Treat contractors like employees - what would you do?

[original PM]

+1

What is the point of the risk in the risk/reward ratio if they take away a big chunk of the reward aspect. What is the point of the financial and administrative overheads of running a LTD if you're going to just be taxed as a permie? What is the point of being a permie with no job security, no duvet days, no sick days, no redundancy, no holidays etc etc just to only be on a higher rate than Joe permie.. It would have to be a much higher rate to make it worth it and with Bob on his way over I don't see that happening.

The way this government is slashing and burning I dread to think what they're going to come up with.

Your reward is that you can get higher pay rates and have the flexibility to move around on different contracts.

If the only thing your business sells is you and the only thing that the company buys is you then in essence you are an employee in all but name.

If however you company sells other services then you can class it is a proper business.

Not saying I agree or disagree with the proposals but as has been said many times before if the only reason you are running a LTD is to pay less tax then you are doing it for the wrong reasons.

[Jog On]

Are we sick of "Call me Dave" yet then?

I suppose everyone's pretty much getting some form of hammering except Joe permie and of course the Philip Greens of this world (cue ATW defending wealth creating non-doms because they're creating jobs/tax etc yadda yadda..).

Hopefully whatever they come up with someone will come up with something cleverer which is what usually happens - suddenly ditching the LTD and using a brolly doesn't seem all that unappealing

[Jog On]

Your reward is that you can get higher pay rates and have the flexibility to move around on different contracts.

If the only thing your business sells is you and the only thing that the company buys is you then in essence you are an employee in all but name.

If however you company sells other services then you can class it is a proper business.

Not saying I agree or disagree with the proposals but as has been said many times before if the only reason you are running a LTD is to pay less tax then you are doing it for the wrong reasons.

I actually do have some other stuff going on through this LTD that I will turn my attention back to, Plan B is through a different LTD altogether.

The main reason I am running this LTD is to contract not through an umbrella company - how many other LTD company contractors here can say otherwise?

[GreenLabel]

Your reward is that you can get higher pay rates and have the flexibility to move around on different contracts.

At significant risk of substantial bench-time.

If the only thing your business sells is you and the only thing that the company buys is you then in essence you are an employee in all but name.

By that rationale, your plumber and electrician are both your employees.

Not saying I agree or disagree with the proposals but as has been said many times before if the only reason you are running a LTD is to pay less tax then you are doing it for the wrong reasons.

Paying less tax is the main driver behind why I run a LTD company. It seems to be working just fine for me. Who determines what the "right" and "wrong" reasons are? Why is a desire to minimise the amount of money I have to hand over to the gummint such a wrong reason?

[Alf W]

I suppose everyone's pretty much getting some form of hammering except Joe permie and of course the Philip Greens of this world (cue ATW defending wealth creating non-doms because they're creating jobs/tax etc yadda yadda..).

Hopefully whatever they come up with someone will come up with something cleverer which is what usually happens - suddenly ditching the LTD and using a brolly doesn't seem all that unappealing

Remember the Tory line.

"You're all in this together - more swan Gideon?"

[doodab]

Personally I think paying income tax and employees NI contributions (or self employed ones) on contractor rate income would be a fair deal. It's always seemed to me that the reclaiming of the "lost" employers NI from the contractor and not the hiring company was punitive as it meant contractors within IR35 actually paid more tax than an employee would.

[d000hg]

It's entirely fair if everyone earning money is on the same tax structure. If contractors pay employer NI, employee NI and PAYE that's not the same thing though. Allowing individual contractors to properly work as self-employed wouldn't be such a bad thing (that's what most tradesmen I come across seem to do, rather than form Ltds.

[xoggoth]

It would be fair enough if they took proper account of all the things the employee gets for free but they never do.

[d000hg]

It would be fair enough if they took proper account of all the things the employee gets for free but they never do.

That's covered by a high daily rate.

[Not So Wise]

The whole Ltd for one man company’s has always been a pretty artificial construct and it would a good thing to see it become a thing of the past but only they if properly balance things out.

Contractors don't get permie benefits/protections but they do get tax flexibility, this combined with slightly higher rates makes contracting worthwhile, but if they just take out the tax flexibility (most likely) we would all instantly be the equivalent of IR35 caught and it would no longer really be worth contracting Actually many cases, after the recession and the rate cuts/freezes that went with it, would be far worse off than permies once you assigned a value to all their benefits

What they would be far better off doing is first fixing the sole trader category (or make a separate one for one man’s) to make that useable/beneficial again and then just have us all move to that, then it would be a pretty straight forward task to clean up and rewrite the rules for Ltd’s.

But in my opinion, as said above, got feeling UK contractors are likely to get the worst possible scenario and can see us all being automatically deemed the equivalent of IR35 caught, especially as the whole one man Ltd thing seems to be spreading again as companies use it everywhere to get around employee benefits/rights costs

If i had not already decided to get the hell out of UK that would defiantly make my mind up for me