Freelance Limited Company (FLC) offering from IPSE

[eek]

completely different

someone on £30100 pays the same tax as someone on £30000, plus a bit more on the extra £100

drawing a line between where you can incorporate and not means someone on £15000 might pay £1000 tax but someone on £15100 might pay £900 tax - unfair

We aren't.... You can incorporate the agency will just not be able to pay you by any means other than through PAYE... And we aren't talking about those earning £30,000 a year but those earning £7-12 an hour, £250-400 a week or £1000-1600 a month...

Pick an argument that isn't about turnover and come up with an easy to police approach that HMRC can implement using the tools they already have in their arsenal...

Just saying you don't like it, it isn't fair isn't getting us anywhere. We need to provide possible solutions that mean HMRC can implement something that solves some of their problems without destroying the entire freelance marketplace. Otherwise they will implement something that impacts us and accidentally does destroy the entire marketplace...

[dynamicsaxcontractor]

Please make your views known on the survey to members - that is the only way that the members can influence this now, and as a members organisation the board must listen to the views of the membership.

I have made my thoughts on the FLC pretty clear from day one, and will continue to do so now that we have some detail, but the more people that comment the more representative it will be.

I would also encourage people to use the comments box to answer whether they would use an FLC, if it came into reality.

Already done that, if this goes ahead and the option to trade though a LTD will be limited or blocked in conjunction with all the other tax enhancements from HMRC I will seriously consider moving abroad.

[pr1]

So, in engineering is it 2* rate, or just 20% extra, compared to perm?

@pr1, you seem obsessed with comparing yourself / us to permies.
Would you say your skill and experience levels are the same?
If so, wouldn't you say your client was just buying a bum on seat and saving money on perm?

I hope to offer skills and industry experience very few permies have, at a principle level.
Therefore, there is a good price charged for this to clients.

Principle Consultancy from <Enter Big BI Software Vendor Here> was £2K PD a few years ago. Admittedly, I suspect this has probably decreased to around £1800 PD now.

All I know is, I'm quite a bit cheaper and in most cases more knowledgeable than the consultants the vendor supplies.

your two quotes are from two different people (i only wrote the first one)

contractors cost my engineering clientco more than their perm staff (day for day), they're a stop gap panic "oh s**t we need to deliver this package of works before date X and half our perm staff have left between when we bid and when we won the work" - so they get contractors in to give bits of the work to so they can (try to) meet the deadlines (it's cheaper to pay more for contractors than to miss a deadline and pay a fine/not get paid in full)

we (contractors) are cheaper than seconding in another BigClientCo perm engineer for 6 months though, which I think is what you're alluding to (i.e. clientco perm is cheapest, then independent contractor, then seconded-in-bigco-staff)

[Lightwave]

We aren't.... You can incorporate the agency will just not be able to pay you by any means other than through PAYE... And we aren't talking about those earning £30,000 a year but those earning £7-12 an hour, £250-400 a week or £1000-1600 a month...

Pick an argument that isn't about turnover and come up with an easy to police approach that HMRC can implement using the tools they already have in their arsenal...

Just saying you don't like it, it isn't fair isn't getting us anywhere. We need to provide possible solutions that mean HMRC can implement something that solves some of their problems without destroying the entire freelance marketplace. Otherwise they will implement something that impacts us and accidentally does destroy the entire marketplace...

I think this is the key.
When you look at the big picture, including what has been happening with some people on (not vastly more than min wage), the status quo is pretty ridiculous.
Once upon a time contracting was about bigger opportunities not less tax.
However, the current state of the UK job market in my sector (electronics hardware) contracting is more about the mobility to keep in interesting work. The rate differential isn't what it was.

We need to tread a fine line between objecting to a new farcical system and defending the current indefensible mess.

[eek]

I think this is the key.
When you look at the big picture, including what has been happening with some people on (not vastly more than min wage), the status quo is pretty ridiculous.
Once upon a time contracting was about bigger opportunities not less tax.
However, the current state of the UK job market in my sector (electronics hardware) contracting is more about the mobility to keep in interesting work. The rate differential isn't what it was.

We need to tread a fine line between objecting to a new farcical system and defending the current indefensible mess.

+1. I went permie and was slowly losing my skillset as there was always some disaster that required someone to fix (i.e. me, the goto fix mess in old code base person)..

I contract not because of the money but because I can work where I want and stay where I want. As a prime example Ex clientco's MD bought some flats in St Albans and forced their London consultants to stay there midweek...

[pr1]

if none of you contract for the money why are you worried about paying the same tax as employees?

(spoiler - you are doing it at least partly for the money)

[dynamicsaxcontractor]

if none of you contract for the money why are you worried about paying the same tax as employees?

(spoiler - you are doing it at least partly for the money)

If you are not in control of your own income and are taxed as perms you won't be able to be as flexible and having bench time.

[TheFaQQer]

if none of you contract for the money why are you worried about paying the same tax as employees?

(spoiler - you are doing it at least partly for the money)

If you want to be a permie, then be a permie. If you want to be a freelancer, then be a freelancer.

But being freelance has inherent risks which should be rewarded - is a permie going to go unpaid for six months because they have no role to go to? No. Is a permie going to get redundancy pay, sick pay, maternity pay, paternity pay, paid holiday, any other myriad of benefits? Yes.

However, this is rather off-topic and irrelevant to any discussion of an FLC.

[eek]

if none of you contract for the money why are you worried about paying the same tax as employees?

(spoiler - you are doing it at least partly for the money)

I'm merely concerned about being treated equally to my contemporaries / competitors... The permanent consultants at any blue chip consultancy....

[Lightwave]

So, in engineering is it 2* rate, or just 20% extra, compared to perm?

......

Seems to have got increasingly random in recent years.
I'm not looking at the moment, but the last two job alert emails I got were for £30/hr contract somewhere very inconvenient, doing telecoms hardware design, and £50k/year permie somewhere moderately inconvenient doing something comparable. In the old days the norm was contract £x per hour translated to permie £xk per year.
Rates for such contracts would have been around £30/hr in about 1998?

In the old days, we did lots of hours, stacked a lot of cash, paid hods of tax, and our clients made proper money doing 'big things' and paid shedloads of corporation tax.

For a lot of people, what's changing is not just about a new NI and expenses regime. Bigger things are badly wrong IMHO.