Does anyone else feel like they are being financially ripped by the tax-man

[eek]

Wow, how much tax do you want the poor sods on £15k to pay?

£110,000 equates to about 70k after tax, surely? Excluding pension contributions but that's not going to the tax man.
Income tax calculator: Find out your take-home pay - MSE

Why are you putting more than 40 hours in? Bad business model if you're on a day rate.

As for Amazon, etc, HMRC have a different battle to fight there. They can afford better lawyers and accountants for starters (not that I disagree that there shouldn't be some sort of sales tax of, say, 1% to be paid to the tax authority of whichever country the purchase was made in to help compensate for that country's shops losing out).

A tax 2% of turnover for digital marketplaces and digital advertising display boards (google, facebook) from April was in the budget..

[LondonManc]

Those on £15k will hardly have to pay any tax at all.
In any case, you have clearly missed the point entirely, how can paying 56% tax, leaving you with 44%, be considered fair or right! The Tax Man is never greedy right?
I'm all for paying tax - but it needs to be reasonable and fair - otherwise what is the point in aspiring to do well in life.
When over half your income is going in tax!
And as for 40 hours, you have no idea of the hours I put in.
So if you think I'm being greedy for having the temerity to have the greater share of my hard earned - then wait till you find about how much tax the likes of Amazon, Google etc pay - yet HMRC doesn't appear to be going after them - HMRC showing just how fair they are!

Wow, how much tax do you want the poor sods on £15k to pay?

£110,000 equates to about 70k after tax, surely? Excluding pension contributions but that's not going to the tax man.
Income tax calculator: Find out your take-home pay - MSE

Why are you putting more than 40 hours in? Bad business model if you're on a day rate.

As for Amazon, etc, HMRC have a different battle to fight there. They can afford better lawyers and accountants for starters (not that I disagree that there shouldn't be some sort of sales tax of, say, 1% to be paid to the tax authority of whichever country the purchase was made in to help compensate for that country's shops losing out).

[GhostofTarbera]

Apologies for the use of language - it's the only thing that I could think of to describe the brutality of the situation being faced re: IR35.

Have been given Inside IR35 SDS by client, who just went through the HMRC CEST tool and have been told to use an Umbrella post April.

I've been going through the figures and it is horrific.

Have a day rate of £500, take home is looking around 55%!
With lots of evening and weekend, I can push the day rate to equivalent of £700-750 - which brings take home down to 52%! (The figures don't include pension contributions etc - I don't have one)

So for ~5.5-6 months - almost half of the year! - every penny I earn is going straight to the Tax Man! - How on earth is that fair? - how do they call that paying "your fair share of taxes!"

Not only that, where I live, I have never found anything local, all contracts are quite far away and require accommodation during the week. Taking into account accommodation and travel expenses (which are no longer claimable), the actual take home comes down to around 44%!

I am losing the will to live! Working away from family during the week along with putting in very long hours is the sacrifice one makes to strive towards a better quality of life and providing a better start for the children so they don't have to go through the hardships.

Sorry about the post, just needed somewhere to share my frustration (putting it politely) at the given situation.

This is a massive double whammy - not only the tax side - but this will force me to look for only local contracts to keep expenses down. These are few and far between. My previous time between contracts was 7 months!

Yes


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[eek]

Those on £15k will hardly have to pay any tax at all.
In any case, you have clearly missed the point entirely, how can paying 56% tax, leaving you with 44%, be considered fair or right! The Tax Man is never greedy right?
I'm all for paying tax - but it needs to be reasonable and fair - otherwise what is the point in aspiring to do well in life.
When over half your income is going in tax!
And as for 40 hours, you have no idea of the hours I put in.
So if you think I'm being greedy for having the temerity to have the greater share of my hard earned - then wait till you find about how much tax the likes of Amazon, Google etc pay - yet HMRC doesn't appear to be going after them - HMRC showing just how fair they are!

15% of the tax is hidden from employees - Employer NI has been increased over the years because it was just about the only thing that can be increased when a Government has said income tax, employee NI and VAT won't be changing.

And I will repeat this again Employer NI and keeping it coming in is the sole reason for this change, they don't want employers abusing it by pretending their staff are "self employed contractors".

Thanks for the rough estimate, that is an eye-watering amount and would certainly have me worried. Currently looking at some IR35 insurance to cover just in case. Accountant reckons if ltd co is closed down (MVL etc) then makes it harder for HMRC.

You won't legimately get IR35 insurance as your client has already stated they feel you were inside.

As for closing it down that may help, it may not - I suspect it would depend on whether you stayed or not - as the question becomes would HMRC see it as Fraud. Leave and you could probably argue it wasn't, stay and I really, really wouldn't want to be the person trying to argue your outside determination prior to April 2020 wasn't...

Quick side question, did you have IR35 contract reviews for any contracts or renewals up to now?

Edit - sorry for the lack of cheery advice - it's a very large sum of money you would be arguing over...

[GummiBear]

£500 * 220 = £110,000.

If you feel "financially raped" by paying tax on that, then boo bloody hoo. Try working 40 hours a week for £15,000 like a lot of people have to.
Societal greed is sickening.

Those on £15k will hardly have to pay any tax at all.
In any case, you have clearly missed the point entirely, how can paying 56% tax, leaving you with 44%, be considered fair or right! The Tax Man is never greedy right?
I'm all for paying tax - but it needs to be reasonable and fair - otherwise what is the point in aspiring to do well in life.
When over half your income is going in tax!
And as for 40 hours, you have no idea of the hours I put in.
So if you think I'm being greedy for having the temerity to have the greater share of my hard earned - then wait till you find about how much tax the likes of Amazon, Google etc pay - yet HMRC doesn't appear to be going after them - HMRC showing just how fair they are!

The very rough estimate is that the tax on an inside IR35 contract is 25% of the income.

So HMRC would be asking / arguing over £110,000 were you to stay and they came knocking...

And HMRC may still come knocking if you leave, we just think it's slightly less likely...

As for will HMRC come knocking - why do you think the timing of the recent Nationwide case is so interesting to those of us with a cynical mind...

Thanks for the rough estimate, that is an eye-watering amount and would certainly have me worried. Currently looking at some IR35 insurance to cover just in case. Accountant reckons if ltd co is closed down (MVL etc) then makes it harder for HMRC.

[eek]

I don't know how to work this out or what it would be - is it based on the dividends paid - as I haven't take much dividends out - left most in the company.

The very rough estimate is that the tax on an inside IR35 contract is 25% of the income.

So HMRC would be asking / arguing over £110,000 were you to stay and they came knocking...

And HMRC may still come knocking if you leave, we just think it's slightly less likely...

As for will HMRC come knocking - why do you think the timing of the recent Nationwide case is so interesting to those of us with a cynical mind...

[LondonManc]

£500 * 220 = £110,000.

If you feel "financially raped" by paying tax on that, then boo bloody hoo. Try working 40 hours a week for £15,000 like a lot of people have to.
Societal greed is sickening.

[GummiBear]

Have you just arrived at this conclusion or have you knowing it for then year plus its been on the cards?

Your client has left this very late. Do you have enough time to hand your notice in and get out before April?

Not a very nice choice of title even with the apology IMO.

Guess knew it was on the horizon, but was hoping it would go outside IR35. I do have a fair amount of autonomy, no daily supervision, direction or control, if anything, I'm telling client what needs to be done. Can WFH or office - no set days. Thought this might sway it.

Client informed us of the decision late-feb. Have been looking at umbrellas, reading around this forum ever since.

Appreciate it's not a nice choice of title - don't think I've ever used such language in any other context - but this is affecting livelihoods and quality of life - if over half your hard earned is going straight to the tax-man - this is some medieval level of taxation.

How long have you been at this client?

The role started of as a short 3 month contract with no extension. As it happens, it got extended for another 3 months - client always saying will be no further extension etc - so always had the view contract will be coming to an end. This has now continued and will be 4 years in the summer.

As you are accepting that the client sees you as inside IR35 how are you going to prove that the contract prior to April 2020 was actually outside?

I had thought I was outside based on points I've raised above, but having done some more reading, it would appear, given the length of time (though I had no hindsight it would ever last this long) and perhaps the over-arching control clause - as in the recent Nationwide case - I'm truly buggered!

And given point 2 could you afford to pay the tax HMRC would be seeking were HMRC to ask the question above.

I don't know how to work this out or what it would be - is it based on the dividends paid - as I haven't take much dividends out - left most in the company.

I'm hoping - praying - that hmrc are going to live up to the word and not go back after previous years as they have said.

If I leave, I will have no money coming in, no idea how long on the bench I'll be, I'll only be able to look for local contracts - and the rate is not going to be anything like as good as I've got here.

If I stay, at least I've got money coming in but then have paranoid thoughts about the tax-man come knocking on the door.

What hell is this!

[BrilloPad]

So for ~5.5-6 months - almost half of the year! - every penny I earn is going straight to the Tax Man! - How on earth is that fair? - how do they call that paying "your fair share of taxes!"

HMRC determine what is fair - and can decide so retrospectively.

[unixman]

Not particularly helpful to the OP right now, but I feel the current chaos will be temporary. Sooner or later, market forces will resume and profitable business will continue. The difficulty is in riding the storm meanwhile.