Telegraph article on IR35 impact

[meanttobeworking]

'Tax crackdown on the self-employed has cost me £1,000 a month – and it will only get worse'

[BrilloPad]

Times one is better: -

https://www.thetimes.co.uk/article/b...reat-t6gvx7p0g

Case study
Brillo Pad, 54, lives in Llandudno, north Wales, with his wife and three children. He works as an IT contactor for a large investment bank in the city, renting a room in the suburbs during the week and returning home at weekends. Changes to IR35 — the rule which would tax workers as if they were regular employees — could cost him thousands of pounds a year, he claimed and said that he would probably have to emigrate.

“When contractors are forced out, their place will be taken by large consultancies, paying little tax,” Mr Pad added.

Then there is a picture of a scourer.

[malvolio]

Loved the comment on the Telegraph one - "Should have set himself up as an LLP"...

[vwdan]

I wish more would focus on the travelling nature of contract consultants and the fact that our permie counterparts can claim the exact same expenses as we (currently) can outside of IR35.

Personally, I think the advantages of paying dividends will be eroded completely over the next few years - and, to a degree, I find the "Reward for taking risks" argument a little bit hollow. Let's face it, everyone starts business to make some business and hopefully get rich- I'm not sure I feel I should be rewarded for deciding to take some risk in the hope of big rewards.

But, I do expect to be able to operate on a level playing field. Why can I join a permie consultancy, be home based, and claim all travel expenses to wherever I go - but not do that when I work in almost the exact same role as a contractor.

Of course, the real issue isn't that IR35 exists, it's the aggressive nature of HMRC in attempting to force all contractors under that banner.

[LondonManc]

I wish more would focus on the travelling nature of contract consultants and the fact that our permie counterparts can claim the exact same expenses as we (currently) can outside of IR35.

Personally, I think the advantages of paying dividends will be eroded completely over the next few years - and, to a degree, I find the "Reward for taking risks" argument a little bit hollow. Let's face it, everyone starts business to make some business and hopefully get rich- I'm not sure I feel I should be rewarded for deciding to take some risk in the hope of big rewards.

But, I do expect to be able to operate on a level playing field. Why can I join a permie consultancy, be home based, and claim all travel expenses to wherever I go - but not do that when I work in almost the exact same role as a contractor.

Of course, the real issue isn't that IR35 exists, it's the aggressive nature of HMRC in attempting to force all contractors under that banner.

WRONG!!!!! It costs them not a penny; we simply get the tax relief on it, it still comes out of our money that we can pay to ourselves.

[vwdan]

WRONG!!!!! It costs them not a penny; we simply get the tax relief on it, it still comes out of our money that we can pay to ourselves.

Well, not really. Not if you're treating your Ltd Co as a Ltd Co and you as yourself. A little bit pedantic I know, but considering your company income as "your" income is the first step into disaster.

[ProInDisguise]

Personally, I think the advantages of paying dividends will be eroded completely over the next few years - and, to a degree, I find the "Reward for taking risks" argument a little bit hollow. Let's face it, everyone starts business to make some business and hopefully get rich- I'm not sure I feel I should be rewarded for deciding to take some risk in the hope of big rewards.

A little bit hollow? The reason it is encouraged is because it's good for the economy. If no one took risks then the economy would never grow. Sometimes people get rich and sometimes people go bankrupt when running a business and it's in the governments interest that risk taking is encouraged and supported.

[vwdan]

A little bit hollow? The reason it is encouraged is because it's good for the economy. If no one took risks then the economy would never grow. Sometimes people get rich and sometimes people go bankrupt when running a business and it's in the governments interest that risk taking is encouraged and supported.

I know where you're coming from - I just dislike the whole "Oh, look at us - doing it for the good of the country" argument. Let's face it, none of us went into contracting to help the economy - yes, tax breaks are a way to encourage behaviour and that's fine. But, personally, I'm very conscious that I made a very personal decision to go contracting and I don't really feel deserving of any thanks. What I would like, as I say, is to compete on a level playing ground with larger consultancies.

Anyway, look at this tulip that we're up against:

Nigel Meek
Just ensure you work for multiple employers simultaneously. I usually invoice 3-4 clients a month and so can in no way be classified as an employee. That is all IR35 is trying to do. If you work for a single client you are basically an employee of them as far as HMRC is concerned. The fact you may well have to have PI Insurance, Public Liability Insurance, Employer's Insurance in any event seems to have been lost on the those idiots.

Nigel Meek, if you're here, you're a fool.

[LondonManc]

Well, not really. Not if you're treating your Ltd Co as a Ltd Co and you as yourself. A little bit pedantic I know, but considering your company income as "your" income is the first step into disaster.

Semantics I know but I'm thinking as a shareholder

[WordIsBond]

I know where you're coming from - I just dislike the whole "Oh, look at us - doing it for the good of the country" argument. Let's face it, none of us went into contracting to help the economy - yes, tax breaks are a way to encourage behaviour and that's fine. But, personally, I'm very conscious that I made a very personal decision to go contracting and I don't really feel deserving of any thanks. What I would like, as I say, is to compete on a level playing ground with larger consultancies.

Anyway, look at this tulip that we're up against:

Nigel Meek
Just ensure you work for multiple employers simultaneously. I usually invoice 3-4 clients a month and so can in no way be classified as an employee. That is all IR35 is trying to do. If you work for a single client you are basically an employee of them as far as HMRC is concerned. The fact you may well have to have PI Insurance, Public Liability Insurance, Employer's Insurance in any event seems to have been lost on the those idiots.

Nigel Meek, if you're here, you're a fool.

Nigel is probably right. Forget what the law actually says, in reality HMRC is not likely to go after someone with multiple simultaneous engagements. And even if they do, if you are paying yourself a salary and making pension contributions, you can always attribute them to the contract they challenge which means they'll gain very little by going after you. Which means they probably won't do it. So yes, having 3-4 concurrent clients probably makes you effectively IR35 proof, even though the law says differently.

As to incentivising risk taking, the government incentivises lots of different kinds of behaviours. Let's talk about fuel-efficient cars, for instance. If you buy a fuel-efficient car, you have the satisfaction of saving petrol cost and feeling environmentally noble and virtuous. You probably don't need a government incentive to do it. But the government gives an incentive anyway (lower tax) because they want to encourage that behaviour. A lot of people, when deciding what kind of car to buy, are influenced by the lower road tax.

The government incentive isn't for those who would take the risk anyway. It's for those who are trying to decide whether to make the leap. There are a lot of people who have talked about quitting this game because the tax situation is gradually getting worse and worse, and will continue to do so. Maybe you aren't influenced by it, but there are a lot of people who are, and if anyone in government is actually thinking (I know, no one should expect that), they should be waking up to the fact that they are going to lose a lot of their entrepreneurs / risk-takers / flexible work force because for some people, the risk isn't going to be worth it without favourable tax treatment.

I left behind a far better position than most do when I went independent. If there weren't favourable tax treatment I wouldn't have done it. And I have people working for me because I made the jump. If they force a pass-through treatment on us or find a way to force everyone into IR35, I'll keep at it because I've found satisfaction in it that I didn't have before. But what I'm doing would have never happened. And most of my revenue is foreign-source, so I'm bringing in money they would have never seen and providing jobs as well.

Incentives matter. That's why they keep providing incentives and disincentives for different behaviours in the tax system. They know those things affect behaviour. They've just forgotten that it is a good idea to incentivise economic risk-taking in their rush to pander to envy.