contracting, rates, and tax

[ratewhore]

I understand the point that you and Mal and the author were making, but actually I don't think it's government's job to compensate people for risks they take freely. If the risk is not worth taking in itself, people shouldn't take it. Furthermore, for government to insure against it, is to interfere in the market mechanism that works against bad choices.

I disagree. When those risks are taken to the benefit of UK PLC, I believe there should be an element of reward to that...

[The Lone Gunman]

I understand the point that you and Mal and the author were making, but actually I don't think it's government's job to compensate people for risks they take freely. If the risk is not worth taking in itself, people shouldn't take it. Furthermore, for government to insure against it, is to interfere in the market mechanism that works against bad choices.

The problem with IR35 is not the legislation itself. If it were we could just accept it and change our rates to make it worth our while. The problem is that we set our acceptable rates based on our assessment of the risks involved. If we get IR35 wrong then our original assessment was wrong however we can not go back 6 years to recover the earnings IR35 taxes away.

[expat]

Scheduled D self employed individuals pay less overall tax than their PAYE counterparts because of the risk they undertake. The tax system recognises this fact.

Limited company contractors enjoyed the same advantage (if a little indirectly) until IR35.

This, I believe, is the point he was making.

I understand the point that you and Mal and the author were making, but actually I don't think it's government's job to compensate people for risks they take freely. If the risk is not worth taking in itself, people shouldn't take it. Furthermore, for government to insure against it, is to interfere in the market mechanism that works against bad choices.

[swamp]

The compensation for loss of security and state benefits comes from the higher rate. If you're not getting a high enough rate to compensate, even on 100% PAYE, then your rate is not high enough.

Scheduled D self employed individuals pay less overall tax than their PAYE counterparts because of the risk they undertake. The tax system recognises this fact.

Limited company contractors enjoyed the same advantage (if a little indirectly) until IR35.

This, I believe, is the point he was making.

[malvolio]

Well OK, he's not wrong - but Mr Roback is simply repeating what many have been saying for the last 10 years...

[expat]

CUK front page, Contractors not in it for tax avoidance

IR35 was a major blow for contractors who had become ‘self-employed’ on the understanding that the tax advantages would compensate for the loss of security and state benefits.

The compensation for loss of security and state benefits comes from the higher rate. If you're not getting a high enough rate to compensate, even on 100% PAYE, then your rate is not high enough.