Contracting for a living Page 2

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  • Zidargh 28 Jan 2019 13:24:33 1,935 posts
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    I'm getting increasingly frustrated by HMRC's approach to contractors. The Chancellor speaks about empowering entrepreneurship in the UK and then at the same time strangles genuine, honest contractors with reduced tax benefits, etc.

    I was about to write to my accountant about this, but do any of you know of a lobbying group/forum whereby we can petition protection for contractors.

    Last I heard it was a "free country" and we have every fucking right to determmine the methods in which we work. I know that I pay my tax returns way ahead of deadlines and operate honestly, with integrity.

    Emigration is more and more appealing every month.
  • KnuttinAtoll 28 Jan 2019 13:33:45 6,673 posts
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    I remember when I was starting off in the UK that HMRC started to tighten the screws with IR35, no idea how much worse it got since. I went down the umbrella route as I would've almost certainly been falling within IR35 so the risk of getting shafted by the tax man was too high.

    I did receive regular updates from my umbrella company about these issues via newsletter but I got the impression of futility as HMRC were going to do what they felt like regardless of industry lobbying/protesting etc.
  • Zidargh 28 Jan 2019 13:42:29 1,935 posts
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    I'm not a conspiracy theorist and I acknowledge that I'm more aware as I get older, but the nonsensical logic of the Western world leads me to one conclusion: rampant corruption.

    Having travelled extensively through Africa, I always said that for all of its horrendous problems, at least corruption is blatant and so you can navigate it accordingly. Within the UK, deals are struck "legitimately" by the big corporations/bodies and yet the same ridiculous results manifest. This, our housing crisis, the NHS, the way Brexit's unfolding.

    And what angers me more is at best we, the public, respond with apathy and a sort of fatalistic, "Ah yeah... politicians, eh?" We just take this sitting down.

    Forgive me for getting political--I clearly needed to vent.
  • Zidargh 28 Jan 2019 13:44:21 1,935 posts
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    Forgive the double-post, but I wanted to highlight this for you. My accountant just sent me this:

    https://www.contractorcalculator.co.uk/ir35_campaign.aspx
  • THFourteen 28 Jan 2019 13:46:36 50,896 posts
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    @Zidargh

    Maybe corruption at a macro level, but at a micro level god you wouldn't want to live in India that's for sure. Literally you couldn't stop to help someone in the street because the local police are so corrupt the minute they know you are a foreigner or a foreign national they'll chuck you in jail regardless of whether you were trying to help or not until you pay them.
  • Zidargh 28 Jan 2019 13:50:36 1,935 posts
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    @THFourteen Acknowledged but I'm not satisfied with the "It could be worse" argument.

    These are our lives and as far as we objectively know, we only have one of them. So we should be striving for the best possible.

    Anyway, not to derail the thread.
  • RyanDS 28 Jan 2019 13:52:07 12,513 posts
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    Zidargh wrote:
    I'm getting increasingly frustrated by HMRC's approach to contractors. The Chancellor speaks about empowering entrepreneurship in the UK and then at the same time strangles genuine, honest contractors with reduced tax benefits, etc.

    I was about to write to my accountant about this, but do any of you know of a lobbying group/forum whereby we can petition protection for contractors.

    Last I heard it was a "free country" and we have every fucking right to determmine the methods in which we work. I know that I pay my tax returns way ahead of deadlines and operate honestly, with integrity.

    Emigration is more and more appealing every month.
    Probably the best shout:
    https://www.ipse.co.uk/
  • whatfruitlivesagain 28 Jan 2019 14:18:54 1,546 posts
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    Zidargh wrote:
    Forgive the double-post, but I wanted to highlight this for you. My accountant just sent me this:

    https://www.contractorcalculator.co.uk/ir35_campaign.aspx
    They've got to pay for that shortfall of 6.2bn because of the corporation tax cut somewhere.
  • Nazo 28 Jan 2019 14:40:50 885 posts
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    Not sure how corruption comes into it. Far from being entrepreneurs driving the economy forward, most contractors just do the same jobs as regular employees but pay less tax. I know people whoíve been working full-time as contractors at the same place for years.
  • fontgeeksogood 28 Jan 2019 14:45:47 4,640 posts
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    It's just tax avoision, user nazo
  • RyanDS 28 Jan 2019 15:17:56 12,513 posts
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    Nazo wrote:
    Not sure how corruption comes into it. Far from being entrepreneurs driving the economy forward, most contractors just do the same jobs as regular employees but pay less tax. I know people whoíve been working full-time as contractors at the same place for years.
    There is an argument that they should be able to pay less tax as they don't have any employee rights. No sick pay, holiday pay etc. No notice period.

    Whether that is offset by higher base pay or lower taxes to account for the risk though is debatable.

    Also those "most" contractors you talk about above already should pay full tax as they are clearly inside IR35. If they don't it is not a legal issue to be resolved, it is an enforcement issue.
  • sport 28 Jan 2019 15:26:06 14,759 posts
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    I know how I'll avoid tax, I'll become a contractor - now I'll just forego job security, paid holiday, sick pay and any company benefits. Then I'll pay corporation tax, dividend tax as well as accountant fees to make sure my tax filings are in order.

    Good thing I can charge £500/hr to make up for it... Hmmm... looks like the sme who needs some work done can't afford anything near that. £40/hr it is then.

    Wow, being a contractor sure is easy.
  • Zidargh 28 Jan 2019 15:29:55 1,935 posts
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    @Nazo Perhaps try it out before giving your views.
  • PazJohnMitch 28 Jan 2019 15:40:11 14,164 posts
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    When one of my mates went freelance* he set his price based on 1 month of solid bookings (200 hours) paying off his yearís mortgage.

    Based on other things he has said I think this equates to about 400 hours paying the same as his previous full time employment. (Which in turn is an hourly rate of about 5 times that of a full time employee).

    To be honest I think he undercharges as his books are always full but he is doing well.

    *Freelance is similar but a different term for a different industry. He generally does lots of small jobs instead of long term placements.
  • Nazo 28 Jan 2019 17:06:22 885 posts
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    Zidargh wrote:
    @Nazo Perhaps try it out before giving your views.
    What makes you think I havenít? I was an IT contractor for several years. It was sold to me by other contractors I knew as being a way to make more money and pay less tax, which is pretty much what it was.
    So letís not pretend this is some noble crusade of little guy being unjustly treated. Youíre pissed off that your gravy train might be coming to an end. Fair enough, no doubt I would be too if I was still on it, but I wouldnít try to make out it was anything else.
    I agree with the point above that the problem is more about enforcement than the rules as they stand though.
  • Zidargh 28 Jan 2019 17:40:38 1,935 posts
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    @Nazo You're taking a very generic perspective of contracting. There's a lot more nuance to why and how contractors have to engage with clients in the way they do. Sometimes they don't have a choice, but in order to work, they have to accept more administration and less or no benefits.

    Freelancers for example, are in drastically different circumstances to IT contractors.
  • Nazo 28 Jan 2019 18:23:09 885 posts
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    Yes, I wouldnít argue with that.
  • fontgeeksogood 28 Jan 2019 18:39:43 4,640 posts
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    But by the same token, I doubt freelancers tend to get into the uh, investment vehicles / offshore director loans / grift du jour in the same numbers as IT contractors
  • Not-a-reviewer 28 Jan 2019 19:37:22 5,498 posts
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    I contracted for two years before going back perm at the same place, that was purely because I have a young family and canít travel and Iím not moving. Job security is important for now.

    It did get me an extra £10k over what a normal perm would got where I am, and 18 months later I got put in charge so now recruiters are all over me.

    Ultimately it depends on your circumstances, what you want from work and how critical and unique your skills are. Iím lucky that thereís a massive shortage of people that do my job, one day Iíll go back to contracting.
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