Large law firm just sent out IR35 email

[PeterSim]

Making corporations assess status is a massive job, typical of HMRC to force companies to take on all this additional cost and risk and not care one bit. Firms will struggle to do it and are more likely to just refuse contractors all together like some of the banks have done. I was surprised to hear the large law firm is individually contacting each contractor and dealing with each one a case by case basis. They have been phasing out contractors for years though, so probably no where near as many as there once was.

[LondonManc]

You would have to be living under a rock to not know about IR35. I knew about IR35 before I even started contracting and my accountant gave me a 10 point list of indicators that puts contractors outside. Also they changed my contract before I started to make sure it would adhere to outside IR35.

I don't think inside IR35 is the end of the world, the tax is comparable to going LLC, it is not much different. My one colleague who has been contracting for years wants to setup his own umbrella company to get around this non-sense. I wonder how difficult that is?

The main issue is, not being able to claim expenses, from what I can see. Which considering the politicians are known for claiming ridiculous expenses, is a bit of a slap in the face towards the plebs. Alright for some I guess.

Erm, no. The main issue is that you'll have no benefits of running a limited co - you'll become the employee of an umbrella and be taxed at permie rates. If your other half is a shareholder, this is where the biggest fecker is - you go from both getting a salary (e.g. 12.5k for you, 10k for them) and a maxed out dividend take totalling about 80k at lowest rate tax to 100k taxed at fully perm rates.

If you currently work in London but have to stay over in London, you're then going to have to be a rate snob because your expenses now come out of that permie-equivalent take home. A DOUBLE WHAMMY!!!

[simes]

Crazy thing is, if I go back to perm at a law firm i will go from sending £50k in taxes including VAT to HMRC and corp tax and personal tax, to less than £20k including national insurance. Remind me again how this war on contractors is going to generate more tax revenue for greedy HMRC?

Yup, something I have too been saying for the last few months...

Tax income will stay the same or decrease as everyone goes Perm, and all that the HMRC will have succeeded in doing is destroy a perfectly viable short term method of project delivery.

And yet, they will still declare it an unmitigated success.

[northernladuk]

Making corporations assess status is a massive job, typical of HMRC to force companies to take on all this additional cost and risk and not care one bit. Firms will struggle to do it and are more likely to just refuse contractors all together like some of the banks have done. I was surprised to hear the large law firm is individually contacting each contractor and dealing with each one a case by case basis. They have been phasing out contractors for years though, so probably no where near as many as there once was.

And in other news the sun will come up tomorrow.