in the Netherlands, where something similar applies.
Nevertheless, the place is full of contractors.

I have contracted in the UK, where agents and clients usually insist on a Ltd Co for fear they will have to pay your NICs and maybe taxes too. So what? Does it change what contracting is?

So (the point), IR35 and PCG and all that are just carbuncles on the face of an old friend. Details, not the essence of contracting.

Well done you

**freakydancer** · 24 July 2007, 12:51

**Euro-commuter** · 24 July 2007, 12:57

Originally posted by Charles Foster Kane

Well done you

1 of us is

. Is it me?

**SallyAnne** · 24 July 2007, 14:19

Originally posted by freakydancer

**Clippy** · 24 July 2007, 14:32

Mods, can we get this post removed please as it fails to meet one of the following prescribed topics:

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Hi, I'm a newbie.

**zathras** · 24 July 2007, 15:09

Originally posted by Euro-commuter

Why are many here so hung up on the Ltd Co and Dividends model as "contracting as we know it"?

I have contracted in France, where there is no IR35 because you pay social contributions on all income anyway, so there is no percentage to the dividend route. Conversely, the taxhomme has no incentive to force people into employment, because he'll get his money anyway.
Different model, same contracting.

I have contracted in Switzerland, where (at least for an EU worker) you have to be employed by a Swiss company. Like an umbrella, IOW. You're still taken on for your knowledge, for a specific application and a specific, usually short, time period.
Different model, still looks like contracting to me.

I have contracted in the Netherlands, where something similar applies.
Nevertheless, the place is full of contractors.

I have contracted in the UK, where agents and clients usually insist on a Ltd Co for fear they will have to pay your NICs and maybe taxes too. So what? Does it change what contracting is?

So (the point), IR35 and PCG and all that are just carbuncles on the face of an old friend. Details, not the essence of contracting.

Don't blame the PCG. The fault here is two fold

a) Employment Status. Which has grown up in this country with numerous bits of case law. The bit that is important for us, is where someone looks like an employee then they could actually been one. This is one reason why in the UK we work via a corporation.

b) S134 Which in a nutshell means that without a limited company the agency is obliged to deduct NI/Income tax from the fee. By making you work via an intermediary you get your income net.

S134 while it's title in a Tax consolidation act of 1988 was originally the brain child of the last Labour Government that got itself replaced by Mrs Thatcher!

Of course with a Right to be Self-Employed the reasons for S134,IR35,MSC regs et al vanish.

What is contracting?