Freelance Limited Company (FLC) offering from IPSE

[LondonManc]

Dare I suggest that the key thing could be being a 'professional' as in broadly equivalent to Chartered status?
Just a thought, not something I'm committed to.

Either that, or as I've seen elsewhere, the concept of an 'overarching employment', i.e. I'm employed by myco and myco sends me wherever the contracts are, and employs me continuously for as long as that's my 'business model'. I've always seen that as significant, paying myself the same salary whether I'm in contract or 'between'.

Maybe what's needed is forcing people to pay themselves serious salaries for their 'bum on seat' role?
An end to the £10k plus 10x that in divs for a '£50k permie' role?
I don't know.
I am relieved not to be dependent on my contracting career going very far forwards from here!

It's not a permie role if there's no severence pay, etc.

I see it as being paid a basic retainer to be available to MyCo for work and the dividends are paid when work has been secured and I'm carrying out said work for MyCo in a commission format.

[WordIsBond]

Basically what I'm saying is that in any system where you have different tax regimes for different types of income / profit / wealth, you are going to have edge cases where it is going to get hard to draw distinctions between them, and you will have people who will modify their behaviour to get into the lower tax regime.

So you will always have enforcement / compliance issues which will become more and more complicated, as long as you have significant tax rate disparities for different kinds of income.

And the biggest driver of it all is probably employer NI. The government wants to keep it hidden, and call it an employer tax, so people don't realise just how much of the money their company is paying on their employment isn't in their take home pay. So they have this swingeing 13.8% hammer blow that most people don't even know or think about. And it provides a huge incentive for employers to off-load employees. And as long as that exists, there are going to be attempts to avoid it and attempts to prevent avoidance.

[SpontaneousOrder]

silly over exaggeration - most contractors gross (at least) twice what they would get as perm, which means even on equal tax-footing they only *need* to work about 7 months of the year to come out with the same. The fact that most of us push to try and work 9/10/11 months per year and have a better lifestyle (than our equivalent permie-selves) with the extra cash has made us overly greedy

And that makes sense if you suppose that you are a disguised permie. Otherwise it's apple & oranges.

[SpontaneousOrder]

so someone on £14.90 per hour is different to someone on £15.10 per hour? you can't just draw an arbitrary line.

I an forced to give up a much larger percentage of my income than someone on 15k a year. Why? - because I earn more. How's that for arbitrary?

[Lightwave]

It's not a permie role if there's no severence pay, etc.

I see it as being paid a basic retainer to be available to MyCo for work and the dividends are paid when work has been secured and I'm carrying out said work for MyCo in a commission format.

Commission format?
That would attract PAYE.

Lots of permies don't get 'severance pay', their 'permie' roles do not last long enough.
I sometimes wonder if other contractors have no contact at all with people who don't have good jobs!

[pr1]

I an forced to give up a much larger percentage of my income than someone on 15k a year. Why? - because I earn more. How's that for arbitrary?

yes but my point with drawing an arbitrary line is that someone on (say) 14.5k would pay more tax than someone on 15.5k - which is unfair - it's generally agreed/accepted/is never going to change that tax should be progressive to protect the very-low earners (an extra £100 to someone with £1000 is worth a lot more than an extra £100 to someone with £100,000)

[eek]

yes but my point with drawing an arbitrary line is that someone on (say) 14.5k would pay more tax than someone on 15.5k - which is unfair - it's generally agreed/accepted/is never going to change that tax should be progressive to protect the very-low earners (an extra £100 to someone with £1000 is worth a lot more than an extra £100 to someone with £100,000)

It's not would at most its a could. And in reality they couldn't because there would be costs associated with that change in payment method which would easily cost £1000 a year....

Yep its arbitrary and potentially unfair. Give me something better than HMRC could use without effort...

[SarahL2012]

Best article I've seen on the consultation is on taxation.co.uk by David Kirk. Not sure if already been linked to somewhere on this forum but it sums up the position well.

He sounds like the kind of person I'd like representing me rather than the latest IPSE nonsense!

[DaveB]

Best article I've seen on the consultation is on taxation.co.uk by David Kirk. Not sure if already been linked to somewhere on this forum but it sums up the position well.

He sounds like the kind of person I'd like representing me rather than the latest IPSE nonsense!

Subscription only....

[SarahL2012]

2 weeks free if you sign up I think.