Discussion document on IR35 published

[expat]

It's a supply and demand question, isn't it? .....
Of course, if contractors can't afford to walk away, they can't insist a client pay extra for this. But I think where this is going is most clients will declare all contracts inside IR35, contractors will get hammered on expenses, and a lot of contractors will get out of the game. When that happens, those who are left and are good at what they do will be in high demand.

When that happens, fast track visas will be in high demand.

Edit: ISTM that it is a very long time since "good at what they do" has been on the requirements list for contractors in reality, mainly because agents have commoditised the market and they have no idea what "good at what they do" might mean for a contractor.

[Danglekt]

You might but that's actually worse. For most of the public sector VAT is just an accounting feature. The fact you charge the Government 20% and don't return all of it straight back to HMRC isn't a argument that you pay extra, more one for you actually costing HMRC money, they contribute the 20% but only get 17.4% back....

hmm... I don't agree, but I can see your perspective I suppose. Your looking at in theory, but in practice if they used a contractor that didn't charge VAT the service being mobilised or whatever wouldn't keep 20% back to pass back to the Dept, who then pass it back to HMRC, so you point doesn't quite hang together, but I see where you are coming from.

I'm happy to disagree with you though, and don't want to fill a thread up with a discussion of semantics. The main thrust of my post was in £ terms I pay more to HMRC than I did as a permie. That is not true in % terms of course, but there is an assumption contractors cost HMRC income, but I'm making the point that it is a matter of looking at it in totality and not as a like for like - hence my point about reframing the discussion.

[WordIsBond]

I think that that is false, and actually I resent the easy insult. I am good and I am not cheap, but I don't want to run a business and I will work inside IR35; obviously I prefer to be outside but I don't have explicitly different rates for in and out.

I envy you. I don't have either spare time or energy to spend on resent Internet insults. You must have a good life.

Not that I'd expect it to ever happen under today's rules, but I wouldn't have a different rate for in and out, either.

But if they change the rules and a client gratuitously throws me in just so they can avoid risk, they'll pay for it, or find someone else. No reason for me to be out of pocket just so they can feel secure.

Edit: ISTM that it is a very long time since "good at what they do" has been on the requirements list for contractors in reality, mainly because agents have commoditised the market and they have no idea what "good at what they do" might mean for a contractor.

I suppose that is generally true. I go direct, but I'm in a particular niche, and almost everyone knows me. If I weren't good at what I do, I'd be done.

[expat]

I envy you. I don't have either spare time or energy to spend on resent Internet insults. You must have a good life.

Thanks

I just meant that I feel that your categorisation was too easy and I know it's not so because I don't fit it. I don't like the idea that one is "a real business", or cheap and not up to much. In fact that's what's wrong with IR35 IMHO. Sorry if that's not what you meant.

[WordIsBond]

Actually, it wasn't my categorisation, you were replying to someone else, and I arrogantly inserted myself into the conversation as if anyone should care what I thought about it.

I thought his categorisation was a little too easy, too, FWIW. As if anyone cared what I thought on that, either.

[expat]

Actually, it wasn't my categorisation, you were replying to someone else, and I arrogantly inserted myself into the conversation as if anyone should care what I thought about it.

I thought his categorisation was a little too easy, too, FWIW. As if anyone cared what I thought on that, either.

Damn. Note to self: Self, read posts before "replying".

[Acme Thunderer]

hmm... I don't agree, but I can see your perspective I suppose. Your looking at in theory, but in practice if they used a contractor that didn't charge VAT the service being mobilised or whatever wouldn't keep 20% back to pass back to the Dept, who then pass it back to HMRC, so you point doesn't quite hang together, but I see where you are coming from.

I'm happy to disagree with you though, and don't want to fill a thread up with a discussion of semantics. The main thrust of my post was in £ terms I pay more to HMRC than I did as a permie. That is not true in % terms of course, but there is an assumption contractors cost HMRC income, but I'm making the point that it is a matter of looking at it in totality and not as a like for like - hence my point about reframing the discussion.

I think it is your point that doesn't hang together. HMRC collects £120 in Tax to give to a department to get some work done. You do the work for £100 and add VAT so bill to the department is £120. You then pay VAT to HMRC of 120 @ 14.5% £17.4 so the Government net position is £100 of work and £17.40 of VAT, less than they started with. You have just cost the government £2.60 extra.

In the case of someone that does charge VAT the government would actually get £100 worth of work and have £20 left over to get some more work done, so are in a better position than had they used an FRS contractor.

Your main point of argument is also flawed. You may pay more tax than you did than as a permie but your income is a lot higher as well. A permie earning what you earn do would pay a LOT more in tax than you do. If this wasn't true why would we be so afraid of the IR35 changes?

As was brought up earlier in this thread, we need to get over our sense of entitlement and prove why we are good for the British economy and justify our preferential tax treatment that way

[tractor]

....

I think it is your point that doesn't hang together. HMRC collects £120 in Tax to give to a department to get some work done. You do the work for £100 and add VAT so bill to the department is £120. You then pay VAT to HMRC of 120 @ 14.5% £17.4 so the Government net position is £100 of work and £17.40 of VAT, less than they started with. You have just cost the government £2.60 extra.

In the case of someone that does charge VAT the government would actually get £100 worth of work and have £20 left over to get some more work done, so are in a better position than had they used an FRS contractor.

Your main point of argument is also flawed. You may pay more tax than you did than as a permie but your income is a lot higher as well. A permie earning what you earn do would pay a LOT more in tax than you do. If this wasn't true why would we be so afraid of the IR35 changes?

As was brought up earlier in this thread, we need to get over our sense of entitlement and prove why we are good for the British economy and justify our preferential tax treatment that way

It makes no difference what you prove to whom and whichever way you frame the argument, there is no one listening. There never was and there never will be.

[Beggs1985]

It makes no difference what you prove to whom and whichever way you frame the argument, there is no one listening. There never was and there never will be.

Completely agree with these sentiments. Various representations were made to the government when the original travel and subsistence discussion document was put forward that the restriction of these expenses would have a negative impact on the flexible labour market.

The reply on page 28 point F of the consultation document states 'The government has received no evidence that changes in this area will impact negatively on the flexible workforce and we do not believe this will be the case'.

[eek]

Completely agree with these sentiments. Various representations were made to the government when the original travel and subsistence discussion document was put forward that the restriction of these expenses would have a negative impact on the flexible labour market.

The reply on page 28 point F of the consultation document states 'The government has received no evidence that changes in this area will impact negatively on the flexible workforce and we do not believe this will be the case'.

This is 1 reason why I don't think the general public should write responses. A badly written response allows them to interpret it in the way they want to not the way it was intended..