IR35 - the end of a flexible workforce

[vwdan]

"But what about expenses?" I hear you all cry. Why should a freelance IT worker be allowed to claim tax relief on hotels, equipment? Why can't ALL workers claim this relief? What makes a [I]contractor[I] more entitled to claim his train fare tax free vs an agency temp or a permie?

Because, and I can't believe I'm having this conversation *again* on this forum, it comes down to two things:

1. What a company wants to pay in expenses. A company can have any expense policy it likes.
2. Regarding tax deductible, the question is whether they are going to a permanent place of work

Regarding point 1, my company happens to have a fairly generous expenses policy.

Regarding point 2, the law has been quite clear on temporary workplace rules. When I was a permie consultant, I claimed travel, accommodation and subsistence just like I do now. If I'm forced to work within IR35, then that puts me at an outright disadvantage compared to my consultancy colleagues.

[rogerfederer]

This is not the end of a flexible workforce. It is not the end of IT consulting.

It is the end of individuals using limited companies to avoid paying national insurance and income tax.

You are still free to work for whomever you like and you are free to negotiate your rate.

You can no longer employ your wife as 'company secretary' or pay dividends to avoid national insurance.


"But what about expenses?" I hear you all cry. Why should a freelance IT worker be allowed to claim tax relief on hotels, equipment? Why can't ALL workers claim this relief? What makes a [I]contractor[I] more entitled to claim his train fare tax free vs an agency temp or a permie?

95% of contractors are not legitimate companies; they are agency temps.

Let's do a simple example

Bob is a casual and works in Zara on tuesday, H&M on thursday and Tesco at the weekend. It takes bob 2 hours to commute to tesco. If Bob is feeling unwell, he can send his brother Tim in his place.

Sally works full time in Zara.

Should Bob be entitled to claim his train fare tax free? Should Bob be able to employ his non-working wife and split his earnings? Should Bob be able to pay himself dividends and avoid paying national insurance?

An utterly moronic example of the highest order; congratulations.

Contractors here don't work nearby to their home, they generally work away. The 2 year rule that applies to permanent staff, contractors and just about anybody in such work ensures that the distant location doesn't become a home from home.

Under such circumstances it seems fair to remunerate someone for traveling 4 hours to 10 hours commuting time. A significant number of people on this forum also work abroad now and again as a choice, from which they continue to pay various taxes through the UK Limited Company.

The irony of the new setup is that people will work nearer to their home and certain high profile cities will lose out on necessary flexible workers; even if the client pays a higher day rate it's unlikely to compensate for the travel and, the main clincher, accommodation.

If expenses by the employee in your scenario were not permitted when the worker is sent to other cities or abroad whilst via a UK agency/company then it's pretty obvious the staff would say "I'm not doing that". Removing expenses relief for contractors decreases contractor flexibility and is a race to the bottom.

Do you realise most of us contractors and consultants want to be flexible, want to travel and don't want to work in permanent jobs in which, most of the time, brains are numbed and skillsets drop away? Most of the permanent staff I've worked with aren't very good, if I'm being honest. There's a core 10% of really intelligent individuals just trying their best to push a bureaucratic system forwards in the best minor way they can.

I suspect you're probably a ten-a-penny contractor on a low day-rate who hasn't really used contracting to increase your skillset and better yourself over the last decade, from whence your ill-informed opinion comes.

[GhostofTarbera]

An utterly moronic example of the highest order; congratulations.

Contractors here don't work nearby to their home, they generally work away. The 2 year rule that applies to permanent staff, contractors and just about anybody in such work ensures that the distant location doesn't become a home from home.

Under such circumstances it seems fair to remunerate someone for traveling 4 hours to 10 hours commuting time. A significant number of people on this forum also work abroad now and again as a choice, from which they continue to pay various taxes through the UK Limited Company.

The irony of the new setup is that people will work nearer to their home and certain high profile cities will lose out on necessary flexible workers; even if the client pays a higher day rate it's unlikely to compensate for the travel and, the main clincher, accommodation.

If expenses by the employee in your scenario were not permitted when the worker is sent to other cities or abroad whilst via a UK agency/company then it's pretty obvious the staff would say "I'm not doing that". Removing expenses relief for contractors decreases contractor flexibility and is a race to the bottom.

Do you realise most of us contractors and consultants want to be flexible, want to travel and don't want to work in permanent jobs in which, most of the time, brains are numbed and skillsets drop away? Most of the permanent staff I've worked with aren't very good, if I'm being honest. There's a core 10% of really intelligent individuals just trying their best to push a bureaucratic system forwards in the best minor way they can.

I suspect you're probably a ten-a-penny contractor on a low day-rate who hasn't really used contracting to increase your skillset and better yourself over the last decade, from whence your ill-informed opinion comes.

Wow your 1st ever post that hits the nail on the head

Well done sir


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[psychocandy]

An utterly moronic example of the highest order; congratulations.

Contractors here don't work nearby to their home, they generally work away. The 2 year rule that applies to permanent staff, contractors and just about anybody in such work ensures that the distant location doesn't become a home from home.

Under such circumstances it seems fair to remunerate someone for traveling 4 hours to 10 hours commuting time. A significant number of people on this forum also work abroad now and again as a choice, from which they continue to pay various taxes through the UK Limited Company.

The irony of the new setup is that people will work nearer to their home and certain high profile cities will lose out on necessary flexible workers; even if the client pays a higher day rate it's unlikely to compensate for the travel and, the main clincher, accommodation.

If expenses by the employee in your scenario were not permitted when the worker is sent to other cities or abroad whilst via a UK agency/company then it's pretty obvious the staff would say "I'm not doing that". Removing expenses relief for contractors decreases contractor flexibility and is a race to the bottom.

Do you realise most of us contractors and consultants want to be flexible, want to travel and don't want to work in permanent jobs in which, most of the time, brains are numbed and skillsets drop away? Most of the permanent staff I've worked with aren't very good, if I'm being honest. There's a core 10% of really intelligent individuals just trying their best to push a bureaucratic system forwards in the best minor way they can.

I suspect you're probably a ten-a-penny contractor on a low day-rate who hasn't really used contracting to increase your skillset and better yourself over the last decade, from whence your ill-informed opinion comes.

Ummm you might not agree. I dont agree with this poster either. But is there any need for the name calling?

[WordIsBond]

Ummm you might not agree. I dont agree with this poster either. But is there any need for the name calling?

Well, he called the example (not the poster) moronic. He called the opinion (not the poster) ill-informed.

Examples and opinions are fair game for name-calling, IMO, and the names used seem highly appropriate.

Oh, he also said he suspects the poster is a 'ten-a-penny contractor.' Arguably, that's not name-calling but rather speculation about the person's rate, but you might have a point on this one, he did wander into ad hominem somewhat. Still, not very egregious for the Internet.

[BR14]

An utterly moronic example of the highest order; congratulations.

Contractors here don't work nearby to their home, they generally work away. The 2 year rule that applies to permanent staff, contractors and just about anybody in such work ensures that the distant location doesn't become a home from home.

Under such circumstances it seems fair to remunerate someone for traveling 4 hours to 10 hours commuting time. A significant number of people on this forum also work abroad now and again as a choice, from which they continue to pay various taxes through the UK Limited Company.

The irony of the new setup is that people will work nearer to their home and certain high profile cities will lose out on necessary flexible workers; even if the client pays a higher day rate it's unlikely to compensate for the travel and, the main clincher, accommodation.

If expenses by the employee in your scenario were not permitted when the worker is sent to other cities or abroad whilst via a UK agency/company then it's pretty obvious the staff would say "I'm not doing that". Removing expenses relief for contractors decreases contractor flexibility and is a race to the bottom.

Do you realise most of us contractors and consultants want to be flexible, want to travel and don't want to work in permanent jobs in which, most of the time, brains are numbed and skillsets drop away? Most of the permanent staff I've worked with aren't very good, if I'm being honest. There's a core 10% of really intelligent individuals just trying their best to push a bureaucratic system forwards in the best minor way they can.

I suspect you're probably a ten-a-penny contractor on a low day-rate who hasn't really used contracting to increase your skillset and better yourself over the last decade, from whence your ill-informed opinion comes.

Wow your 1st ever post that hits the nail on the head

Well done sir


Sent from my iPhone using Contractor UK Forum

a true pomposityfest!

worthy of assgruel and worty at their finest

well done <applause>

[SussexSeagull]

I worked 150 miles from home and had to stay up in the week. Cost me about £1,000 in expenses. The other contractor I started with lived 150 miles away in the opposite direction, suggesting they couldn't find resource locally. If it went inside IR35 it wouldn't have been worth my while doing it.

Some places are going to have to start paying expenses if they want contractors in under IR35.

[eek]

I worked 150 miles from home and had to stay up in the week. Cost me about £1,000 in expenses. The other contractor I started with lived 150 miles away in the opposite direction, suggesting they couldn't find resource locally. If it went inside IR35 it wouldn't have been worth my while doing it.

Some places are going to have to start paying expenses if they want contractors in under IR35.

Not quite - some places will have to pay hotel and train fares directly - I wouldn't trust your average umbrella or agency to do things correctly.

[GhostofTarbera]

I worked 150 miles from home and had to stay up in the week. Cost me about £1,000 in expenses. The other contractor I started with lived 150 miles away in the opposite direction, suggesting they couldn't find resource locally. If it went inside IR35 it wouldn't have been worth my while doing it.

Some places are going to have to start paying expenses if they want contractors in under IR35.

My record if £43000 for 1 year expenses in Amsterdam that’s only because I lost half my receipts


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[SussexSeagull]

Not quite - some places will have to pay hotel and train fares directly - I wouldn't trust your average umbrella or agency to do things correctly.

Exactly. You can tell the treasury is based in London where an Oyster Card takes you everywhere.