IR35

My only point is also that contracting is a choice.

So is expanding :roll_eyes:

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:face_with_raised_eyebrow:

:grinning:

I think it has more to do with your dislike of contractors than choice or taxes.

No axe to grind, just incredulous at the butt hurt. If it no longer suits people to be a contractor, they still have the choice to go perm.

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Yes because suitable permy roles within commuting distance are 10 a penny

How is an unfair tax system that targets individuals butt hurt?

There’s no butt hurt (I’ve never been a contractor), it’s just obvious to me that if they are to have less holiday pay, sick pay, benefits and notice period, they should get more cash.

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I agree that IR35 is no solution but I also think that there has never been justification for paying a contractor 2 - 3 times the salary of a permanent employee going the same job, maybe 50% (choose a reasonable figure) but not 300%.

The average tenure of permanent jobs is going down and now stands at less than 2 years and the “gig economy” is expanding, often by choice of the worker, so such a big difference in salary isn’t justified in the modern work landscape.

For context I’ve always been a permie until I was made redundant from my last job and slapped with a non compete order. I took a contract role and I’m looking at starting a permie role in April.

I just believe that if tax laws are going to applied they need to be done fairly and not aimed at the easiest target.

Agreed, but not 300%, and contracting is still a choice.

So it is down to your personal dislike of contractors.

Do you realise there are 1000’s out there who only earn a little more than the average wage as contractors and not all are rich gravy boat riding scumbags.

IR35 will effectively knock 20% off their earnings.

Again, I agree, but at the moment they are in favour of the contractor. Some form of rectification is long overdue but IR35 isn’t it.

3x seems absurd, for sure, but why would it be so great? Surely that would be indicative that the market is broken, who would work for £50k when they could earn £150k instead? Why is the company paying a contractor that much when they could get someone much cheaper? Neither make sense.

Sorry, for clarification, I am only talking about that which I know about, and that is professional software engineers.

Chris - Paying less tax and earning more cash (which in general contractors do) is unfair.

The NHS’s reliance on locum nurses, many of whom travel across the UK and stay in hospital accommodation and hotels for work, is well documented. The financial impact of the reforms on these nurses is best demonstrated by comparing earnings before and after the changes to IR35, using an illustrative example:

A nurse working outside of IR35 on £30 an hour will earn £300 for a 10-hour shift. Having travelled to the location, the nurse stays in a hotel at £60 per night, the cost of which is claimed as an expense, leaving £240 in after-expenses earnings. Tax is then deducted at a rate which is roughly equivalent to that of an employee, leaving the nurse with £183 for a day’s work.

Following the reforms, the same nurse is now deemed to be ‘employed for tax purposes’ by the NHS, which is also deducting its employer’s NI liability from the nurse’s rate, resulting in an immediate reduction in wages.

Following this unlawful deduction, the nurse now has pre-tax daily earnings of £262, which reduces to £182 once employment taxes have been deducted. The nurse can no longer claim any expenses, meaning they must foot the £60 hotel bill themselves. This reduces their earnings for the day by a third to £122.

It does, but it is fairly common.

I don’t disagree with that but again IR35 (which is the subject here) is unfairly targeting individuals.

They need to change the rules on dividends to address that issue/loophole.