This is the end of contracting...
Discussion
Ean218 said:
I'm an employee and also a director of a limited company. I do all those things with knobs on. I'm paid PAYE, I get holiday pay, health insurance etc and if I was ever sick I would get paid.
If you were really running a business it would also pay you those benefits. Clearly you aren't because you talk as though you are an employee unfairly denied those benefits.
If you are running your own business, who pays your holiday pay and sick pay?If you were really running a business it would also pay you those benefits. Clearly you aren't because you talk as though you are an employee unfairly denied those benefits.
Dr Jekyll said:
Ean218 said:
I'm an employee and also a director of a limited company. I do all those things with knobs on. I'm paid PAYE, I get holiday pay, health insurance etc and if I was ever sick I would get paid.
If you were really running a business it would also pay you those benefits. Clearly you aren't because you talk as though you are an employee unfairly denied those benefits.
If you are running your own business, who pays your holiday pay and sick pay?If you were really running a business it would also pay you those benefits. Clearly you aren't because you talk as though you are an employee unfairly denied those benefits.
25th November - a date for everyones diaries - https://www.linkedin.com/pulse/future-uk-contract-...
Ean218 said:
I'm an employee and also a director of a limited company. I do all those things with knobs on. I'm paid PAYE, I get holiday pay, health insurance etc and if I was ever sick I would get paid.
If you were really running a business it would also pay you those benefits. Clearly you aren't because you talk as though you are an employee unfairly denied those benefits.
Perhaps you don't understand the nature of the proposal? As a business, contractors will pay PAYE, cover sickness, holidays, training and all the other 'benefits' you'd expect. However, the Government is saying that they do not trust them to manage their business, and if they work for a client for more than a month, then that client must take responsibility for PAYE, tax and so on.If you were really running a business it would also pay you those benefits. Clearly you aren't because you talk as though you are an employee unfairly denied those benefits.
Do you believe your business should be taken out of your hands, and your customers should be paying tax on your behalf before they purchase anything from you? Do you think your clients would be happy that before they can trade with you, they should fill in forms to show they've checked your tax affairs are in order, and that you're not 'dodging the system'? Would you be willing to put a sign up on the front door saying 'YOU are liable for any short-fall in my payments to HMRC'?
I don't know the nature of your business, but I imagine you like to be in control of the relationship you have with your clients?
On the whole the conversation you get between contractors and permanent staff turns to the issue of benefits because many permanent staff assume that contractors actually pocket the big difference in rates paid. The vast majority of contractors are quite happy that they have to take responsibility for their business and wellbeing, but are used to having to justify themselves to a small number of permanent staff who get their noses out of joint when they see the headline rates. No-one feels unfairly denied, just somewhat misrepresented.
I suspect the government will force all the agencies to operate Paye. Contractors will be employees of the agency. That's how it works in Switzerland/Germany for the majority.
I wonder if the PM did a deal with the Indian PM recently, if he did there won't be much of a contract market left. Indian it companies have been restricted on flying resources in up until now.
I wonder if the PM did a deal with the Indian PM recently, if he did there won't be much of a contract market left. Indian it companies have been restricted on flying resources in up until now.
AndrewO said:
I suspect the government will force all the agencies to operate Paye. Contractors will be employees of the agency. That's how it works in Switzerland/Germany for the majority.
I wonder if the PM did a deal with the Indian PM recently, if he did there won't be much of a contract market left. Indian it companies have been restricted on flying resources in up until now.
Not sure what restrictions are in place for India but it doesn't seem to be working. Out of the last 3 places I've worked, two have outsourced to India and brought a LOT of Indian staff over to the UK. The only restriction I could see is that they have a 6 month visa but this just means after 6 months they fly over another while the first works back in India then they swap them over again. I wonder if the PM did a deal with the Indian PM recently, if he did there won't be much of a contract market left. Indian it companies have been restricted on flying resources in up until now.
I know companies will always go the cost cutting route but it's having a massive effect on the job market in this country, you'd think any Government with the interests of UK workers at heart would attempt to stem the tide a little.
AndrewO said:
I suspect the government will force all the agencies to operate Paye. Contractors will be employees of the agency. That's how it works in Switzerland/Germany for the majority.
I wonder if the PM did a deal with the Indian PM recently, if he did there won't be much of a contract market left. Indian it companies have been restricted on flying resources in up until now.
I don't think they have at all given the number of indian IT workers I've worked beside over the last 10 years. The only actual limitation on them is the 2 year working VISA that means they have to head back home eventually.I wonder if the PM did a deal with the Indian PM recently, if he did there won't be much of a contract market left. Indian it companies have been restricted on flying resources in up until now.
I've said before that I think this influx of indian IT workers is wrong... the companies doing it should be training up UK students to do this work before we lose our ability to 'do' anything IT related.
Short termism - the Great British malaise.
AndrewO said:
I suspect the government will force all the agencies to operate Paye. Contractors will be employees of the agency. That's how it works in Switzerland/Germany for the majority.
Is that to "protect the workers?", or to guarantee Tax revenue from those cheating little contractors?That's the whole reason for this debate isn't it?
Some further details 'leaked' allegedly
http://www.contractoruk.com/news/0012310leaked_ir3...
It looks as though they are serious about forcing an employment status test, which would need to be conducted by each client when an engagement reaches a threshold of x months.
http://www.contractoruk.com/news/0012310leaked_ir3...
It looks as though they are serious about forcing an employment status test, which would need to be conducted by each client when an engagement reaches a threshold of x months.
theboss said:
Some further details 'leaked' allegedly
http://www.contractoruk.com/news/0012310leaked_ir3...
It looks as though they are serious about forcing an employment status test, which would need to be conducted by each client when an engagement reaches a threshold of x months.
I'm struggling to see any fundamental changes in any of what I read in that article.http://www.contractoruk.com/news/0012310leaked_ir3...
It looks as though they are serious about forcing an employment status test, which would need to be conducted by each client when an engagement reaches a threshold of x months.
Isn't the "worst case" here that everybody becomes a PAYE contractor?
I've worked that way a couple of times in the past and in both cases there was still a significant financial advantage, offset by the usual drop in benefits.
The difference in rate between PAYE and Limited Company was (IIRC) about 11% which represented the employers NI contribution.
OK, I kept a smaller percentage of the gross because I had to pay more tax (and NI), but in both cases I was earning significantly more than I had as a permanent employee with the same companies.
If it is the government's goal to make everybody go PAYE, it makes the changes to dividend tax make even less sense!
I've worked that way a couple of times in the past and in both cases there was still a significant financial advantage, offset by the usual drop in benefits.
The difference in rate between PAYE and Limited Company was (IIRC) about 11% which represented the employers NI contribution.
OK, I kept a smaller percentage of the gross because I had to pay more tax (and NI), but in both cases I was earning significantly more than I had as a permanent employee with the same companies.
If it is the government's goal to make everybody go PAYE, it makes the changes to dividend tax make even less sense!
Frankthered said:
Isn't the "worst case" here that everybody becomes a PAYE contractor?
I've worked that way a couple of times in the past and in both cases there was still a significant financial advantage, offset by the usual drop in benefits.
The difference in rate between PAYE and Limited Company was (IIRC) about 11% which represented the employers NI contribution.
OK, I kept a smaller percentage of the gross because I had to pay more tax (and NI), but in both cases I was earning significantly more than I had as a permanent employee with the same companies.
If it is the government's goal to make everybody go PAYE, it makes the changes to dividend tax make even less sense!
Issue for me is that I like the way I can tweak my dividend based on my personal circumstances. I leave money in the company for any rainy days/training courses etc. If I am forced to operate PAYE then leaving money will attract 20% CT PLUS the PAYE element when I eventually draw it.I've worked that way a couple of times in the past and in both cases there was still a significant financial advantage, offset by the usual drop in benefits.
The difference in rate between PAYE and Limited Company was (IIRC) about 11% which represented the employers NI contribution.
OK, I kept a smaller percentage of the gross because I had to pay more tax (and NI), but in both cases I was earning significantly more than I had as a permanent employee with the same companies.
If it is the government's goal to make everybody go PAYE, it makes the changes to dividend tax make even less sense!
It's just not going to happen. It would ruin the flexibility that many businesses have to get expertise for a short time, including many government departments! I've been a contractor for 5 years and all my assignments have focussed on areas where the client simply didn't have the internal skills to do the work - including my first contract which was to sort the mess out at a failed bank owned by the Government!
HMRC are just trying to nobble PSCs because they think it's an easy target. It's the BBCs fault really - by having presenters that have been there for years working through PSCs, even though they have been employees in the past.
It'll blow over. The Autumn Statement will include details of a 'disguised employment' test that anyone with a 2-month plus contract will have to complete, and thats it.
If these mad proposals were ever implemented i'd just form a consulting company with 20 or so other contractors and we'd hike our rates to compensate for any PAYE reduction in salary.
I wonder if it's the Big 4 getting worried that their blend of lazy partners and ineffective graduates is losing out to very experienced contractors with 25 years experience of knowing how things actually work...especially in Financial Services.
HMRC are just trying to nobble PSCs because they think it's an easy target. It's the BBCs fault really - by having presenters that have been there for years working through PSCs, even though they have been employees in the past.
It'll blow over. The Autumn Statement will include details of a 'disguised employment' test that anyone with a 2-month plus contract will have to complete, and thats it.
If these mad proposals were ever implemented i'd just form a consulting company with 20 or so other contractors and we'd hike our rates to compensate for any PAYE reduction in salary.
I wonder if it's the Big 4 getting worried that their blend of lazy partners and ineffective graduates is losing out to very experienced contractors with 25 years experience of knowing how things actually work...especially in Financial Services.
Ean218 said:
Dr Jekyll said:
If you are running your own business, who pays your holiday pay and sick pay?
Errrr, the business does of course.You seem to be confusing ownership with employment.....
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