Dodgy contractor schemes, undercutting and competition

[doodab]

See my reply above - this is about perception & what you personally pay. Not your Ltd Co.

It's ok - I'm pretty au-fait with how Dividends work.

I have no doubt your Ltd Co has paid more that I've earned in a year but thats your Ltd Co, you might as well tell me that M&S paid more tax.

The two structures are so different that you either compare net contributions to the exchequer or you pick some basically random numbers out of the ether. If you're going to willfully miss or avoid that point there is no point in debating it.

[Old Greg]

The two structures are so different that you either compare net contributions to the exchequer or you pick some basically random numbers out of the ether. If you're going to willfully miss or avoid that point there is no point in debating it.

What I find interesting (and I'm not taking a shot at CM here cos I'm not like that) is the outraged denial particularly in the hallowed grounds of the NTRT thread that a low cost base leads to undercutting - it just seems obvious to me. I guess it doesn't fit with what seems to be the NTRT position that dodgy schemes are really no different from Ltd small salary, divis + CT.

[AtW]

Oh and ATW don't you weigh in here with your guff. You are in the unique (certainly in here) position that you actually run a bona fide business with employees etc. I don't want to get into a stupid debate with you.

I think in all fairness you don't want to get into a stupid debate with me in any case.

My view that Ltd contractors pay corp tax and then income tax on dividends, NICs should be merged with income tax and therefore make it completely clean.

Splitting ownership (shares) with wife is also OK in my view given that wifes in UK own 50% anyway - it's only fair that they'll own 50% of liabilities then.

[AtW]

What I find interesting (and I'm not taking a shot at CM here cos I'm not like that) is the outraged denial particularly in the hallowed grounds of the NTRT thread that a low cost base leads to undercutting

To be fair they are right - the main objective of those dodgy schemes is to screw over the Govt (all taxpayers) rather than specific contractors. Typically people who got into those schemes had good enough contracting record to make lots of money and they really resented paying tax on that whole wad.

[d000hg]

I doubt it's happened very much to me, and I'm expensive.
The "scheme folk" are judgement-lacking cretins, perhaps they congregate in certain sectors not others?

You were a permie until what, 2 years ago? I hardly think 2 years as a contractor represents a good sample, especially when you're trying to go the consultancy rather than contractor route in the first place.



OG's point hardly seems worth debating, it's so obvious. It's the same as a builder who offers a decent discount for cash-in-hand versus one who insists on doing everything through the books. They can cahrge the same and one makes more profit, or one can undercut the other.

[mos]

I came across consulting companies wining business on the basis of phoney experience/knowledge they did not really have. Scheming and dishonesty pays these days.

[doodab]

I came across consulting companies wining business on the basis of phoney experience/knowledge they did not really have. Scheming and dishonesty pays these days.

It is a sad fact of modern life that all daily transactions have to begin with the presumption that someone is trying to screw you.

[Old Greg]

To be fair they are right - the main objective of those dodgy schemes is to screw over the Govt (all taxpayers) rather than specific contractors. Typically people who got into those schemes had good enough contracting record to make lots of money and they really resented paying tax on that whole wad.

1. Aim and effect are different.
2. Anecdotally, I think a lot of newbies got sacked into schemes. Perhaps that's not the general picture.

[DonkeyRhubarb]

It is possible scheme users could have undercut Ltds. Just like it's possible Ltds could undercut umbrella users.

But I don't think this is anything you need to worry about in future.

Any scheme users that aren't bankrupt are going back to Ltd.

[BrilloPad]

I dare not stray onto the holy ground of the NTRT thread for fear of angering the Mighty Ones.

But you did. I hope its a perma ban. Although, since you did call a well know walter-mitty poster a nonce, I hope its reduced to 10 years.